TRAINS KEEP A-ROLLING CN & CPKC reveal their winter plans for ag HITTING THE BRICKS Going off the deep end into Canada’s labour pool and the need to strike Page 5 Page 19 DECEMBER 2023 | V.44 | N.05 | $4.50+GST
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DECEMBER 2023 3 CONTENTS DEPARTMENTS DECEMBER 2023 | V.44 | N.05 4 Executive Director’s Message 5 Strikes—the cost of doing business 10 Keepin’ it real 12 Clearing the air on carbon tax 19 The winter 2023-2024 plans for CN and CPKC 25 What’s new in the Canadian ag labour market? 30 By the numbers INDEX OF ADVERTISERS Ag Growth International | www.aggrowth.com . . . . . . . . .31 Agvise Laboratories | www.agvise.com. . . . . . . . . . . . 23 Bayer Crop Science Canada | www.cropscience.bayer.ca. . . . . .21 CAAR | www.caar.org/training. . . . . . . . . . . . . . . 16 Hi Tech Installations Ltd. | www.hitechinstallations.info. . . . . .11 Marcus Construction | www.marcusconstruction.com. . . . . . 29 Meridian Manufacturing Inc. | meridianmfg.com. . . . . . . .2, 32 5-9 The right to strike Regardless of the industry, Canadian labourers are hitting the pavement on strike more often now than in pre-COVID times, and much of it is affecting the ag industry. Learn what is driving the phenomenon. 19-24 It’s the wintertime plan It’s that time of the year when CN and the CPKC are transporting grain across Canada. But what issues are causing concern for the railroads that could prevent on-time delivery? pepifoto/iStock/Getty Images Plus photo imamember/iStock/Getty Images Plus photo Khaosai Wongnatthakan/iStock/Getty Images Plus photo 12-18 Carbon tax and what it actually means It’s another tax to be concerned about; but just what do we know about it? Read our primer and learn all the things you were afraid to ask about carbon tax.
4 THE CAAR COMMUNICATOR Valued ag associations Why do agricultural associations exist? The period of COVID lockdowns accompanied by economic disruptions forced many within the ag industry to re-evaluate their commitment to multiple associations supporting and representing components of this dynamic industry. The majority of ag associations took the time to pivot and adjust to the new environment. We experienced the value of digital technologies in maintaining and building real-time connections with stakeholders and members. Now that we have worked through the disruption of the past three years, it is once again time to re-enforce the value of ag associations and the benefits of membership. Associations bring together incredible people who become mentors and friends and help challenge the norm. They inspire investments in people that enable us to build better teams, adopt an open and growth mindset, and commit to being lifelong learners, all of which benefit members, associations, and the agriculture industry. Other important roles served by ag associations like CAAR are the support and showcasing of new tools, providing relevant information that supports the adoption of new technologies by farmers, and being supported by ag retailers and staff. The challenges and opportunities of ag associations continue as agriculture production continues to evolve. We continue to experience farm, retail, and manufacturing cost-driven consolidation, consumer-driven innovation, and expedited changes due to globalization and technology in every aspect of production and marketing. The past three years have demonstrated how critical it is to remain connected through participation in public and regulatory policy amendments. How consumers, ideology, and non-agriculture stakeholders are influencing policy today and tomorrow. The inclusion of major and minor stakeholder voices should be commended with a caveat. Are the recommendations based on sound science, economic benefit, trade expansion, or opinion? Associations play the role of the common-sense contributor on federal and provincial committees and roundtable discussions. Federal public policy has shifted leadership from health to the environment. This specifically impacts Canadian primary ag producers and the supporting industries. Environmental policy tends to be more emotional than practical and science-driven. Once again, the voice of reason that ag associations provide plays a critical role in demonstrating the big picture of agriculture throughout the value chain. Many voices are attempting to detract current farm practices to pigeonhole facts to modify or revamp public policy. They show little demonstration or consideration for the long-term impact on the industry. So why should you invest in associations, specifically CAAR? There are plenty of reasons! CAAR represents multiple components of the agriculture value change. For example, the majority of agronomists who support primary agriculture production are themselves employed by ag retailers. CAAR also discusses and represents best management practices (BMPs), the introduction and adoption of new technologies, environmental and nutrient stewardship compliance, and soil health and farm safety knowledge. Agricultutural retail locations are defined by a similar group of BMPs and more. Environmental stewardship and transportation of