Saskatchewan's Deputy Agriculture Minister Rick Burton says the carbon tax is a significant hit for Saskatchewan producers.
"The carbon tax was at $65 per tonne and as of April 1st it'll be moving to $80 a tonne, at that rate its estimated cost to Saskatchewan producers will be around $137 million a year."
He says it adds costs to the inputs they are using and just about everything that's coming in or off their farm is impacted by the carbon price.
The Federal Liberal Carbox Tax Pricing plan would see the pricing increase to $170.00 per tonne by 2030.
Burton says its a concern for producers, who could see an impact at the farm gate of about $290 million a year.
The Agricultural Producers Association of Saskatchewan says they've tracked the cost implications on various production and marketing activities including heating fuel, grain drying and transportation from farm to elevator and port.
According to the latest figures from APAS a farm producing a 62-bushel-per-acre crop in the black soil zone could expect to incur an additional $7.24 per acre in costs due to the federal carbon price in 2024. Extrapolating this trend over time, these costs are projected to rise to $17.31 per acre by 2030, assuming the higher costs on inputs and services continue to increase with the $15 per tonne a year schedule set out in federal regulations.
APAS President Ian Boxall says farmers always seem to pay, so we are very sensitive to the implications of the increase.
"Take, for instance, the estimated staggering 50 per cent increase allocated to rail transportation costs, a massive $57 million that Saskatchewan grain producers are expected to shoulder. This amounts to an overwhelming $21 million more than last year alone! Why should farmers pay the railway’s carbon tax?"
To illustrate the aggregate cost impact on farming operations, APAS applied these calculations to a hypothetical 5000-acre farm producing wheat, canola, barley, peas, and oats in the black soil zone.
The results revealed a total carbon tax cost ranging between $22,678 and $30,033 under various production scenarios and specific grain drying requirements.
Boxall says these examples demonstrate how the increase in the carbon tax poses a significant impact to the financial viability of farming operations, particularly when our margins are tight or when there is a need for grain drying.
He points out the implications extend beyond direct production and transportation costs that can be tracked with public data. APAS highlights the additional indirect costs faced by producers, including increased input costs for fertilizer, chemical and machinery as well as the likelihood of processors and grain handlers passing down increased fuel, electricity, and emissions costs to producers.
APAS has passed resolutions urging federal intervention to prevent railways from transferring the carbon tax burden onto producers through freight rate surcharges or allowable increases to the Maximum Revenue Entitlement (MRE) index.
Boxall says Saskatchewan farmers are disproportionately affected by these carbon tax increases due to our reliance on export markets, harsh weather conditions, and the extensive distances involved in reaching those markets.
"It's imperative that policymakers consider the unique challenges faced by our agricultural sector and take proactive steps to safeguard its sustainability."