Grainswest Tech 2021

Tech 2021 grainswest.com 35 where it was expected to be approved. The private member’s bill put forward by Conservative MP Philip Lawrence, would exempt farm fuels including propane and natural gas from the federal carbon tax. Senate talks stalled out and the bill had not been approved when the upper house adjourned for summer. With the Senate scheduled to resume sitting by the fourth week of September, it could still become law. However, if rumblings of a federal election come to fruition, the bill dies on the order paper. In farmer survey results released by the Canadian Federation of Independent Business (CFIB) early in 2020, respondents estimated they would pay on average almost $14,000 in federal carbon tax in 2019/20, the first year it applied to them. “These costs hamstring the farmer’s ability to compete, and paradoxically, invest in new technology to be even more efficient,” said Virginia Labbie, CFIB senior policy analyst. Whether or not farm fuel tax exemption legislation is passed the carbon tax will impact farmers indirectly through service costs, such as rail and road transportation. Todd Lewis, president of the Agricultural Producers Association of Saskatchewan (APAS), said farmers also pay for industry efficiency gains. For instance, freight rates have paid for high- capacity grain hopper cars but subsequent rail industry cost savings are not passed on to farmers. To better assess how the federal carbon tax directly impacts farmers, APAS conducted an internal analysis using cost of production and yield data. It found the $20 per tonne tax rate cost the average Saskatchewan grain farmer $1.74 per acre of additional production and marketing costs for wheat in 2019. At $40 per tonne, this rose to $2.93 in 2021. The estimated cost by 2030 is $12.52 per acre. Lewis is also uneasy about unintended environmental consequences. “When you add costs to a producer’s bottom line it creates incentives to convert grasslands and other natural carbon sinks into cropland just to remain viable,” he said. “That works directly against the goals of the policy.” Southern Alberta grain and beef farmer Josh Fankhauser admits he’s taken out more grassland than he’s put in in recent years. Although he’s an ecologically minded farmer, economics forced his hand. “If they want us to leave large swaths of grassland in, somebody’s going to have to pay,” he said. This raises additional concerns. Layering regenerative practices atop an existing system doesn’t necessarily lower emissions. And while they’re taxed for emissions, farmers aren’t incentivized to lower them. Furthermore, if farmers want to be rewarded for good practices, shouldn’t they be penalized for poor practices? Fankhauser believes so, acknowledging that he would be punished for converting grassland. STRONGER TOGETHER Agriculture’s fight against the carbon tax has had the positive result of strengthening industry co-operation on carbon-related issues. Concerned about the tax’s potential impact on cost of production and, ultimately, Canadian competitiveness in the global market, 14 Canadian farm organizations have formed the Agriculture Carbon Alliance (ACA). The coalition provides carbon policy feedback to legislators and works to ensure policymakers recognize Canadian farmers, specifically early adopters, for sustainable practices through offsets, rebates and exemptions, particularly for grain drying and irrigation. Strong policy supports farmers while maintaining competitiveness and leverages their role as land stewards, said Dave Carey, ACA co-chair and vice-president of government and industry relations for the Canadian Canola Growers Association. “Achieving on-farm exemptions would be a huge win if we’re able to do that,” he added. “Because that is where farmers will feel that hit of the carbon tax—on their propane and natural gas costs.” Team Alberta, which represents Alberta Barley, Alberta Canola, Alberta Pulse Growers and the Alberta Wheat Commission, shares ACA’s concerns. Without offset measures, the organization believes Alberta’s crop farmers could lose international competitiveness. The group is now two years into a three-year study that will evaluate the efficiency of existing grain drying systems “That is where farmers will feel that hit of the carbon tax— on their propane and natural gas costs.” —Dave Carey