Canadian farmers face higher costs amid concerns of farmer shortage over next decade

Saskatchewan farms will pay over $40 million in carbon tax just to get their products to port. This is money that comes right out of rural Saskatchewan.

  • Rebel News
  • April 18, 2023
  • News Analysis
Canadian farmers face higher costs amid concerns of farmer shortage over next decade
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By 2033, more than 40% of farmers will retire, leaving Canada with a shortage residents can only fill partially. Nearly two-thirds (66%) also lack a succession plan to address that inevitability.

Experts continue to sound the alarm of a looming wave of retirements as baby boomers exit the workforce at a critical juncture for Canada's agricultural sector. 

According to the Royal Bank of Canada, Canada needs to replace 24,000 farmers and greenhouse operators over the next decade. A recent report by the bank contends 30,000 immigrants need to assume farming and greenhouse operations or establish their own by 2033 to fill that void.

While Ottawa champions emissions reductions to meet climate targets, Canada must also produce significantly more food for a growing world population.

However, the Agricultural Producers Association of Saskatchewan (APAS) claimed the federal carbon tax regime disproportionately harmed Saskatchewan's agricultural sector.

"These additional costs come off our bottom line because we're price takers who sell into international markets," said APAS President Ian Boxall. 

On April 1, the federal carbon tax increased to $65 per tonne and will continue to rise by $15 per tonne until it reaches $170 by 2030.

"The impact of these costs on our farm operations needs to be recognized to ensure we can remain competitive in international markets," said Boxall. "Saskatchewan farms [will] pay over $40 million in carbon tax just to get their products to port. This is money that comes right out of rural Saskatchewan."

APAS noted that farmers lack market access and bear significant costs from carbon taxes on fuel to transport goods to tidewater. Typically, Saskatchewan grain production travels 1,150 miles to port, with the carbon tax costing $0.1129 per railcar mile this year or over $36 million on 26 million tonnes of grain.

"Farmers feel the impact of these costs in the prices they receive at the farm gate," continued Boxall. "The Canadian senate will also soon review Bill C-234 to exempt carbon charges on propane and natural gas for barn heating and grain drying."

On March 29, all federal opposition parties passed Bill C-234 to prevent Ottawa from charging a carbon tax on natural gas and the propane used to dry grain and heat livestock barns.

Boxall said the importance of expediting this Bill could not be understated. "This is a cost that producers see on their monthly bills, and there are no available fuel alternatives with current technology," he added.

"Farmers will pay more in barn heating or grain drying each month than they will ever see in rebates. We see these costs in our monthly bills and feel them trickle down to us through higher input costs and reduced commodity prices throughout the supply chain." 

Tim Gray, executive director at Environmental Defence, suggested Ottawa give farmers tax rebates to mitigate carbon tax costs. In a release, they acknowledged farmers "do not yet have a full suite of options to replace fossil-fuelled grain dryers and barn space heating."

"Exempting these high-emission activities from carbon pricing for farmers will only further encourage other sectors to demand similar treatment," he said, pointing to ongoing problems with this in other sectors, particularly the oil and gas industry.

However, the APAS stressed the importance of exempting farmers to "recognize the competitive impact these costs are having on [their] bottom lines."

Ostensibly, the governing Liberals took offence to the exemptions granted in March.

"It's disappointing to see the NDP, the Green Party, and the Bloc — parties who claim to be progressive — vote alongside the Conservative Party to effectively weaken climate action in Canada," said Environment and Climate Change Minister Steven Guilbeault.

"Our government will always stand up for putting a price on pollution, which has long been recognized by people on both the right and the left as the best market-based approach to cutting greenhouse gasses and driving cleaner technologies."

However, three Liberal MPs favoured the Bill, including Heath MacDonald, Robert Morrissey, and Kody Blois.

The carbon tax is a "highly charged issue that matters in [Blois'] agrarian riding," which made it sensible for him to vote against his party, said Alex Marland, professor and head of the Department of political science at Memorial University.

On March 20, Boxall spoke to the Commons Standing Committee on Agriculture and Agri-Food about the rising cost of food. He chimed in on the importance of transparency throughout food supply chains. 

Boxall also said the current policy needs to recognize that the carbon tax harms food affordability and farm margins. If Bill C-234 fails, Guilbeault said his government would mitigate the costs of climate change caused by natural disasters like floods, storms, and wildfires that walloped farmers.

 

Alberta Canada Carbon Tax News Analysis
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