Carbon tax is a sin tax not nearly high enough to force change: Sask. farmer

"Forgive my confusion but if 90 per cent is returned where is the incentive to drive change?"
Farmers and other business owners are going to have to "eat the added costs associated with the federal carbon tax," Megz Reynolds says. (Bonnie Allen/CBC)

The federal government announced a plan earlier this week to impose a carbon tax on provinces, like Saskatchewan, that are not instituting some form of carbon pricing.

CBC Saskatchewan gathered opinions on opposite sides of the issue. Read another side here.

I am going to preface this article by saying that I am in no way a climate change denier. I believe that there are steps that we need to take as individuals, as nations and on a global scale. 

However, I do not believe that a tax on carbon — a sin tax that is not nearly high enough to force change — is the best way to move forward. 

I am a farmer. A grain producer to be exact. My business and my livelihood rely on my ability to be sustainable and environmental. 

My greatest asset is the soil I grow my crops in. I need to protect it and nurture it, not only so I can continue to grow crops but most importantly so I can pass the land on to my children in better condition than when I became the temporary steward of it. 

Crunching the numbers

Below is a description of what a forced carbon tax would mean to me and my farming operation. The information is based on this Parliamentary Budget Officers report. We do not have the exact numbers as industry is trying to figure them out at this time. 

The numbers in the report are based off a $25 per tonne tax. Prime Minister Justin Trudeau has said that a tax of $50 per tonne will eventually be forced upon Saskatchewan.

Based on $50 per tonne, the "average" crop farm, defined as 1,375 acres, would pay around $20,000 a year in carbon tax between croplands, energy and transportation. 

This year we seeded 2,100 acres at my farm and we are not a large operation by any means. If the estimates in the report are correct, then our 2,100-acre farm would pay more than $30,000 in carbon tax at $50 per tonne. $30,000! Let that amount sink in for a minute and now picture adding it to a farmer's already extensive list of expenses. 

For producers that means shrinking our already razor-thin profit margins.

We pay rent or mortgage on every single acre that we farm. We have insurance premiums and bills for fuel, chemical, seed and fertilizer. We have large equipment loans for equipment we use approximately six weeks a year. Of course we have the labour costs associated with running our operations. 

One of the largest challenges farmers face is that we have zero control or influence over the prices we get for our product. We cannot raise commodity prices to offset our growing expenses. 

Many farms are already struggling with rising costs of operation, low commodity prices and multiple bad years in a row. Add to all this an additional tax of $30,000 or more and we may see family farm operations — which make up 98 per cent of Canadian farms — going under. 

'It will still be the farmer footing the bill'

Canadian producers are working hard to diminish their carbon footprint without government intervention. Adapting no-till farming practices has resulted in a measured reduction of 1.5 million tonnes of carbon per year, just by decreasing the amount of nitrous oxide emissions from fertilizer application. In 2015 Canada's crop lands captured 14 million tonnes of carbon, largely from no-till farming practices.

We have heard the federal government saying 90 per cent of the revenue brought in will be returned to consumers through a rebate and that farm fuel will be exempt. Forgive my confusion but if 90 per cent is returned where is the incentive to drive change? 

Exempting farm fuel does not make a huge difference to me as a farmer because the reality is if there is still a carbon tax applied to other facets of agriculture, like fertilizer, transportation and equipment manufacturing, it will still be the farmer footing the bill. 

We also need to be aware that Canada relies on export and trade to drive our economy. I rely on the ability to market and sell my grain to a global market. 

In order to stay competitive in that market all Canadian businesses — not just farmers and ranchers — are going to need to eat the added costs associated with the federal carbon tax. 

For producers that means shrinking our already razor-thin profit margins.

This column is part of CBC's Opinion section. For more information about this section, please read this editor's blog and our FAQ

About the Author

Megz Reynolds is a Saskatchewan farmer of grains and pulses, a speaker, a wife and a mom to two beautiful girls. Together they are tackling life and farming while trying to make a difference.


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