Keystone Agricultural Producers adds detail to its carbon tax policy

Some KAP delegates argued the farm group should oppose a carbon tax, 
but others said since a tax was inevitable KAP should help government 
create a tax that won’t make farmers uncompetitive

KAP’s advisory council further refined the general farm organization’s carbon tax policy at its April 20 meeting passing of a resolution to review all other options, including a GST-style approach so farmers could get carbon taxes in products they buy rebated. KAP’s standing policy to exempt agricultural production from the tax so farmers remain internationally competitive, credit farmers for their beneficial practices protecting the environment and for government to show where every carbon tax dollar is raised and spent, remains in place.

Keystone Agricultural Producers’ (KAP) carbon tax policy was further refined at its advisory council meeting here April 20.

But an almost hour-long debate on five carbon tax-related resolutions revealed some KAP members want KAP to oppose a carbon tax.

“We want to wait and get everybody (in competing agricultural countries) on board before we move in this direction,” Ridgeville farmer Les Felch said.

In the end those who see a carbon tax as inevitable, but who also want KAP to work with the Manitoba government to ensure the tax doesn’t make farmers uncompetitive, won the day.

Of the five carbon tax resolutions debated, three were passed and two defeated.

The defeated resolutions called on KAP to change its carbon tax policy until international competitors are also paying the tax, and to lobby the Manitoba government to honour its election promise and hold a referendum before introducing a carbon tax.

Under the Paris agreement to mitigate climate change, Canada agreed to cut its greenhouse gas emissions 30 per cent from 2005 levels by 2030. To that end Ottawa says every province must have a $10-a-tonne price on carbon dioxide starting in 2018, rising $10 a year to $50 by 2022. Revenues collected remain with the provinces.

Last week KAP delegates passed a resolution reaffirming the general farm organization’s current carbon tax policy. It calls for exempting agricultural production from the tax so farmers remain internationally competitive, crediting farmers for their beneficial practices protecting the environment and for government to show where every carbon tax dollar is raised and spent.

But delegates also passed a resolution calling on KAP to review all other options pertaining to a carbon tax, including “a GST-style approach which would recover the carbon tax on pass-through and downstream costs, including emissions related to growing crops or raising livestock and poultry, and be a line item on invoices for all agricultural products.”

Holland farmer Les Ferris, who moved the resolution, noted even if farmers are exempted from paying carbon tax on their emissions, they will still pay on farm-related products and services they buy, such as nitrogen fertilizer.

Les Ferris photo: Allan Dawson

“We are willing to pay (a carbon tax) as a consumer such as paying the tax for gas in our cars,” he said. “We aren’t trying to avoid that. But to stay competitive we have to have a bottom line that shows us how much carbon tax is being paid. We want it visible on the invoice and we want it refundable the same as the GST.”

Dauphin farmer Don Dewar suggested it would be complex to do on things such as transportation where the amount of tax paid varies with hauling distance.

Although not raised at the meeting, presumably market forces will affect how much carbon tax is passed on to farmers. Where competition is stiff, some suppliers might not be able to pass all of the tax on to farmers.

Foxwarren farmer George Graham said it could be difficult for farm bookkeepers too.

“I can see the government wanting documentation to prove you are paying that tax,” he said. “And that’s got audit written all over it.”

But Somerset farmer Gerry Demare said carbon tax information will be available because the government must track it to collect it.

“The real question is if you want to get it back or not,” he said.

Demare, who has also been promoting a GST-style carbon tax at meetings around the province, said the resolution was not submitted to KAP by him.

“I commend each and every one of you for having the discussion here today as it revolves around carbon tax because you are now becoming more informed,” Demare said. “Fantastic. That’s a great idea. It’s all about understanding the implications of what a carbon tax could mean to us in the future.”

Demare suggested farmers’ concerns are getting through to the Manitoba government.

“We create huge amounts of political risk,” he said. “We say out loud, ‘people, if our MLAs get it wrong we want to replace our MLA at the local level.’

“They’re running. We should’ve had a carbon tax April 11 at the budget. We don’t have one yet because of the efforts of people trying to understand carbon taxation and how negative it can impact us. So I don’t care about the resolution per se. I just want you to be informed.”

Late last year the Manitoba government said it would reveal its “made-in-Manitoba” carbon price early in 2017. But KAP president Dan Mazier said it might not come out until sometime next year.

“The problem we have today is we have no idea what the government is thinking,” Dewar said. “Officially it hasn’t told us a word.”

Mazier agrees.

“Our province is leaving us hanging here trying to come up with a solution for them,” he said. “I think we’re getting hung out to dry here as an industry.”

Meanwhile, there’s lots of speculation about how much a carbon tax will add to farm production costs.

Dugald farmer Edgar Scheurer said he’s heard rumours a $50-a-tonne carbon tax could cost farmers $30 an acre.

“That’s my profit on a good year,” he said on the meeting’s sidelines. “On a bad year I’m going to be in the negative.

“We don’t know the numbers for sure yet because they haven’t released them, but even $30 a tonne is way too much.”

Lacking data is all the more reason for KAP to work on trying to find the real numbers, said Holland farmer Reg Marginet.

When asked later in an interview if he thought the delay was a sign of second thoughts by the government, Mazier replied: “I don’t know that the government is doing it on purpose. I think they just want to get it right. They definitely are holding their cards close to their chests. But there has been really good engagement with some very high-level officials talking about carbon tax and agriculture.

“They are definitely considering what we are saying. But it is going to be up to them.”

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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