Agriculture groups seek exemption to carbon tax

Farmers use natural gas, propane to dry grain and keep barns heated

Agricultural groups in Saskatchewan, Manitoba and Alberta are calling on Ottawa once again to pass a bill that will exempt farmers from paying the carbon tax on propane and natural gas used for grain drying and heating barns before June 30.

“We do not have alternatives to propane and natural gas for grain dying and barn heating, and we rely on the weather,” said Agricultural Producers Association of Saskatchewan president Ian Boxall.

“It's bad enough that Saskatchewan farm families are paying an estimated $40 million in carbon tax to ship grain to port — we should not have to be burdened with an additional $10 million grain drying tax when there are no alternatives.”

Bill C-234, which was introduced in 2019 after a brutally damp harvest season, would amend the federal Greenhouse Gas Pollution Pricing Act, exempting natural gas and propane from the carbon tax like gasoline and diesel.

Conservative MP Warren Steinley, who is on the Standing Committee on Agriculture and Agri-food, believes that some senators and MPS may not understand the ins and outs of farming enough to make an educated decision.

“There's a lack of understanding in what happens on a farm these days and we don't have many representatives from rural Canada anymore,” said Steinley.

“There are a lot of urban seats, and there might be a little bit of a disconnect,” said Boxall, adding that there could be politics within the politics at play.

“We just need to continue to tell our story and how important agriculture is in Saskatchewan and to Canada,” said Boxall.

Tim Gray, executive director of Environmental Defence, a Canadian advocacy group, said that while the group recognizes that there aren't a lot of options to replace fossil fuelled grain dryers and barn space heating, exempting carbon pricing for farmers will only further encourage other sectors to demand similar treatment.

“This is already a problem as many industries, especially the oil and gas sector, have successfully lobbied for, and achieved, favourable treatment, which allows them to pay a much lower carbon price than others, regardless of their lack of actual degree of being energy intensive and trade exposed,” said Gray in a statement.

But with no other alternatives to propane and natural gas, some farmers could be stuck paying around $150,000 a year in carbon tax.

“I don't know any business that can take that kind of hit,” said Steinley.

Although farmers do get a rebate on their emissions and an exemption on gasoline and diesel, Boxall said it isn't enough.

“The carbon tax that we pay on rail freight, on trucking freight, on every single part we buy, every ton of fertilizer, out-measures any rebate we would ever get,” said Boxall. “And there is no alternative.”

With only two weeks before the Senate breaks for the summer, Steinley said that chances of the bill passing are low.

“We've seen that the Liberals in the Agriculture Committee in the House didn't vote in favour of this bill,” said Steinley. “So, it has a slim chance to pass this session.”

The bill has to go through debate and then a third reading before passing.

Boxall, however, is confident that the bill will pass in time.

“I think that the Agricultural Committee and the Senate understands the importance of this bill and the importance of agriculture in the country,” said Boxall. “I'm positive and I'm confident that they will get this done.

“If it doesn't, maybe our systems let us down a little bit.”