Saskatchewan pinched farmers decry carbon tax hike

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Dickson Delorme, who farms near the town of Foam Lake, Sask., says he stockpiled fuel weeks ago to prepare for the federal carbon tax hike.

As planting season is about to begin, many Saskatchewan farmers are looking to save where they can as inflation, rising fuel and fertilizer prices and near-record drought in the last year continue to put pressure on their results.

“We are entering our busy season and the government is saying, ‘By the way, when everything is completely in the trash and no one can afford to live, we are going to make your life more expensive,'” Delorme mentioned.

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On Friday, the federal carbon price fell from $40 a ton of greenhouse gas emissions to $50. This adds 2.2 cents per liter of gasoline, which means the carbon tax now amounts to a total of 11 cents at the pump.

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The federal tax applies to Alberta, Manitoba, Ontario and Saskatchewan, which do not have programs regulating emissions from electricity generation and natural gas transmission.

While farm fuel is exempt from the carbon tax, Delorme said producers pay for it in other ways through the costs of heating, grain drying and fuel to transport produce to market.

“You can look anywhere between $500 and $1,000 per charge, depending on how far that charge is heading,” Delorme said. “(Commercial trucking companies) can’t afford to build it into their rates anywhere, so it comes right back to farmers as a charge on their trucking bill as a fuel surcharge.”

In 2021, a bill passed the House of Commons to exempt natural gas and propane from the carbon tax if used to dry grain. But the bill died when the federal election was called. A new bill has since been tabled, but has not yet been passed.

Agriculture is responsible for 10% of Canada’s total carbon dioxide emissions, with more than half of the sector’s emissions coming from Alberta and Saskatchewan.

However, agricultural soils are also an important carbon sink, offsetting about 6% of total annual agricultural emissions, according to the federal government’s 2030 Emissions Reduction Plan.

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Ian Boxall, president of the Agricultural Producers Association of Saskatchewan, said it’s a common misconception that farmers aren’t hit by the tax or that they get it back entirely through rebates.

He said the average Saskatchewan farmer was paying up to $10,000 more a year in taxes, before the planned increase.

“It’s an expense that comes directly from our bottom line. We don’t have the ability to pass that cost on to our customers because we’re price takers with the products we sell,” Boxall said.

Earlier this month, the Office of the Parliamentary Budget Officer said those charged with the levy were paying more in carbon tax than they were getting back.

“Under the government’s plan (A Healthy Environment and a Healthy Economy), most households in Alberta, Saskatchewan, Manitoba and Ontario will experience a net loss from federal carbon pricing” said Parliamentary Budget Officer Yves Giroux.

“That is, the costs they face — including the federal carbon tax, higher GST, and lower revenues — will outweigh the climate action incentive rebate they receive.”

While the carbon tax has been in place since 2019, Boxall said the recent increase was different.

“Producers are affected in the same way as anyone else with inflation and everything that happens, like the conflict in Ukraine. The additional costs are not necessary at this time,” said Boxall, who operates a farm near the town of Tisdale.

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Environment Minister Steven Guilbeault did not respond to a request for comment. But throughout March he resisted political pressure from prime ministers and MPs to temporarily suspend the increase.

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Earlier this month, Premier Scott Moe reiterated Saskatchewan’s desire to gain regulatory control of the carbon pricing plan, including its revenues, which he said would be distributed to consumers and industries like agriculture, as well as invested in green initiatives.

“We have officially requested this from the federal government. I don’t believe we’ve heard of it yet, but I hope — and I’ve communicated this with the deputy premier — that we’ll look for it in the federal budget,” Moe said.

Saskatchewan’s first carbon pricing plan was rejected by Ottawa in July 2021.

The federal government has said it will not consider new submissions until next year.

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© 2022 The Canadian Press

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