dangerous goods are critical to the location and the community that surrounds it. The critical components cannot be delivered or adhered to without the training and certification of CAAR and affiliated partners. As regulations are amended, CAAR has been afforded opportunities to provide input and comment, representing ag retailers, to limit overburdening. CAAR will continue to invest in training relating to health, safety, the environment, and compliance. Leadership and management development training programs have been identified as a need to address. Equally critical are future ag retail employee engagement and career opportunities. Succession activities are increasing as managers and owners retire. Ag retail provides many fulfilling opportunities, such as the ability to remain in the community with recognition as a leader while maintaining the viability of small- and medium-sized rural towns. The future of agriculture and supporting industries, along with agricultural associations, is bright if we all work together as a unified voice. CAAR requires the strong support of ag retailers, industry leaders, and consultants to continue delivering critical training, services, benefits, and advocacy today and tomorrow. Mitch Rezansoff Executive Director EXECUTIVE DIRECTOR’S MESSAGE Produce. Protect. Proud. PUBLISHER 205 - 1 Wesley Avenue Winnipeg, MB R3C 4C6 TF: 800-463-9323 | T: 204-989-9300 E: info@caar.org | W: caar.org Executive Director: Mitch Rezansoff Marketing, Communications & Event Manager: Nikeisha Paul-Hunninghan Distribution: Farms.com PUBLISHING PARTNER 90 Woodlawn Road W Guelph, ON N1H 1B2 Tel: 888-248-4893 Email: CAAR@Farms.com Website: www.Farms.com CONTRIBUTORS: Ainsley Andres, Writer Denise Faguy, Associate Editor Andrew Joseph, Editor COVER nullplus/iStock/Getty Images Plus; toto8888/iStock/Getty Images Plus DESIGN & LAYOUT Tanya Myers ADVERTISING SALES Andrew Bawden Director of Business Development and Digital Media 877-438-5729 X 5030 Email: Andrew.Bawden@Farms.com Website: www.Farms.com NEXT AD BOOKING DEADLINE January 8, 2024 ANNUAL PUBLICATION SCHEDULE February, April, August, October, December © 2024 The Canadian Association of Agri-Retailers. CAAR makes no expressed or implied warranties of merchantability or fitness for a particular purpose or otherwise, concerning the use of any product or fertilizer and assumes no liability for any injury or damage, direct or consequential, which may be incurred from the use of such products or services therein. Federal, provincial and municipal laws and regulations supersede the information contained herein. Canadian Mail Publications Sales Agreement #42518524 Return undeliverable Canadian addresses to 90 Woodlawn Rd W, Guelph, ON N1H 1B2 Printed in Canada. Please recycle where facilities exist. FOLLOW US ON
DECEMBER 2023 5 THE COST OF STRIKES Canada has seen its fair share of strikes lately—from auto workers, port workers, and federal workers related to passport renewals and immigration applications, to grocery store workers and liquor and lotteries in Manitoba. Ignoring any still ongoing strikes—some strikes lasted months, while others went on for weeks, some for days—each impacted more than just the two sides arguing over an issue. We’re not here to argue who’s right and who’s wrong. We can, however, examine how a strike can negatively affect Canada. The first thing we might ask, since we are an association of retailers, is just what is going on with all these strikes? It should be pretty obvious, but 99.9999 percent of the time it revolves around money, or rather, a perceived lack of it. Are people greedy? Yes, as a species, human beings can be greedy, with some of us always wanting to be more equal than others. Without going into specifics about how much money some striking entities earn at an hourly rate and are looking to make, let’s see why strikes are in vogue in the 2020s. More Money, Please While the word “please” may not enter into a Canadian strike discussion as often as it should, a glance at our Canadian economy shows that people don’t have enough money. 1. They don’t have enough money to keep up with the cost of living increases. 2. They don’t have enough money for affordable housing. 3. They don’t have enough money for food. All three of these points impact or have impacted the agricultural sector in Canada. Coincidentally, these issues have all arisen following the COVID-19 pandemic. Okay, maybe it’s not all that coincidental. Aside from applying better personal hygiene practices and learning not to mess with Mother Nature, what lessons can we take home from the pandemic? Plenty, as it turns out. Cost-of-living? Sure, there’s the increase for the price of fuel for your vehicles, heat for your homes, electricity during the summer AC months, and the price of food, seed, and fertilizer for your day job. Strikes—the cost of doing business Another strike means another disruption to the way Canada does business. A look at how legal strikes impact our country. By Andrew Joseph, Editor nobtis/iStock/Getty Images Plus photo In the post-COVID era, workers will go on strike or quit if they feel they are being taken advantage of.
