Carbon tax on grain drying fuel not "significant" enough to qualify for an exemption, Bibeau says


Agriculture and Agri-Food Canada (AAFC) has crunched the numbers on the carbon tax applied to grain drying bills and says it’s simply not a significant enough amount of overall costs to be exempt from the tax.

Minister Marie-Claude Bibeau held a Zoom conference call to announce a second intake for the Local Food Infrastructure Fund, but in the question and answers portion of the call, Bibeau said that AAFC has analyzed the carbon tax data submitted to the department several months ago and found the amount paid for the “price on pollution” was not significant enough.

Bibeau adds that the existing exemption covers the significant uses of fuel, such as on bulk and cardlock systems (after an exemption is filed) and heating for greenhouses. The data tax program that AAFC used figured out the cost of carbon tax on a per-farm basis as a percentage of total operating costs. When averaged over all farms, the cost was $210 to $819 per farm, or 0.05 per cent to 0.42 per cent of total farm operating expenses. Greenhouse heating, for example, accounts for about 7 per cent of operating costs, Bibeau says.

She says that “waiving the price on pollution” is not the right way forward.

Producer groups had provided the minister’s office with costs paid and estimates of the larger picture of the carbon tax paid by farmers. Saskatchewan farmers, for example, are estimated to lose 8 per cent of their total net income in 2020 to the carbon tax, according to the Agricultural Producers Association of Saskatchewan (APAS). For a household managing a 5,000-acre grain farm in Saskatchewan, this will take the form of an $8,000 to $10,000 bill. This estimate includes all costs of the carbon tax, not on grain drying only.

Many farmers last fall posted photos of their propane and other fuel bills with added thousands in carbon tax. Last fall, several areas of the Prairies and Ontario were faced with a cold, wet, extended harvest season, and had to dry grain, including wheat, corn, canola, and more, to safely store the crop or risk it spoiling. Last fall’s harvest weather forced some farmers to delay harvest until this spring, leading to significant losses of the crop and downgrades in quality.

Watch Shaun Haney discuss Minister Bibeau’s comments on RFD-TV

Wake up with RealAgriculture

Subscribe to our daily newsletters to keep you up-to-date with our latest coverage every morning.

Wake up with RealAgriculture

Please register to read and comment.


Register for a RealAgriculture account to manage your Shortcut menu instead of the default.