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Federal carbon tax announcement increases tension among grain growers


January 4, 2021
By Top Crop Manager

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The federal government’s new plan to aggressively address climate change has many farmers up in arms.

Entitled “A Healthy environment and a healthy economy,” the plan includes 64 new measures and $15 billion in investments, in addition to the $6 billion for clean infrastructure Canada Infrastructure Bank announced this fall as part of its growth plan.

Of the many measures discussed, the carbon tax increases are the flashpoint for many in agriculture. The charge on fuels will rise $15 per tonne per year, starting in 2023. The carbon tax is currently at $30/tonne and will rise to $50/tonne in 2023. With the recently announced increases, it will reach $170/tonne in 2030.

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This will be particularly damaging to grain growers, who often use natural gas to dry grain for storage, which is not exempt from the tax.

The plan states the intention to offer targeted relief to industries, like agriculture, with limited alternative options. One relief measure involves the government “[investing] $165.7 million over seven years to support the agriculture sector in developing transformative clean technologies and help farmers adopt commercially available clean technology.”

Grower groups, including the Grain Farmers of Ontario (GFO), Grain Growers of Canada (GGC), Canadian Federation of Agriculture (CFA) and Western Canadian Wheat Growers (WCWG), have all firmly opposed the tax hikes. According to these groups, the current carbon tax represents a significant added cost, further reducing farm profit and viability.

“The federal government has put a carbon tax on everything that is shipped to our farms, but those costs cannot be passed on to the end consumer,” said Gunter Jochum, WCWG president, in a press release. “We sell our grain at world commodity prices, regardless of our input costs.”