6 THE CAAR COMMUNICATOR Affordable housing—yes, the bubble has burst from the insane housing price levels seen through the summer of 2022, but housing prices are still high, leaving many wondering how they will ever be able to afford a home or rent—especially for those living in a so-called big city. This writer’s parents bought a house on a large parcel of property in the suburbs of Toronto for $44,000 in 1973. Fifty years later, the going rate is about $1.6 million—which is down from the $2.2 million seen last summer for a neighbour’s “same” house and property. Have employee wages or salaries kept up since 1973 to make the 2023 housing values a viable purchase? No. And neither do they make sense for property taxes, where a neighbour with a newer, larger $3 million house on less land is paying less property tax than the writer’s unchanged 1945 construct. The city is pricing older, more long-term owners out of the housing market with property taxes. And what about food? An October 29, 2023, Canadian Press article headline screamed: “‘Haven’t eaten in days’: Canada’s food banks reporting massive spike in demand”. The article quotes Cynthia Boulter, the Chief Operating Officer of the Great Vancouver Food Banks: “We see parents who are skipping meals so that their children can eat. We see people who haven’t eaten in days. We see seniors who haven’t had produce in months.” In March 2023, food bank usage in Canada was 32 percent higher than it was in 2022 and 78 percent higher when compared with how things were preCovid in March 2019. You may recall that by March of 2020, with the pandemic in full swing, there was an economic shutdown that affected food security for everyone, but especially those who regularly relied on food banks. We may not have thought much about those people because, even as the pandemic made its presence more fully felt in March 2020, one in five Canadians worried about having enough food to meet their household needs. Whether you utilized a “personalized shopper”, a home delivery service, or donned a mask and gloves yourself, you may have been struck by the limited supply of foods and related sundry items. THE COST OF STRIKES When dock workers went on strike at the Port of Vancouver and the St. Lawrence Seaway they wanted a fair shake after helping keep Canada’s economy moving during COVID-19 troubles. Plus, they noted that the ports made lots of money. davit85/iStock/Getty Images Plus photo
DECEMBER 2023 7 Yes, there was a run on toilet paper. And hand soap and sanitizers. In fact, for these items, stores were either price gouging with through-the-roof markups or were doing their best to service all by limiting the number of items that could be purchased— usually worked around by having every family member out to make that maximum purchase. While some legitimately needed larger quantities— such as those with bigger families—many sought to profit by selling them via social media at hyper-inflated prices that would have made WWII black marketeers blush with embarrassment. Fortunately, manufacturers and retailers were quick to react, and it appears as though very few, if any, had to find toilet paper alternatives. At the grocery stores, you might not have been able to find chicken thighs one day or pork chops the next. Ground beef was never a gimme. Neither were bottles of soda always available—and usually not the one you wanted. People were buying more cans and frozen bags of vegetables and other foods—just in case. In the pantry, this writer still has a can of chicken—a whole chicken in a can. Two cans. Free Money With the economic shutdown that happened, many individuals were reluctantly wholly reliant on the federal CERB (Canada Emergency Response Benefits) program payments. These payments provided financial support to employed and self-employed Canadians who were directly affected by COVID-19. If you were eligible, you could have received $2,000 for four weeks (the same as $500 a week)—up to four such payments for a total of $8,000. At the time, the writer was self-employed and took the CERB payments, which, while helpful, were about half of what he was used to receiving when working a full-time job the year before COVID. Yes, he was legally qualified for CERB. Even with the CERB payments received, it made food, cost-of-living, and housing costs all quite challenging to manage as family talks regarding where the closest food bank might be was on the table rather than a hot meal. There was some concern from political pundits that CERB payments made some people reluctant to get back to work. Why buy the cow if you get the milk for free? However, quantifying CERB “laziness” is impossible, so we’ll leave it at that. Stuff happens. What are you going to do about it? Workers in Demand One of the more interesting things to arise from the pandemic was worker self-awareness. While many in the retail