(Twitter/@KowalchukFarms)

By Alice McFarlane

Federal Carbon Tax

New estimates show financial impact of the carbon tax on farmers

Jan 8, 2021 | 12:28 PM

MELFORT, Sask. – A Saskatchewan farm group has completed another round of calculations on the cost of the carbon tax on agriculture operations.

The Agricultural Producers Association of Saskatchewan (APAS) said if planned increases to the carbon tax proceed the cost of producing wheat could go up to over $12.50 an acre in 2030.

The estimates were calculated using key indirect costs currently not exempt from carbon taxation, such as rail and road transportation, electricity and grain drying.

APAS President Todd Lewis said the increase is carried entirely by farmers and cannot be passed along to customers.

“We’re looking at a reduction of net farm income by hundreds of millions of dollars in Saskatchewan alone, and the modest rebates provided by the federal government won’t make up for these losses,” Lewis said in a news release. “It’s unsustainable for our members.”

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While the carbon tax is designed to provide incentives to reduce energy consumption the cost increases hamper a farmers’ ability to adopt new technologies, according to Lewis.

“In some cases, producers will pay for efficiency gains like high-capacity grain hopper cars through their freight rates, and yet those cost savings will go to the railways,” Lewis said. “Agricultural producers have waited decades to see some recognition of our environmental stewardship, and we have seen a lot of lip service, but not much concrete action.”

Independent grains industry analyst and former Western Canadian Wheat Growers executive director Blair Rutter said the impact to a modest 5,000-acre farm is significant.

“It would be about a $12,000 hit to their bottom line based on current carbon tax rates,” Rutter said. “Using those numbers, by 2030, the hit would be about $50,000 for a 5,000-acre farm. That’s real coin.”

APAS will continue to develop cost estimates for other crop and livestock commodities in order to fight for further exemptions and other forms of financial relief.

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF