Canadian farmers are understandably upset with the new carbon tax, which will primarily be tacked on to fossil fuels like gasoline and natural gas in a classic economic tactic to lower consumption and emissions.
The strongest pushback has been the scheduled carbon tax increases over the next few years which would be most expensive for grain drying. The intensity of the farmer reaction strikes me as disproportionate. First of all, this is not an enormous hit.
According to one University of Saskatchewan ag economist, even by 2030 when the carbon tax rises from the current $40/Ton to $170/T, it represents about 5% of wheat breakeven expenses. Second, like all Canadians, farmers get a rebate, about $1000 per household in Saskatchewan this year. Third, it would be shocking for any group not to object to any tax imposed on them. Fourth, western provinces, especially Alberta, have seen dreams of windfall profits from the oil sands shattered by fracking competition. A carbon tax is the last thing that industry needs.
Finally, this is a political as well as economic issue. The Conservative party, which includes many farmers, last week, under pressure from western provinces, voted down a resolution to merely recognize the reality of climate change. This is curious to me because while in the long run, nobody really benefits from global warming, Canadian agriculture comes pretty close. Notice what’s happened to the growing season length in the last 4 decades. This map has a lot of detail, but for now just notice how the brown area has expanded. As a result of warmer and wetter climate, Canada has become a serious competitor in crops they could not grow before. Here’s a chart of Manitoba soybean production, which was an oxymoron when I started farming. Heck, I remember people laughing when we added North Dakota to the Corn Growers Association.
Maybe Canadian farmers feel much downside to admitting climate change, so denial is appealing. Regardless, Canada is doing the heavy lifting for other nations to test what works and doesn’t to manage carbon emissions. For that, and being the best neighbor our country could have, we owe a debt of thanks.
