Current carbon tax only delays needed investments by producers.
Ottawa-Gaining farmers a full exemption from the federal carbon tax is a key priority for 15 of Canada’s major farm organizations because the move will better enable producers to reduce their greenhouse gas emissions, says the Agriculture Carbon Alliance.
The carbon tax on propane and natural gas used in grain drying and barn heating and cooling will not change farmers’ use of the fuels because there are no viable alternatives, said Dave Carey, Co-Chair of the Agriculture Carbon Alliance (ACA) and Vice-President of the Canadian Canola Growers Association.
He and fellow ACA Co-Chair, Scott Ross, Executive-Director of the Canadian Federation of Agriculture, were speaking to the Senate agriculture committee, which is studying a bill from Huron-Bruce Conservative MP Ben Lobb. It would exempt producers from paying the carbon tax on propane and natural gas.
“Carbon pricing was implemented as a mechanism to change behaviour,” Carey said. However, with no viable alternatives, the tax only “adds significant financial burden on producers that don’t have other options.”
Lobb’s bill “would ensure farmers maintain capital, at a time of significant inflation, to make on-farm investments that drive energy efficiencies and reduce their environmental footprint. Investments in these technologies can cost hundreds of thousands of dollars and, when no alternative exists, carbon surcharges pull capital away from investments that would augment the sector’s potential to further reduce emissions.”
Ross said the exemptions provided in the bill are the best option. The tax will rise by an additional $120 a tonne by 2030 but would likely only reduce agriculture emissions by around one percent. “This would cost farmers $1 billion dollars, resulting in less investment and innovation and potentially exacerbating food security in the process.”
The current federal rebates “fail to account for the factors, largely beyond farmers’ control, that drive significant variability in the use of propane and natural gas,” he said. That approach “means that many farms receive only a fraction of what they paid in carbon tax back in rebates, which means less money to reinvest on the farm. Rebates are also retrospective and time delayed, discouraging prompt investments.”
Carey said Lobb’s bill, which has been approved by the Commons and received second reading in the Senate, “would provide a comprehensive, but targeted, exemption for essential activities that lack viable alternatives and leave the money in farmers’ pockets to make timely investments in their operations.
“It should not be forgotten that farmers are innovative climate solutions providers, sequestering millions of tonnes of carbon; protecting biodiversity and grasslands; and utilizing the latest technologies, where commercially viable, to reduce fuel and water use.”
The ACA is a coalition of 15 national farm organizations established to ensure that Canadian farmers have a constructive voice in informing Canada’s agri-environmental policies to maintain competitiveness, support farmers’ livelihoods, and leverage farmers’ critical role as stewards of the land.
“To remain competitive and environmentally sustainable, farmers increasingly need capital to invest in innovations that drive efficiencies, reduce fuel use, and implement best management practices, which lead to less emissions, a better environmental footprint and allow them to continue doing what they do best – provide food to Canadians and the world,” Carey said.
Ross said, “Farmers, growers and ranchers are stewards of their land, adopting the best environmental practices whenever possible. To continue to invest in innovations, they need to remain competitive and have access to sufficient capital. By adopting policies that support these outcomes, they will be able to further their investments in the sustainability of their operations, furthering emissions reductions and sequestering carbon while feeding Canadians and the world.”