More disappointment with Bill C-234 amendment

Oct 30, 2023

The buildings farmers heat are crucial to daily operations, a rancher said

By Diego Flammini
Staff Writer
Farms.com

Reaction continues to come in from the Canadian ag community about a legislative decision that could cost farmers thousands of dollars.

“The buildings we heat are crucial to our day-to-day operations, David Sibbald, chair of the Canadian Beef Breeds Council and rancher from the Alberta foothills, told Farms.com. “Heating our barns ensures that not only is our livestock comfortable, but makes sure our equipment runs smoothly in the colder months to help us care for our livestock.

David Sibbald

“It’s disappointing that the government has failed to recognize the importance the exemption is to the animal care strategies we’ve all incorporated.”

Sibbald and other industry members are concerned with an amendment made to Bill C-234, which, in its original form, provided farmers with carbon tax exemptions on fuels like propane and natural gas used to dry grain and heat barns or greenhouses.

But on Oct. 19 during a Senate ag committee meeting, Senator Pierre Dalphond introduced a change to remove the heating exemption.

The bill will be put in front of the full Senate for a third reading.

If senators reject the amendment, Bill C-234 could appear in its original form for its third reading before receiving royal assent.

But if the Senate approves the change, the bill will have to go back to the House of Commons to get support from MPs.

Removing the barn and greenhouse heating exemption will cost farmers thousands of dollars.

Rick Prejet, chair of Manitoba Pork, for example, told Farms.com in July he pays about $80,000 in carbon taxes per year.

And Jan VanderHout, president of the Fruit and Vegetable Growers of Canada, estimated a 30-acre greenhouse pepper operation would pay about $150,000 in carbon taxes per year.

As the carbon tax increases, one of two things will happen, Sibbald said.

“This all ends up meaning consumers pay higher prices for food,” he said. “And when consumers can’t afford the food, production stops. And once primary producers can’t afford it, we lose those farms and production that Canada is known for.”

Canada has experienced a decrease in the number of farms reporting cattle and calves.

On July 1, 2018, before the carbon tax came into effect in 2019, Canada had 72,495 farms in this category, Stats Canada data shows.

And as of July 1, of this year, that number is down to 71,075, or 1,420 farms fewer than in 2018.

The carbon tax is scheduled to increase to $80 per tonne in 2024.

Without support from the federal government to help farmers, the ag industry could be in trouble, Sibbald said.

“You can only stretch a rubber band so far before it breaks,” he said. “We farm because it’s a passion and lifestyle but it’s also a business. If we continue to operate like this, you get to a point where it doesn’t make any business sense. I hope the government looks at the big picture and changes course on this policy.”

A report from the Parliamentary Budget Officer has painted a broader picture of how carbon tax exemptions can help farmers.

The report estimates eliminating the carbon tax for grain drying and barn heating could save Canadian farmers almost $1 billion by 2030.

That represents money that doesn’t have to be made up through higher prices, which helps farmers domestically and globally, Sibbald said.

“It’s a constant conversation,” he said. “The world relies on Canada to produce these crops and proteins, and Canadian farmers have spent decades building trust and our reputation around the world. If government continually impedes our ability to compete on the global market, we will lose those markets because customers will find other places to buy what they need.”

In addition, that’s money that could be reinvested into a farm.

“Our barns are more efficient, and we look at different energy sources, and we look at water management tools,” he said. “But these initiatives take time, and they take dollars. Our margins are razor thin as it is. If the government continues to take from that, how are we supposed to adopt these advancements?”

The proposed Bill C-234 amendment is even more frustrating for producers considering the prime minister’s recent announcement.

On Oct. 26, Prime Minister Trudeau announced a three-year carbon tax exemption for home heating oil and a doubling of the rural top-up rate on the Climate Action Incentive Payment from 10 per cent to 20 per cent.

Supporting some people but not everyone doesn’t add up, Sibbald said.

“It sends mixed messaging,” he said. “And at the end of the day it’s probably a net loss for agriculture.”

Video: The Investment Opportunities of Industrial Hemp

The fledgling U.S. hemp industry is decades behind countries like Canada, France and China, but according to impact investor and this week’s podcast guest, Pierre Berard, it could flourish into a $2.2 billion industry by 2030 and create thousands of jobs.

To reach its potential, what the hemp industry needs most right now, Berard said, is capital investment.

Last month, Berard published a report titled “Seeing the U.S. Industrial Hemp Opportunity — A Pioneering Venture for Investors and Corporations Driven by Environmental, Social and Financial Concerns” in which he lays out the case for investment.

It’s as if Berard, with this report, is waving a giant flag, trying to attract the eyes of investors, saying, “Look over here. Look at all this opportunity.”

Berard likens the burgeoning American hemp industry to a developing country.

“There is no capital. People don’t want to finance. This is too risky. And I was like, OK, this sounds like something for me,” he said.

As an impact investor who manages funds specializing in agro-processing companies, Berard now has his sights set on the U.S. hemp industry, which he believes has great economic value as well as social and environmental benefits.

He spent many years developing investment in the agriculture infrastructure of developing countries in Latin America and Africa, and said the hemp industry feels similar.

“It is very nascent and it is a very fragmented sector. You have pioneers and trailblazers inventing or reinventing the field after 80 years of prohibition,” he said. “So I feel very familiar with this context.”

On this week’s hemp podcast, Berard talks about the report and the opportunities available to investors in the feed, fiber and food sectors of the hemp industry.

Building an industry around an agricultural commodity takes time, he said. According to the report, “The soybean industry took about 50 years to become firmly established, from the first USDA imports in 1898 to the U.S. being the top worldwide producer in the 1950s.”

Berard has a plan to accelerate the growth of the hemp industry and sees a four-pillar approach to attract investment.

First, he said, the foundation of the industry is the relationship between farmers and processors at the local level.

Second, he said the industry needs what he calls a “federating body” that will represent it, foster markets and innovations, and reduce risk for its members and investors.

The third pillar is “collaboration with corporations that aim to secure or diversify their supply chains with sustainable products and enhance their ESG credentials. This will be key to funding the industry and creating markets,” he said.

The fourth pillar is investment. Lots of it. Over $1.6 billion over seven years. This money will come from government, corporations, individual investors, and philanthropic donors.

The 75-page report goes into detail about the hemp industry, its environmental and social impact, and the opportunities available to investors.

Read the report here: Seeing the U.S. Industrial Hemp Opportunity

Also on this episode, we check in with hemp and bison farmer Herb Grove from Brush Mountain Bison in Centre County, PA, where he grew 50 acres of hemp grain. We’ll hear about harvest and dry down and crushing the seed for oil and cake.