Alberta's NDP government in local food fight over Bill 6, carbon tax and minimum wage
Calgary food grower says Alberta's NDP government is putting him out of business after 23 years
It's –7 C with a blanket of new snow covering the bald Alberta prairie. But in Paul Hotchkiss's greenhouses, a riot of pea shoots, wheat grass, green beans and the stripy heritage tomatoes — for which Hotchkiss is known — luxuriate under a plastic dome of sky.
In deep December, his operation is still feeding fruit and vegetables to local restaurants, shops and grocery chains — rubbing shoulders in the produce section with the competition from Mexico and California.
"I've been doing this 23 years," Hotchkiss said.
"We've come through labour shortages, when energy was booming, and all the growing pains of bringing guys up from Mexico. About nine years ago, tobacco mosaic virus nearly wiped us out. We came through, but we're not going to survive this government."
Hotchkiss closing down
On Monday, Hotchkiss notified his customers that 2016 will be his last year in business. Come October, he'll hang up his gloves, clean out his sheds and greenhouses, and hold an auction. He cites the provincial NDP government's contentious Bill 6 as the primary reason.
I've been doing this 23 years ... but we're not going to survive this government.- Paul Hotchkiss of Hotchkiss Herb and Produce
The farm and ranch workplace legislation has already provoked considerable opposition from the agricultural industry over the extension of Worker's Compensation Board and Occupational Health and Safety coverage.
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But the province's greenhouse operators have different concerns. In their labour intensive industry, employers fear that the bill will extend employment standards that will require them to pay staff overtime, vacation pay and statutory holiday pay — rules from which they are currently exempt.
Hotchkiss's labour bill amounted to $900,000 last year. Under the old regime, food growers like him — whose operations often see summer work days stretch to 12 and even 14 hours — were exempt from the requirement to pay overtime, levied at 1.5 times the hourly wage. He reckons paying overtime would have pushed that bill to $1.2-million, more than his gross annual revenue.
Other greenhouses worried as well
It's a worry that's shared by his peers.
"The main concern that we have with our business, and I guess you could probably say industry wide, within our greenhouse sector, is just the changes that may happen in regards to overtime and holiday pay," said Paul Doef, co-owner of Doef's Greenhouses in Lacombe, Alta.
The government has been playing its cards close to its chest. Although Bill 6 has received royal assent, regulations and the question of whether growers will be subject to broad employment standards, including overtime pay, have yet to be fleshed out.
Agriculture Minister Oneil Carlier promises to consult the industry over the next 12 to 18 months before making further changes. He also notes an exemption for food producers from some employment standards is still a possibility.
Higher minimum wage
What farmers and greenhouse growers definitely won't get, he says, is any relief on the rising minimum wage. The minimum wage hike to $11.20 an hour earlier in the year caused some ripples among employers in the province.
But it was the promise to push it to $15 by 2018 that really raised hackles. Particularly since produce from Alberta competes with imports from warmer climes with much lower labour costs like B.C., just across the border where the minimum wage is $10.45, and California, Florida and Mexico where labour costs are generally much lower still.
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Albert Cramer who runs two greenhouse operations in Medicine Hat points to the overall effect of the new government's changes.
"It's cumulative, right? All of these things are going to hurt our industry," he said.
He cites the hike to minimum wages, which would become especially damaging if magnified by an overtime provision that multiplies the base. He also voices another industry concern: the carbon tax.
'You know what kind of local produce we're going to be eating here in winter at this rate? Rocks and sticks.'- Paul Hotchkiss of Hotchkiss Herb and Produce
Natural gas is most commonly used to heat greenhouse operations, and the new carbon levy of $1.68 per gigajoule will add tens of thousands of dollars to fuel bills by 2018.
Eating rocks and sticks
Joel Beatson speaks for the Alberta Greenhouse Growers Association. He says many of his members will see their natural gas costs, which already account for roughly 20 per cent of expenses, "almost double by 2018."
Ultimately, he says "if oil stays at such a low level, it becomes cheaper to ship the product than to produce it locally."
Minister Carlier says it may be possible for growers to tap a fund the government promises to establish to help businesses adjust to the changes.
But Hotchkiss calls that cold comfort.
He says a tractor trailer travelling from the Mexican border to Calgary burns about as much energy as he uses in his greenhouses over just a couple of hours at this time of year, and it'll carry more produce than he grows in months.
"You know what kind of local produce we're going to be eating here in winter at this rate? Rocks and sticks."