Farmers shouldn’t pay the carbon tax to dry grain from the 2019 crop year, the party said
By Diego Flammini
One of Canada’s federal parties is standing with farmers and lobbying the federal government to implement a carbon tax exemption for drying grain from the 2019 crop year.
“We support the grain producers of Canada in their appeal to the federal government to waive the carbon tax on fuel used for grain drying during last year’s harvest,” Paul Manly, agriculture critic for the Green Party of Canada, said in a Jan. 20 statement. “The disruption and expense of last year’s weather-plagued harvest is already causing widespread hardship. Carbon tax relief is justified and necessary.”
The Green Party’s support for the exemption is a sign that applying the carbon tax on grain drying operations isn’t logical, said Gunter Jochum, a Manitoba farmer and president of the Western Canadian Wheat Growers Association.
“It shows that people all along the political spectrum, from those with conservative, social and green views, think that having the carbon tax on fuel for grain drying just doesn’t make sense,” he told Farms.com.
Some ag fuels are already exempt from the carbon tax.
Fuels that are delivered to a farm or used to operate machinery for example, aren’t subject to the carbon levy.
Applying the tax to grain drying operations seems counterproductive, Jochum said.
“If farmers get exempt for the fuel used to put the crop in, why wouldn’t we be exempt from the fuel we need to properly condition the grain for long-term storage or export for an end-use market?” he said.
One issue with the carbon tax is that it applies to natural gas and propane, which are the two primary resources used for grain drying.
Without any alternatives, farmers are forced to pay the additional operating expenses.
“The carbon tax was designed to make (industries) look for alternative fuels or energies,” Jochum said. “But for grain drying we only have two options. So, until another fuel source is available to dry grain, we’ll be backed into a corner and forced to pay the tax on drying.”
Growers who have their own grain-drying setup will see the carbon tax as a line item on their energy bills. Conversely, producers who take their grain to an elevator won’t see the carbon tax on those bills.
“The carbon tax is built into the cost of drying the grain,” Jochum said. “Farmers don’t really know how much it is but, believe me, it’s there. The elevator pays the carbon tax and then passes the cost onto the farmer. As primary producers, we can’t pass on any costs. Meanwhile, every other industry is able to do that.”
The Liberal government may take steps to remove the carbon tax on grain drying.
“We have committed to doing an early review of our pollution-pricing system this year focused on competitiveness issues in trade-exposed industries, such as agriculture,” Sabrina Kim, press secretary for Environment Minister Jonathan Wilkinson, told the National Post.
Loose discussions have taken place with Agriculture and Agri-Food Minister Marie Claude Bibeau, but nothing has been made official yet, Jochum said.
“Minister Bibeau has said she wants more information before making a decision, and we’ve stepped up to say that we’d like to meet and give her more information,” he said. “It’s been awfully quiet; we haven’t heard a positive response and it’s very unfortunate.”