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Farmers prefer provincial carbon tax to Ottawa’s

The provincial government rejects the federal government’s offer to reconsider its plan

Many Manitoba farm groups prefer Manitoba’s scrapped carbon tax to Ottawa’s.

Manitoba’s plan, which Premier Brian Pallister withdrew Oct. 4, would have exempted not only fuels burned in farm equipment, but in grain dryers and livestock barns.

The federal plan for Manitoba announced Oct. 23 only exempts farm equipment fuel and 80 per cent of the fuel used to heat greenhouses.

But Manitoba farm leaders also say Ottawa’s tax is inferior because it won’t help farmers sequester more carbon dioxide, a major greenhouse gas fuelling climate change, than they currently do, or assist farmers to cut carbon emissions.

“We’re disappointed and we will have to do more lobbying (to push for those additional exemptions),” Keystone Agricultural Producers president Bill Campbell said in an interview Oct. 28 just before flying to Ottawa for a Canadian Federation of Agriculture meeting and lobbying of parliamentarians.

“Agriculture wants to be part of the solution,” he said. “I believe we are one of the only industries that have the ability to take carbon dioxide (out of the air) with plants and turn it into oxygen and store carbon. We can help change things but we need to be sustainable and competitive to be able to do that. Where are the projects that can show us leadership in these fields?”

Manitoba’s carbon tax would’ve started at $25 a tonne and stayed there, while Ottawa’s, which starts at $20 in 2019, rises $10 a tonne until reaching $50 in 2022.

Manitoba’s carbon tax was shelved because the federal government intended to introduce its own.

Intergovernmental Affairs Minister Dominic Le Blanc offered Manitoba an olive branch Oct. 25, saying in a statement Ottawa is open to working with Pallister to fight climate change.

Dominic Le Blanc (l) speaks during question period in the House of Commons on Parliament Hill in a file photo from 2015. He’s offering Manitoba Premier Brian Pallister an opportunity to restore the province’s carbon tax proposal that he scrapped earlier this month.
photo: Reuters/Chris Wattie/File

“If the premier would like to reconsider rescinding Manitoba’s proposal, we would give that due consideration, and take another serious look at what Manitoba has proposed,” Le Blanc said in an email.

Premier Pallister’s office rejected the offer.

“We’ve tried for over a year to negotiate with Ottawa in good faith, but they never accepted Manitoba’s proposal to implement a flat carbon pricing approach that would have reduced more emissions and saved Manitobans $520 million over five years,” Pallister’s office said in an email Oct. 26. “They refused to work with us co-operatively and maintained their threat to impose a double tax on Manitobans, while failing to acknowledge the significant investments we are making in green energy.

“It’s evident the Liberals care more about imposing a rising tax on Manitobans than working together to address the larger issue of fighting climate change. That’s why we’re saying yes to a Made-in-Manitoba Climate and Green Plan and no to a made-in-Ottawa carbon tax.”

Prolonged uncertainty, coupled with rising costs under the federal carbon tax plan, could lead to drastic consequences, Manitoba Agriculture Minister Ralph Eichler warned in an email Oct. 26.

“Our hope is that the federal government will recognize its plan is wrong for Manitoba producers,” he said.

Observers suspect more is going on than meets the eye. A Winnipeg Free Press editorial speculates Manitoba might have withdrawn its plan due to animosity between Pallister and Prime Minister Justin Trudeau, or because Ontario withdrew its plan, or to placate party members opposed to any carbon tax.

It’s also unclear whether Manitoba will qualify for $67 million in federal project funding to help cut carbon emissions.

“It’s disappointing that a policy we know is beneficial for Manitobans gets caught up in politics because good policy isn’t good politics,” Campbell said.

Several officials, including Manitoba Beef Producers general manager Brian Lemon, said the federal plan is ‘one size fits all.’

“We believe we should be able to participate in the provincial plan,” Lemon said in an interview Oct. 26.

Manitoba farmers, and especially cow-calf producers, can assist in sequestering carbon, he said.

“If you’re worried about putting carbon in the air you should be looking at ways and opportunities to take it out of the air,” Lemon said. “There’s an IISD (International Institute of Sustainable Development) study commissioned by community pastures and it found that an acre of grasslands will sequester eight tonnes of carbon a year. The government gave us a price of $25 (a tonne), times eight tonnes a year that’s $200 per acre per year of carbon pulled out of the air.”

Paying farmers for grasslands would encourage more and help Manitoba grow its cattle herd, Lemon said.

Campbell agreed farmers should be compensated for mitigating climate change and for their previous contributions through reduced tillage and improved fertilizer applications.

He’s also skeptical about Ottawa’s decision to return more money to citizens on average than is collected from the tax.

“I am concerned that agriculture will be one of the industries that will be taxed heavier than other sectors and we will be in trouble,” he said.

Manitoba hog farmers, who rely mainly on propane and natural gas to heat their barns, face higher costs under the federal carbon tax, Manitoba Pork Council general manager Andrew Dickson said in an interview Oct. 26.

“We’re kind of disappointed the province and the federal government weren’t able to work something out,” he said.

A carbon tax will make it harder to compete, Dickson said.

“People say it’s only a couple of cents a pig. Our problem is our margins are tight to start with. This is a narrow-margin business. It’s a volume business.

“If it’s 40 below outside you have to have heat for the animals.”

Manitoba hog processing and rendering plants face higher costs too, he said.

Ottawa’s carbon tax will cost the average Manitoba chicken farmer an extra $6,500 a year to heat their barns, Manitoba Chicken Producers chair Jake Wiebe said in an interview Oct. 26.

It amounts to an extra 1.3 cents a kilogram.

“Our animal care regulations are such that we have to make sure our barn conditions aren’t just barely OK, but that the birds are thriving and in a good environment,” Wiebe said. “So we’ve got to pour the heat on. There’s just no substitute for it.”

It’s unclear how much of that extra cost can be passed on to consumers through chicken farmers’ cost-of-production formula because it’s subject to negotiation with processors, Wiebe said.

The carbon tax will cost Manitoba milk producers too, Dairy Farmers of Manitoba chair David Wiens said in an interview Oct. 26.

“About 3.3 per cent of our total cost of production is for milk transportation,” he said. “A sizable component is the fuel used by the trucks.”

Eventually some of that cost will be covered through milk producers’ cost-of-production formula, Wiens said. But because 50 per cent of the formula is tied to the consumer price index, it could take awhile, he added.

Caged egg layer eggs barns don’t require much supplemental heat because the birds generate enough of their own, Cory Rybuck, general manager of Manitoba Egg Farmers said in an interview Oct. 26. He added extra costs would likely be covered through the industry’s cost-of-production formula.

About the author

Reporter

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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