Agriculture needs exemption from carbon tax

AHEAD OF THE HEARD -- It's a well-worn catchphrase but the words "what were they thinking" comes to mind when contemplating the...

AHEAD OF THE HEARD — It’s a well-worn catchphrase but the words “what were they thinking” comes to mind when contemplating the fascination of progressive governments with the politically-correct carbon tax. Perhaps it should be rephrased what were they “not thinking” particularly when it comes to the impact of the carbon tax on the agriculture industry and its fuel intensive supply and marketing chain. Considering the invisibility of agriculture in the eyes of urban-centric governments such ignorance of the impact comes as no surprise. To be fair this issue is more of a provincial matter than federal, being the Trudeau government has promised to give any revenue from their carbon tax back to the provinces. The Alberta NDP government in its eagerness to show its environmental zeal announced a carbon tax months ago before the feds.

The Alberta government has exempted marked (purple) gas and diesel from the carbon tax. As admirable as that move was it ignores the reality of the extensive use of natural gas and electricity (which are not exempted) in agricultural production. That’s going to come to particular light this year as vast extra quantities of both energy sources are going to be needed to dry grains and oilseeds from the wet delayed harvest in Alberta. The tax impact is even greater on the greenhouse industry who are huge consumers of natural gas.

But it’s in the off-farm processing and transportation chain that the carbon tax will have the most effect and that extra cost will surely be downloaded on the farm and ranch sector. For instance, field crops, grains and oilseeds are all gathered, processed and shipped to export markets requiring considerable handling and transportation. Cattle in particular are moved long distances a number of times in their lifetime, and then meat and by products have to be transported. One can imagine the extra fuel bill the big packing plants will face. One way or another all those carbon tax costs will be paid for my primary ag producers. I expect the Alberta government never thought out the bigger cost picture on the overall industry.

In the absence of such impact understanding by government, a number of producer organizations have initiated carbon tax studies on their industries. I expect such studies will give a true picture of the carbon tax cost on the complete chain from production to final marketing. The question is will the Alberta government take notice of such impact information and expand the agricultural carbon tax exemption to all energy sources and the entire chain. The odds would seem against such enlightenment by this government. Politics would govern any such reconsideration, clearly as a voting block, the ag sector and producer organizations are not seen with much affection by the NDP strategists in the Premier’s office.

What would be of value to the carbon issue is a thorough examination and review of how it relates to the agricultural sector. Reports and studies have already shown that the ag production sector has made significant reductions in reducing carbon over the past 10 years. Those involved and making use of those reduction practices should be rewarded and encouraged, not punished with more taxes and regulations. The government instead should be providing financial incentives to the production sector to reduce their carbon footprint. The government has taken a small step in that direction with their support for on-farm windmill and solar energy production. But alas, the ongoing problem is that ag research whether for production or carbon reduction is not that sexy in the eyes of urban-based governments. They have also shown a predilection for wanting complete control over the direction of ag research – one notes its recent termination of the Alberta Livestock and Meat Agency – a highly successful research and development agency. That agency’s funding and programs were put back in the control of ag department bureaucrats.

What would greatly aid the government’s credibility with the carbon issue and the agricultural sector would be for it to provide financial support to producer and industry groups to identify ways and means to reduce carbon footprints in primary agriculture. The industry at every level has tremendous expertise, understanding and foresight to create programs and incentives to achieve the government’s goals in reducing carbon. What about a grand coalition that would include producer organizations, the ag research sector and the University of Alberta with a mandate to create a carbon policy for agriculture in Alberta. What is needed is a positive progressive approach based on technology and incentives – not more punitive carbon taxes.