Canadian Manufacturing

Feds and farmers disagree on cost carbon tax adds to grain dryers

The government decided against adding grain dryers to the list of carbon tax exemptions for farmers

June 11, 2020  The Canadian Press

OTTAWA – The federal government’s analysis of how much the carbon tax is costing farmers to use their grain dryers varies wildly from what Prairie farm groups say their producers are actually paying.

On June 9, Agriculture Minister Marie-Claude Bibeau said the government decided against adding grain dryers to the list of carbon tax exemptions for farmers.

She cited an internal analysis from her department that used the Agriculture Taxation Data Program to calculate that the carbon tax applied to grain dryers would cost an individual farm between $210 and $819 per year – far less than farmers say they’re paying.

She said that is at most 0.42% of revenues, which is not high enough to warrant exempting grain dryers as was done for fuels used to heat greenhouses or run farm vehicles.

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“The carbon tax is something that is important for the future of our country and the new generation,” Bibeau said, when she was asked about the grain dryers decision at a House of Commons agriculture committee meeting on June 10.

Bibeau’s spokesman initially said the analysis wasn’t going to be made public at this time and instead pointed to a two-year-old report that estimated the costs the carbon tax could add to farms overall. Late June 10 however, The Canadian Press was told details would be made public June 11 to explain how Agriculture Canada officials arrived at the numbers cited by Bibeau.

The carbon tax, which began being applied in provinces without an equivalent provincial system last year, is not applied to input fuels to run farm vehicles, and is also only partially applied to fuels to heat commercial greenhouses. But it is applied fully on the propane and natural gas used in grain dryers.

After a particularly wet fall on the Prairies in 2019, provincial governments lobbied Ottawa hard to reconsider and exempt grain dryers, which are used by farmers to ensure wheat, barley, corn, canola and other grains can be stored without going bad.

Todd Lewis, the president of the Agricultural Producers of Saskatchewan, said this past winter grain dryers were running “for record amounts of time” and as the total bills are coming in they are showing some farmers paid out $10,000 in carbon tax alone for the propane or natural gas used to run the dryers.

Lewis said the fall was so wet some farmers did not harvest a single acre that did not need to go to a grain dryer.

Bill Campbell, the president of Keystone Agricultural Producers in Manitoba, said grain dryers are the only way some of the crops can be harvested at all. He said as it was, more than 450,000 acres in Manitoba were not harvested last fall because they were too wet.

Much of the rest had to go into a grain dryer. Keystone calculated that corn growers paid about $3 an acre in carbon tax for drying their product, or $1,500 for a 202-hectare (500-acre) corn field.

At the committee June 10, Alberta Conservative MP John Barlow asked Bibeau to explain exactly how her department calculated the cost at between $210 and $819, because he said his office has been flooded with bills submitted by farmers that show some are paying as much as 10 times that amount.

“You aren’t able to answer where you got this data from that is completely out of touch with what the reality is on the ground,” said Barlow.

“I would hope that you’re able to back up this data.”

When Ottawa exempted input fuels for farm vehicles it was partly because there are no real alternatives for greener farm equipment yet.

Lewis said there are no alternative fuels for grain dryers either, although technology has made the newer ones more efficient.

Lewis said the irony is that climate change is requiring farmers to use grain dryers more than ever and the carbon tax is hurting their profits so much they can’t afford to invest in the technology to make them better for the environment.

Carbon taxes are supposed to be an incentive to make such investments.

– Mia Rabson