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Carbon tax alarms agriculture groups

Too heavy-handed regulation that’s out of step with other countries could put Canadian farmers at a disadvantage

Proposals for a carbon tax to help reduce emissions that cause climate change pose a major threat to Canadian farmers, says the Western Canadian Wheat Growers Association.

Canadian farmers already have to cope with a tough climate, says Robin Speer, WCWGA executive director.

“They’re already producing more food while using less land, water and fuel per bushel,” Speer said.

New crop varieties, fertilizers and production practices have boosted production, already giving the sector an impressive track record of improvement in recent years.

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“But Canadian farmers are worried a carbon tax will undercut their ability to compete with farmers around the world without actually protecting the environment,” he said.

Ron Bonnett, president of the Canadian Federation of Agriculture, said it’s essential that Canada move in step with the United States in adopting measures to fight climate change.

“If we end up with a carbon cost different than our competitors, the agri-food sector will be in trouble,” he said.

The CFA and its members are discussing how to respond to carbon tax proposals.

“We know action has to be taken but there’s such a mix of proposals coming forward,” Bonnett said.

One point farm groups need to make is that agriculture deserves credit for all the steps it has taken to reduce its carbon footprint.

“We’ve made tremendous changes to increase production while reducing our emissions,” Bonnett said.

There are steps governments could take to help such as supporting methane digesters for livestock operations and giving farmers credit for the carbon sink capability of their land.

“The key item is for governments to be careful about not leaving us at a competitive disadvantage,” he said.

Speer points out that American and Australian farmers won’t be hit with a carbon tax. In fact Australia tried and discarded one.

“The climate matters to farmers – a timely rain or an early frost can be the difference between staying afloat or handing the farm over to the bank after a foreclosure,” he said. “But farmers are worried that carbon taxes will threaten their way of life without protecting the environment.”

He notes a John Deere S690 combine has a fuel tank that holds 1,155 litres. British Columbia is charging a carbon tax of 7.7 cents per litre of diesel.

“That means farmers would pay $89 in carbon taxes per fill during harvest, and it requires many tanks of fuel to take off millions of tonnes of grain every year,” Speer said.

He also cautions against simply exempting farmers from a carbon tax. While British Columbia has done that, farmers’ livelihoods would remain at risk.

If farmers are exempted, someone else will have to bear a disproportionate burden to meet emission reduction targets. The Manitoba government estimates that agriculture accounts for 30 per cent of that province’s greenhouse gas emissions. “Exempting agriculture would force others to reduce more emissions and that affects farmers,” he said.

For example, agriculture depends on nitrogen fertilizer, which is energy intensive to produce.

“Canadian fertilizer producers work hard to minimize emissions, but a carbon tax would force them to raise prices,” Speer said. “That would force Canadian farmers to make a difficult decision: Pay a higher price for Canadian fertilizers or buy them from other countries? And again, how would it help the environment to put Canadian fertilizer plants out of business while plants in other countries expand?”

Marc Lee, an economist at the Canadian Centre for Policy Alternatives, says that since B.C. implemented a carbon tax, its greenhouse gas emissions have risen every year.

“Since 2010, B.C.’s GHG emissions have increased every year,” he said. “As of 2013, they are up 4.3 per cent above 2010 levels. To be truly effective, carbon taxes will need to be much higher than B.C.’s current rates.”

So paying 7.7 cents in tax per litre of diesel isn’t enough to reduce emissions, Speer says.

“Canada accounts for 1.6 per cent of global emissions,” Speer said. “How high would Canada’s carbon tax have to be to have a practical impact, especially if other countries aren’t imposing carbon taxes on their people?”

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