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Carbon costs affecting grain drying for Prairie farmers

Glacier FarmMedia – Farmers in Manitoba, Saskatchewan and Alberta struggling to get their crops harvested will also be paying higher costs for drying thanks to the federal carbon levy.

While the federal carbon price offers relief for gasoline and light fuel oil costs used in tractors and trucks, there is no exemption for grain drying or heating.

Saskatchewan’s Association of Rural Municipalities (SARM) is tracking the costs associated with carbon pricing throughout the year, including fees associated with grain drying.

“We’re concerned not only about the cost of drying, but the added cost the federally imposed carbon tax has put on producers,” said president Ray Orb.

Additional fees from the carbon pricing scheme range from an estimated $2,000 to $4,000, depending on the size of the operation.

“We think that should not be there because farmers are already under a lot of duress dealing with the weather, they certainly don’t need anymore taxes imposed on them,” said Orb.

It’s an issue his group, and others, will continue to raise with the newly-elected minority Liberal government.

Saskatchewan’s premier complained openly to reporters about grain drying costs after Prime Minister Justin Trudeau’s re-election, saying costs are “significant.”

He referenced receiving a text from a farmer who has dried over two million bushels of grain.

“I don’t know what he’s getting back in his carbon tax rebate, but it most certainly isn’t going to offset the carbon tax that he’s going to spend in one month drying his product.”

Federal background documents on the carbon tax say an average family of four in Saskatchewan can expect to receive around $903 in 2020, with another 10 per cent available to those in small or rural communities.

Saskatchewan’s government is anticipating the total carbon tax costs for grain drying for individual producers to be in excess of the rebate they receive.

But the provincial government is not requesting any relief funding to assist farmers with the added costs this year. Instead, the Saskatchewan government is reminding farmers crop insurance assists with costs from quality and yield loss.

Fuel used for grain drying is also an eligible expense under AgriStability.

Keystone Agricultural Producers (KAP) noted in a statement the “Made in Manitoba Climate and Green Plan” exempted grain drying from carbon costs; but that plan was scrapped last October and the province now falls under the federal backstop, meaning that similar to Saskatchewan and Alberta, Manitoba producers are not exempt from paying carbon costs for drying grain.

KAP said it will “continue to lobby” for an exemption at the federal level.

It is unknown how much revenue will be collected by the Canadian government as a result of grain drying costs, because the Ministry of Finance does not make that information available.

In a statement, the federal government said, “By law, the Government of Canada must return all direct proceeds from the federal carbon pollution pricing system to the province or territory of origin.”

In Alberta, Saskatchewan and Manitoba, proceeds are largely being returned directly to individuals at tax time through the carbon rebates.

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