Carbon tax exemption for farmers not likely to pass Senate before summer recess: reports

For the average farmer, the costs of a more significant tax burden would eat into their margins an additional $150,000 by 2030.

  • Rebel News
  • June 21, 2023
  • News Analysis
Carbon tax exemption for farmers not likely to pass Senate before summer recess: reports
Rebel News
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With the federal summer recess only days away for Parliament, farmers across Canada expressed grave discontent over paying a carbon tax on agricultural practices.

The Alberta Federation of Agriculture, Agricultural Producers Association of Saskatchewan (APAS), and Keystone Agricultural Producers (FAP) want Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act, to pass this month.

"We understand that senators are looking forward to enjoying the summer season," said Ian Boxall, president of APAS, in a joint statement. "Prairie farmers want to enjoy theirs knowing this bill is passed so they can look forward to the fall harvest."

However, there has been no activity on the bill since June 13 — when the Senate completed its Second Reading of the legislation.

While the House of Commons supported the bill, exempting farmers from paying the first carbon tax, the Canadian Taxpayers Federation (CTF) said the vote does not exclude them from paying the Clean Fuel Regulations tax, which many consider a 'second carbon tax.'

"On July 1, Canadians and farmers are getting hit with another carbon tax. Trudeau's government is bringing in their second carbon tax through clean fuel regulations," said Gage Haubrich, Prairie Director for the CTF.

He warned it would cost taxpayers approximately 17 cents per litre of gas and 16 cents per litre of diesel at the pumps. "A farmer could be expected to pay over $200 in carbon taxes every time they fill up," said Haubrich.

According to a Parliamentary Budget Office (PBO) report, the second carbon tax will cost the average non-farming household between $384 and $1,157 in 2030, depending on the province. Saskatchewanians will pay $1,117 annually per family.

"I have real concerns about the added burden farms across Saskatchewan, and the prairies will be forced to absorb," said Boxall. "This bill needs to be passed by the Senate before June 30."

In 2022, the Standing Committee on Agriculture and Agri-Food amended Bill C-234 to exempt natural gas and propane from the carbon tax when used to dry grain and heat livestock barns.

If passed, Parliament will maintain the exemption for eight years, which MPs can extend if viable technologies are unavailable.

However, Mike Ondrejicka, a grain farmer from Ontario, told CTV that although the carbon tax exemption "is a good thing for farmers, in theory," he said it doesn't apply to commercial elevators that dry corn.

Ontario's approximately 300 commercial grain elevators dry three-fifths of the province's corn, beans and grains — and the relief provided by Bill C-234 would not be extended to them like farmers.

"For us, it's hundreds of thousands of dollars. It's a significant cost that we have to pass on. We cannot absorb that amount [when] the carbon tax continues to escalate until it peaks in 2030," said Ondrejicka.

He decried not being included in the tax exemption alongside farmers, as "we're doing the same job as the farmer."

Conservative MP Ben Lobb, who tabled the bill, supports including commercial grain drying elevators as part of the exemption. However, he informed Canadians he would not get the bill through Parliament if that happened.

"If we could have had support from all the political parties, we could have pushed it through all three stages in one shot and sent it to the Senate, and everybody would have been happy," said Lobb. "Unfortunately, we had no support from the other parties." 

"If Pierre Polievre were ever prime minister, the carbon tax would be gone, and the whole discussion would be moot."

The Tory leader told the Commons last month that the carbon taxes and the HST on those taxes would cost families $0.61 in fuel taxes per litre for $2,000 annually.

However, with farmers not being exempt from the second tax, costs will still go up for farmers and consumers at the grocery store, according to Haubrich.

Per a 2019 Agriculture and Agri-Food Canada report, farmers in Saskatchewan paid $774 per farm — 51 cents per acre — in carbon taxes for drying grain. In Alberta, the cost was $210 per farm or 16 cents per acre. 

Manitoba farmers paid approximately $1.7 million in carbon taxes that year.

For the average farmer, the costs of a more significant tax burden would eat into their margins an additional $150,000 by 2030.

On March 20, Boxall told the agriculture committee that the carbon tax harms the competitiveness of local farmers with cheaper jurisdictions elsewhere. 

"Saskatchewan farms [will] pay over $40 million in carbon tax just to get their products to port," he said.

APAS noted farmers also 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, costing over $36 million on 26 million tonnes of grain.

"This is money that comes right out of rural Saskatchewan," Boxall told MPs.

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