Fortunately, I have a solution to how Albertan and other western Canadian farmers can handle the recently imposed federal government carbon tax — just pass this increasing operating cost onto consumers. It is that simple. Oh, wait, come to think of it that doesn’t work — farmers are the consumers, or at least have no mechanism to pass along increased operating costs.
I guess farmers will just have to learn to be more efficient. That’s generally the recommended solution with any hike in input costs — just be more efficient and/or increase production. No one will ever hit the ceiling on that plan — just like jello, there is always room for more efficiencies.
As wonderful as governments are, they always seem to be a bit two-faced when it comes to supporting agriculture. “Your industry is vitally important to provincial and Canadian economies, we couldn’t live without you, but right after lunch we’re going to cut you off at the knees.”
As of January 1st, Alberta joined Saskatchewan and Manitoba in paying a federal carbon tax. It amounts to about five cents per litre on fuel.
The Alberta Wheat and Barley Commissions report the full impact of the federal fuel tax on diesel as of January 1, 2020, is $0.0537/litre. Based on filling a 15,000-litre tank fuel storage tank, the carbon tax for diesel would cost a farmer more than $800 on a single filling. So it is worth your while to apply for and submit the fuel exemption application with your fuel service provider before fuel is delivered.
While the exemption covers purple gas and diesel, so far it doesn’t cover other fuel costs such as propane and natural gas. Certainly in the fall and winter of 2019-20 they were big ticket items for those drying grain. For many producers last fall, as they played dodgeball with harvest weather, if they had a hope at all of getting crop safely stored in the bin it had to be dried.
I saw some estimates that pegged the cost of drying at 40 cents per acre, Alberta Agriculture estimates average drying costs at between $45 and $75 per hour, or $10 to $12 per tonne, or 15 to 24 cents per bushel. Other reports estimated depending on the size of farm, drying costs could easily be $2,000 to $4,000. Who knows for sure, but it is fair to say, the total bill for western Canadian farmers will no doubt run into the millions. Commodity commissions have asked the federal government for carbon tax exemption on these fuels, but so far that idea has been rejected.
I guess the four million acres of crop still sitting out across the prairies to be harvested in the spring, somehow, will just have to dry itself.
Alberta Agriculture cuts
And the great United Conservative Party of Alberta really isn’t that much better when it comes to dealing with agriculture. With their first budget last fall they announced a serious funding cut to Alberta Agriculture — “a vitally important industry” — over the next four years. As writer Jennifer Blair reports, “Within the department, the primary agriculture division — which manages research and production — will be among the hardest hit, with cuts of $7 million in 2019-20, which is the current fiscal year. It calls for a total spending reduction of $26 million by 2022-23, bringing the division’s budget down from $77 million last year to $51 million by the end of 2023.”
For a department that was already a shadow of its former self due to previous government cuts and efficiencies, these cuts almost immediately resulted in 50 jobs being lost, and offices being closed. Farmers are concerned what the cuts will mean in terms of ongoing crop and livestock research and development.
The way governments treat agriculture reminds me of an old joke involving an amazing pig.
A TV reporter became lost on the back roads and stopped at a farm to get directions. As he was talking to the farmer he noticed a pig with a wooden leg. “This could be a great story for the Six O’Clock News. How did that pig lose his leg?” he asked the farmer.
“Well”, said the farmer, “that’s a very special pig. One night not too long ago we had a fire start in the barn, and that pig squealed so loud and long that he woke everyone, and by the time we got there he had herded all the other animals out of the barn. Saved them all.”
“And that was when he hurt his leg?” asked the journalist anxious for a story.
“Nope, he pulled through that just fine.” said the farmer. “Though a while later, I was back in the woods when a bear attacked me. Well, sir that pig was nearby and he came running and rammed that bear from behind and then chased him off. He saved me for sure.”
“Wow! So the bear injured his leg then?” questioned the reporter.
“No. He came away without a scratch. Though a few days later, my tractor turned over in a ditch and I was knocked unconscious. Well, that pig dove into the ditch and pulled me out before I got cut up in the machinery.”
“Ahh! So his leg got caught under the tractor?” asked the journalist.
“Noooo. We both walked away from that one.” says the farmer.
“So how did he get the wooden leg?” asked the journalist.
“Well”, the farmer replied, “A pig that special shouldn’t be eaten all at once”!
I’m afraid if politicians continue to appreciate the value and vital role of agriculture with the same passion, the industry could be bankrupt in just a couple more years.