industry—no, not you— seemingly took the worker for just being a worker, the pandemic taught retailer workers they were a valuable commodity. From stocking the shelves to working the gas stations to working the drive-thru, and much more, these workers began to feel that they were putting their lives on the line and should earn a wage that better reflected their sacrifice for personal safety. There’s also medical staff, police and fire personnel, and those working at retirement homes and in funeral services—all essential. All performing their day-to-day in tough situations. With the pandemic on, however, not everyone was keen to continue to go to work. Not only did those who were near retirement age decide to retire, but the time off allowed many others to determine that their current job wasn’t really what they wanted. Also, when the fears of COVID-19 lessened to allow for a loosening of public restrictions, not everyone believed it and refused to go in to work. Right there, we have a worker shortage. However, fewer workers were required to be physically back at work because of distancing restrictions in place. There was the same available manufacturing space in a factory, but restrictions meant fewer workers could work in any given area. But even with fewer workers being needed, those who were working were working harder, trying to catch up to the needy consumer (again, regardless of the industry). For those workers who did want to work, they were now very much in demand, as retailers faced a thinner workforce even as the consumer desired to visit retailers again—though we should point out that not everyone decided to physically go back and do retail shopping. Order pickers became much in demand as consumers enjoyed—or perhaps took advantage—of the time-consuming physicality of retail shopping and preferred to now have their purchases picked and delivered to their homes. Still, for those in retail, the workers were overworked and overstressed. They are overworked because of the shortage of workers and overstressed because they are doing more work than they are
8 THE CAAR COMMUNICATOR used to and are still having to do the work under the shadow of COVID. My Supply Chain Broke For some retailers, an inability to receive a product from a manufacturer who could not build a product because of a parts or materials shortage was an everyday problem in March of 2020 that has only recently more or less resolved itself. This supply chain issue was a global one. An inability to mine or process ore to turn it into a needed part. For example, no one was mining the iron ore required to smelt it into a steel-belted tire. Tire shortages hit auto suppliers and manufacturers but really hurt the trucking industry, which, because of the size of tires required and the lower volume compared to automobiles, was not being manufactured as often when the parts were there. The parts were often not there because they were struck in transit—en route via a cargo ship that could not be loaded or off-loaded quickly because of COVID restrictions, and again because of reduced worker availability. For meat and poultry, there were still cows, pigs, and chickens, but farm operators faced issues in getting animal food, workers to care for the animals, truck availability to take the animals to an abattoir, workers to slaughter and butcher, packaging professionals to prep it for transport, limited truck availability—mostly because of a lack of drivers and technicians to maintain them—and then in some locations, workers at grocer stores to offload, store, and stock shelves as necessary. There wasn’t a meat shortage, just a shortage of people to get it from farm to fork. A Change in Behaviour Perhaps it was a long time coming. Perhaps it was the observance of our American cousins acting even more vexed than usual, but post-Covid Canadian attitudes have shifted. Generally speaking, since the reduction in pandemic safety protocols has allowed people to brave the outdoor environment once again without too much fear, people seem angrier. It’s not necessairily a theme of “hate thy neighbour”; it’s not even measurable. But there’s a darker, angrier side exhibited by people who are tired of being pushed around. Yes, worker shortages, inflation, and never-ending increases in the cost of living help define it. Even though it was the government that shut down a business’s ability to remain open during the pandemic, thereby affecting the income of workers, these workers have determined that since there was no loyalty shown to them, there need be no loyalty shown to the employer. They want respect, they want to be paid better, and they know there’s an employee shortage. There certainly are employee shortages in the skilled trades sector, regardless of the industry—and that’s across both the US and Canada. And it’s a collective feeling among the workers—a collective feeling