According to ag-minister Bibeau, carbon tax on grain drying insignificant

"It comes back to competitiveness and what makes sense and it seems in this industry and in this country right now we are just shooting ourselves in the foot..." – Warren McCutcheon

“Frustration.”

That’s the word Bill Campbell and Warren McCutcheon both independently used to describe their reaction to federal agriculture minister Marie Claude Bibeau saying the carbon tax collected from farmers’ drying grain is so small an exemption isn’t warranted.

“It’s frustrating when she asks for the data (on grain drying costs) and she won’t be transparent in their analytical process,” Campbell, president of the Keystone Agricultural Producers, said in an interview June. 10. “To me it is purely political positioning.”

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The carbon tax on grain drying was not insignificant on his farm near Homewood in 2019, McCutcheon said in an interview June 11.

“It’s extremely frustrating and feels like a continuous slap in the face to Western Canada as well,” he said. “This is where most of the grain drying is done and for the Liberals there are no votes out here. Why would they throw us a bone?”

[AUDIO] Federal Agriculture Minister Marie-Claude Bibeau on deciding to not waive the carbon tax on farm fuel.

McCutcheon estimates the carbon tax on drying the corn he harvested form 600 acres last year was about $3 an acre, or $1,800.

“That’s not insignificant,” he said, adding corn was only a small part of his 2019 acreage.

“It comes back to competitiveness and what makes sense and it seems in this industry and in this country right now we are just shooting ourselves in the foot every which way we can,” McCutcheon said. “Corn is coming in from North Dakota. They don’t have a carbon tax and we continue to raise the carbon tax on grain drying so that’s going to make that crop for Canadian producers less and less competitive.”

Based on data Bibeau received from farm groups and analysis done by Agriculture and Agri-Food Canada (AAFC) the carbon tax collected from grain drying was a small percentage of farmers’ operating costs, Bibeau told reporters June 9 during a video conference.

“The estimates range from $210 to $819 per farm and 0.05 per cent to 0.42 per cent of total farm operating expenses,” she said.

“So if we were to move forward with these data (and provide an exemption) many other businesses would also fall into the same level of impacts. This pollution pricing policy is an important part for a greener economy and for more sustainable development.

“I don’t think waving the price on pollution is the right approach, but we want to recognize the farmers for the good things they are doing for the environment and we have more work to do on that.”

Both Campbell and McCutcheon suspect AAFC’s numbers are low because it includes farmers who didn’t dry grain.

“If you talk to someone who dried 20,000 bushels of wheat and he said his carbon bill was $200 I would challenge that,” Campbell said.

“We had copies of invoices for propane and natural gas so for her to suggest that it is insignificant maybe on every farm in Canada maybe it is insignificant when you spread it out but when you are the one paying the bill it’s huge for some guys.”

Based on data provide by the Manitoba Corn Growers Association, KAP estimated last fall Manitoba corn growers collectively paid $1.7 million in carbon taxes levied on propane and natural gas used to dry grain.

There were just over 396,000 acres of insured corn in Manitoba in 2019. If the carbon tax averaged $3 an acre that would total almost $1.2 million.

“It’s just really frustrating that the government doesn’t get that,” McCutcheon said. “In my mind it just seems like a cash grab, especially when you go after someone like a farm where we don’t have any other option for grain drying.”

However, an official from Bibeau’s office said some of the carbon tax revenue is available to farmers to make their grain dryers more efficient, resulting in lower fuel consumption, lower carbon emissions and less carbon tax.

The official also said on average Manitoba families received around $500 in carbon tax rebates in 2019.

Campbell said Ottawa isn’t treating all farmers the same way. Greenhouse operators are exempted from the carbon tax on 80 per cent of their heating costs, but fuel for drying grain and heating livestock barns is not.

“Is there any difference between raising a tomato and raising a hog or a chicken or an egg? She (Bibeau) hasn’t addressed that at all,” Campbell said. “We know for animal welfare and food security we need to be able to supplement heat for livestock barns, especially in Manitoba, in the wintertime. And she just ignores those basic principles of equity and fairness. And I would suggest some of those exemptions are in areas of political positioning (where the government hopes to win elections).

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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