Federal carbon tax costs farmers almost $14,000 in 1st year; 82% negatively impacted

CFIB urges federal government to exempt natural gas, propane and aviation fuel used for farming

Regina, February 21, 2020 – Eighty-two per cent of farmers say the federal carbon tax is negatively impacting their business (94% of farmers in the field crop sector, 93% in the livestock sector), reveals new survey data from the Canadian Federation of Independent Business (CFIB). On average, farmers estimate they will pay almost $14,000 in federal carbon taxes in the first year it applies to them (April 1st, 2019 to March 31st, 2020).

In response to a request for data on how the federal carbon tax is impacting the farming community, CFIB sent a letter to the Hon. Marie-Claude Bibeau, Minister of Agriculture and Agri-Food outlining farmers’ views on the federal carbon tax and the significant negative impact it is having on farm businesses.

“CFIB has been hearing from farmers about how the mounting costs of the federal carbon tax are taking a real bite out of their bottom line,” said Marilyn Braun-Pollon, CFIB vice-president, Western Canada and Agri-business. “Given the challenging harvest last year, ongoing trade disputes, and the threat of a prolonged rail disruption, we urge the Minister to address farmers’ serious concerns about the carbon tax which is hurting the overall competitiveness of the agriculture sector.”

Other key findings from a February 2020 survey of farmers reveal the following:

• Farmers care about the environment: When asked what motivates their business to implement measures to improve environmental quality, 87% of Canadian farmers said they were motivated by their own personal views;
• Almost 4-in-5 (78%) Canadian farmers have taken action in the last several years to lessen their environmental impact;
• 93% of farmers in Saskatchewan, Manitoba and Ontario agree the federal government should not charge GST (5% sales tax) on the federal carbon tax as it currently does;
• Farmers cannot pass the federal carbon tax costs on to their customers despite the government’s assurances: 83% of farmers in the field crop sector said they would be able to pass on less than 10 per cent of the federal carbon tax costs to customers between April 1st, 2019 and March 31st, 2020. Over 78% of these farmers will have to eat the entire cost.

“Given most farmers are price takers, these costly carbon taxes actually hamstring farmers’ ability to compete and invest in new technology to be even more efficient,” added Braun-Pollon. “That’s why we are recommending exemptions from the federal carbon tax for propane, natural gas and aviation fuel used for farming activities in CFIB’s recent pre-budget submission for the upcoming federal budget.”

CFIB recommendations outlined in the letter to Minister Bibeau include:

• Exempt natural gas, propane, and aviation fuel used by farmers for farming activities such as drying grain, heating livestock facilities, or spraying crops from the federal carbon tax, including those farm expenses from 2019.
• End the practice of charging GST on the federal carbon tax.
• Stop further increases in the overall tax burden (e.g. CPP and carbon tax) on farmers.
• Work to improve Canada’s overall tax and regulatory competitiveness in the agriculture sector.

“The federal carbon tax is ineffective and punishes farmers with significant costs making them less profitable and competitive on the world stage,” concluded Braun-Pollon. “We urge the federal government to use this new data and act on the recommendations to expand these much needed exemptions for the agriculture sector.”

To arrange an interview with Marilyn Braun-Pollon, CFIB’s Vice-President, Western Canada & Agri-business, please call (306) 757-0000 or email mssask@cfib.ca. You may follow CFIB Saskatchewan on Twitter @cfibsk.

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members (including 7,200 agri-businesses). CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.