Looking for clarity on government math regarding the "significance" of the carbon tax

An answer to a follow up question on a conference call by Agriculture and Agri-Food Canada minister Marie-Claude Bibeau struck a nerve last week. Bibeau said that the carbon tax on fuel used for grain drying wasn’t a significant enough percentage of operating costs to qualify for an exemption to the “price of pollution.”

In her example, Bibeau said that the ministry’s analysis showed the cost per grain farm to be between $200 and $900 per farm — amounting to just 0.05 per cent to 0.42 per cent of operating costs.

In a follow up call with the minister’s office, a spokesperson says that the analysis done in-house sought to stay “as true as possible” to the numbers provided by producer groups, and that the ministry intended to work through the numbers directly with groups in the coming weeks. The minister’s office did say that they averaged the tax paid on grain drying across all grain farms, regardless of acreage base, crop mix, or region.

For farmers in Ontario and Quebec and parts of the Prairies, 2019 featured the “harvest from hell,” requiring a huge portion of the crop to be dried. Many fields were left unharvested until this spring, at a significant loss to yield and quality, put soil at risk to rutting and compaction, and delayed the 2020 planting season.

Grain Farmers of Ontario (GFO)—representing Ontario’s barley, corn, oat, soybean, and wheat farmers—says that the cost of the carbon tax is far higher than that, and that farmers dry grain to avoid spoilage and food waste.

“The numbers are indisputable. It is simple math. We have run the numbers and the cost averaged to $5.50 per acre on corn, which means that on a 1,000 acre farm the carbon tax bill would be more than $5,000,” said Markus Haerle, chair, GFO. “That is really just the tip of the iceberg. We estimate that the cost of the carbon tax is $14 per acre if you take into account transportation, inputs, and more.”

The Agricultural Producers Association of Saskatchewan (APAS) signalled a similar message early this year when submitting its numbers, saying that while the total carbon tax paid on grain drying may only be substantial for some in hard-hit, poor weather areas, the overall carbon tax burden is much higher and amounts to 8 per cent of total net income — hardly insignificant.

APAS’s costing review takes into consideration all major farm expenses not currently exempt from the carbon tax. These include grain drying, rail transportation, heating and electricity, and off-farm hauling of crops.

In less than two years, when the carbon tax increases to $50/tonne in 2022, Saskatchewan farmers can expect an approximate 12 per cent decrease in net income, APAS says.

“We dry grains to avoid spoiling food. You can’t make bread from spoiled grain. In Ontario grain drying is often a necessary part of producing high quality, healthy, viable grains,” GFO’s Haerle says. “Every farmer is unique, every farmer has a different rotation of crops on varying numbers of acres, but no farmer can afford an increasing tax on producing food.”

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