OTTAWA — As if a waterlogged crop, trade problems with China and a railway strike weren’t enough, Manitoba farmers are being forced to pay the carbon tax on some items under rules that they argue don’t make sense.
They are pleading with the federal government to fix an apparent oversight that has hit them in the pocketbook.
"We’re shooting ourselves in the foot," said Warren McCutcheon, who grows corn near Carman, 70 kilometres southwest of Winnipeg.
He’s among hundreds of family farmers who want the Trudeau government to eliminate the carbon tax on the practice of grain drying. It’s one of the few agricultural tasks that is subject to the federal levy. Fuel used for agriculture is exempt from the tax because there are few environmentally friendly alternatives to it. Officials decided it would be counterproductive to apply the tax in cases where customers would likely shift to cheaper foreign products, resulting in a minimal effect on carbon emissions.
The carbon tax isn’t charged on propane in some parts of farming, but it is charged on fuel used to dry grain.
When grain that has been harvested is too wet, it must be dried. It’s not possible to dry it using electricity. Technology to switch grain drying from fuel to hydroelectricity is likely years away.
McCutcheon said the three-cent levy on every litre of propane has cost his farm $1,800 to date.
In North Dakota, farmers are able to dry their crops without paying such a levy.
"It’s disappointing and frustrating that our government seems to want to make us a less competitive industry, one that benefits our country in so many ways," McCutcheon said.
Manitoba’s proposed carbon tax exempted grain drying. Premier Brian Pallister scrapped his proposed plan in October 2018, so the federal government imposed its own on Manitoba.
The issue has percolated for weeks, with premiers of the three Prairie provinces asking for the tax to be stripped from the cost of grain drying. Federal Agriculture Minister Marie-Claude Bibeau has asked the three Prairie provinces to tabulate the cost.
“It’s like a perfect storm aligning and hitting you all at one time. That’s what we’ve encountered in Manitoba this year. I consider that a huge issue, with regards to the federal government not understanding western Canadian agriculture." ‐ Keystone Agricultural Producers president Bill Campbell
"I asked them to provide data and help me gather more information on the situation, if I want to evaluate properly the impact on the sector," she told reporters last week.
Manitoba Agriculture Minister Blaine Pedersen said he was encouraged by the request.
"We’ll break it down to a cost per bushel to dry grain because this is what affects producers’ margins," Pedersen told the Free Press.
The province doesn’t have a ballpark figure of how much this is costing farmers.
Keystone Agricultural Producers, Manitoba’s largest farm lobby, has expressed concern about the Liberals’ handling of China’s canola blockade and a delayed reform of risk-management tools, but the tax on grain-drying seems to be the last straw.
"It’s frustrating to me that (Bibeau) waited until an agriculture ministers conference to request that type of information," said president Bill Campbell.
"It’s like a perfect storm aligning and hitting you all at one time. That’s what we’ve encountered in Manitoba this year."
Campbell noted the carbon tax doesn’t apply to greenhouse tasks and other industries that are largely based in Central Canada.
"I consider that a huge issue, with regards to the federal government not understanding western Canadian agriculture," he said.
Conservative MP Dan Mazier, Campbell’s predecessor at KAP who represents Dauphin, suspects this has cost Manitoba farmers millions. He said the damp weather has forced farmers to increase their use of propane this year.
"It’s only three cents a litre today, but with volumes that we haven’t seen in our propane bills, for many years," he said.
He was encouraged that Bibeau reached out to the provinces, but worries it’s too late for a rebate.
Campbell wrote to Trudeau on Nov. 5, inviting the prime minister to tour his farm and get a sense of the issues plaguing Prairie agriculture.
Trudeau did not respond. Six weeks later, his office said it plans to reply.
"We appreciate and share their belief that Canada is stronger when we work together in the best interests of Manitobans and all Canadians," spokeswoman Eleanore Catenaro wrote on Friday.
The federal Conservatives have called on Trudeau to immediately exempt farm fuel from the carbon tax. They argue the issue will only get worse when the propane charge doubles in 2021.
Jim Carr, Trudeau’s adviser on issues that affect the Prairies, insisted the top levels of government want to find a solution.
Campbell is discouraged that he only heard back from Trudeau’s office because the Free Press raised the issue.
"It’s not neighbourly, and to me I find it somewhat insulting as a Canadian citizen that those types of issues are not responded to."