that leads to collective action. During the pandemic, union workers and businesses often had collective bargaining agreements come due. But pandemic fears allowed them to quickly resolve the issue and keep everyone going. For the unions, because there was already a lot of unemployment due to the economic shutdown, workers were reluctant to bring up any workplace grievances and were just happy to keep on working. But post-pandemic, when those same agreements are due again, there’s a reluctance to maintain the status quo. With the inflation—we’re nowhere near the hyperinflation of post-WWI Germany, where it was cheaper to burn money than to use it to buy firewood—and the high cost of living, union workers are more willing to go on strike. They are more aware that their employers will be unable to replace them easily owing to a skilled worker shortage. They are also aware that some companies did rather well upon emerging from the pandemic, so why shouldn’t the workers be paid for that? At the Port of Vancouver and the St. Lawrence Seaway, workers are aware that shipping companies did quite alright in the time during the pandemic as the workers kept the ports open and running, ensuring we Canadians got our goods out and our goods in—even if things were a bit snarled with traffic. Did Canadians have to go without anything in particular during the pandemic? If we exclude outsidethe-home personal contact, then not really. As such, now that agreements between the port and the unionized workers have come due, workers know they have the port over a barrel, so to speak. A call to strike, and soon enough the workers got what they wanted. It’s why we have seen more than our fair share of strike actions in 2022 and 2023 in Canada. It’s also why there isn’t a tremendous roar about strikes from the general populace. Consumers see that there THE COST OF STRIKES
DECEMBER 2023 9 seems to be a greater divide between the haves and the have-nots. An Overview of Recent Strike Action Post-Covid, we had a lot of union contract agreements come due. We also saw an increase in worker resentment around a lack of respect, stressful working conditions, wages unable to keep pace with the cost-of-living increases, plain old inflation, and high housing prices. We’ve also seen that workers wanting more respect also seem to have noticed that they finally hold an advantage over their employees, as their skills are not easily replaced by anyone off the street. However, when workers go on strike, there are delivery delays and rising shipping costs. There is also the fact that the country’s reputation suffers on the global stage. If an agent is purchasing grain for a country and Canada is unable to supply it because a closed port does not allow it to be shipped and received on time, that agent will look elsewhere to get the time-sensitive cargo. Canadian farmers not only lose out on a sale, but the country also gains a reputation for not being a reliable trade partner. As well, there’s the financial loss of revenues and contract fines. Of course, it’s not just agricultural food that is affected by shipping delays. For tractor manufacturers who rely on steel, shipping delays mean the customer will also have to wait. A lack of materials could also mean that manufacturing slows or grinds to a halt. Not only does it affect the bottom line, but it also affects the worker. So in the case of port workers getting paid, manufacturing employees may have suffered due to layoffs or job cuts. Shipped fuel being prevented from reaching its destination because of a strike action also means that everyone who uses fuel will have to pay a higher price, which eats into one’s own profits. Lest we forget, increased prices for goods being transported will also increase inflation. While we cannot begrudge one party wanting to strike for whatever their reasons are, even if they are not immediately felt, a strike will play havoc with the Canadian economy on multiple levels, affecting Canadian businesses and Canadian consumers. It’s a vicious circle getting more vicious. Produce. Protect. Proud. Anhydrous Ammonia: Retailer Safe Handling & TDG Certification This course is designed to promote the safe transportation and handling of anhydrous ammonia at an agri-retail location or distribution centre. Successful trainees receive: a TDG (Transportation of Dangerous Goods) certificate valid for three (3) years from the date signed, confirming they are qualified to transport and handle anhydrous ammonia (Class 2.3 (8)). CAAR Member Price: $95 | Non-members: $150 Contact Maikka 204-989-9304 | maikka@caar.org Visit the website: https://caar.org/training
