Carbon tax rebate on grain-drying fuels coming

MP Jim Carr, special representative for the Prairies, reiterated Agriculture Minister Marie-Claude Bibeau’s pledge

Farmers can expect a rebate on carbon taxes paid on fuels used to dry grain, Jim Carr, the federal government’s special representative for the Prairies, told the Canadian Crops (Virtual) Convention March 2.

However, he didn’t provide any details.

“There is promising news on this front,” Carr told the meeting hosted by the Canola Council of Canada and Canada Grains Council. “We know it has been an irritant. I understand why. I just want you to take some reassurance on what (Agriculture) Minister (Marie-Claude) Bibeau said last week and what will be discussed internally and then made public before too long about details on how we are going to address this issue.”

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A statement from Bibeau released that week said in part: “We are committed to new rebates for on-farm fuel use such as grain drying, in order to both support our food producers and also encourage new investments in sustainable technologies that go beyond existing exemptions for farm fuels and rebates for greenhouses.”

The statement was in reaction to Bill C-206, a private member’s bill to exempt certain farm fuels from the carbon tax, which the governing Liberals voted against.

“In addition, our government will make grain drying and barn heating a priority focus under the new $165-million agriculture clean technology fund,” Bibeau’s statement says. “The program will invest in energy efficiency, fuel switching, and other new technologies on farms. This program will be announced in the coming months. These commitments build on our government’s impending launch of a $185-million Natural Climate Solutions for Agriculture Fund, which will also be announced in the months to come.”

Farmers are already fighting climate change and the federal government intends to help them achieve more, Carr said.

“The issue has gathered a lot of heat across the Prairie,” he added. “I don’t like some of that heat and I think we have to do something about it. What Minister Bibeau announced last week, and as that policy rolls out over the coming weeks, I think that some of that heat will come out of the discussion. And I also believe that it’s important that the Government of Canada has a better insight into why there’s so much heat and why farmers have taken the position they have on a price on pollution and why they believe that there ought to be rebates and exemptions and that’s what we are determined to do.”

Instead of carbon tax, the federal government prefers to call it a ‘price on pollution,’ Carr said.

“It’s a price mechanism that even conservative economists around the world think is the right way to go,” he said.

Carr declined to say if the carbon tax set to hit $170 a tonne by 2030 would result in lower emissions, or if it needs to be higher.

And while finding a consensus on cutting carbon emission to mitigate climate has been difficult, Carr said consensus is getting closer.

“If you look at how the tone and temperature has been reduced over the last number of months… ” he said.

“While consensus might be illusive it is worth chasing. And I see all kinds of alignment between the Government of Canada and the governments of Alberta, Saskatchewan and Manitoba.

“I am always looking for common ground and I am encouraged to see how much we’re finding.”

Long road

No further details, or specific timelines, were offered by either Carr or in Bibeau’s statement, made jointly with Minister of Environment and Climate Change Jonathan Wilkinson.

Facing scrutiny for the high cost experienced during a particularly wet harvest last year, Bibeau avoided making any commitments. Instead she defaulted to a favoured position: requesting more information on the matter.

While the Liberals deliberate their own plan to relieve farmers of grain-drying costs, there will be continued industry support for Bill C-206, an act to amend the Greenhouse Gas Pollution Pricing Act (qualifying farming fuel), a private member’s bill introduced by Conservative MP Philip Lawrence that’s drawn support from all opposition parties, and one lone Liberal MP.

The momentum of Lawrence’s bill coupled with the Liberals’ new, albeit vague, commitment should ensure farmers will be getting some form of relief from grain drying – but when is still unclear.

Bill C-206 getting to committee marks the halfway point in a six-stage process of a bill becoming law; but there is a long road ahead to it coming into force.

If parliament doesn’t prorogue first, the Standing Committee on Agriculture and Agri-Food will hear testimony from stakeholders in and outside of government before reporting back findings and possible amendments to the House of Commons.

The bill would die on the floor, and have to be reintroduced a third time if government rises and the current parliamentary session ends before its passage – a looming threat in any minority government situation. This scenario would essentially mean the bill goes back to its infancy, and the process of its passage would begin again.

Last year, federal officials told a committee of MPs that an AAFC internal analysis suggests costs of grain drying are “a fairly small share of overall costs.”

While the analysis has not been made available to the public, officials say grain-drying costs typically represent only one to two per cent of total costs for producers.

Provinces and provincial producer groups have put forward numbers suggesting carbon taxes – including when added to grain drying – account for a significantly higher amount of overall costs, but AAFC officials suggest those figures factored in indirect costs, resulting in a higher estimate.

An evaluation of grain-drying costs provided by some provincial governments or producer groups was done in 2019 by AAFC. The results don’t represent AAFC’s estimates, and instead represent a standard set of results from different groups to offer comparable results.

That report found, “Based on the information received, the average per-farm cost of pollution pricing associated with grain drying by province ranges from 0.05 per cent to 0.38 per cent of net operating costs for an average farm, equivalent to $210 to $774, depending on the province in question.”

Other issues

Carr also said the Port of Vancouver authority should have more Prairie directors on its board — something the Western Grain Elevator Association is advocating.

Canola Council of Canada president Jim Emerson told Carr goods shipped from the Prairie provinces accounts for 85 per cent of the value of cargo shipped through Vancouver, but Prairie representatives make up just nine per cent of the port authority’s directors.

The Canadian government, including the public service and boards and commissions, needs more Prairie representation, Carr added.

— With files from D.C. Fraser

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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