10 THE CAAR COMMUNICATOR According to new labour market data plumbed from the Canadian Agricultural Human Resource Council (CAHRC), the agricltural workforce in Canada consisted of 420,000 people in 2022— a number that includes all farm businesses, support services, and agricultural wholesalers. Of that number, 17 percent of the labour force consisted of foreign workers, including workers from the Temporary Foreign Worker Program and the Seasonal Agricultural Worker Program. According to the CAHRC report entitled “Sowing Seeds of Change,” that’s an increase of more than 30 percent since 2017. For a more detailed look at the report, see page 25. For CAAR members, the data means we have to learn to be more creative. Perhaps it is time to focus on those skilled team members who, for a variety of reasons, might have amicably left the workforce but are now looking to return with your company as an option. Many companies have employee return programs that are set in place to help skilled professionals re-enter the workforce after a career break. Most employees looking to relaunch their careers typically return to the same or similar role as the one they left, or they may have very strong transferable skills that could be applied to a new field. There are ways to attract and hire employees who haven’t worked in a few years but who are highly skilled and experienced. Here are four of them. 1. Offer a Flexible Workplace Who would ever believe that the pandemic did something good? The global COVID-19 spread resolved a problem that kept returning professionals out of the workforce. Many people couldn’t have a full-time job because they needed more flexibility. However, more people can nowadays realistically consider returning to work in a full-time capacity because companies are offering more flexible working arrangements—something unheard of in the preCOVID era. Perhaps taking its cue from kids who did their learning remotely, working virtually from home has been ideal for many returning candidates. The virtual return offered a more gentle transition back into the workforce for people, especially for those who have children or aging parents that they need to care for. By allowing candidates to work remotely (at least part of the time), it becomes a large selling point. HUMAN RESOURCES Keepin’ it real Some advice on how the ag community can maintain its workforce in good stead. By Ainsley Andres celiaosk/iStock/Getty Images Plus photo
DECEMBER 2023 11 2. Use a re-entry program Programs that help professionals re-enter the workforce can also be a win-win for both the employer and the returnee. Within this type of scenario, provides the employer with a chance to gauge whether the returner is still a good fit for the firm, and it helps returners gain the skills, confidence, and connections they require for success—and also if the firm has remained a good fit for them. A break in a professional’s career can provide an opportunity to reflect, find areas of focus, and return better equipped for the next phase of their professional journey with a new sense of purpose. 3. Offer part-time positions, even for all the company’s skilled positions It goes without saying that even 75 percent of a skilled person who is loyal to your company—25 percent of which would be up for a change—is better than having a vacant position. To avoid piling on tasks for a new position or employee, instead think about how some of the tasks for any position could be redistributed to other employees—perhaps creating a path for them to earn a promotion in the future. Take a long look at the role of the position—of every company position—and determine just what is an essential must-have versus a nice-to-have. By relieving the burden, you will make it much easier for employees to do their job without all the undue stress being present. 4. Offer a strong culture and opportunities Job candidates who are re-entering the workforce are considering much more than salary when they are applying for jobs. For them, factors such as benefits, location, perks, work-life balance, and career advancement opportunities are all things returning candidates consider when applying for jobs. It’s important to be competitive with what you offer to your employees because, like it or not, they have many options in today’s job market. Revaluate your company’s core values. Collaborate with leadership to set better examples for employees and craft a company culture that will attract and keep all types of employees.
12 THE CAAR COMMUNICATOR Sometimes, people and governments toss out new words or phrases and expect everyone to quietly follow along. Such is the case with carbon taxes. Most of us have a peripheral understanding of the concept. But, when we go looking for more, we are met with a wall of words written by academics—complex in verbiage, but not easily understood. So, let’s start at the beginning and decode some of the academic source material we see. What is a carbon tax? If a company produces a product and creates carbon emissions while doing so, that company is asked to pay a carbon tax. Carbon taxes are placed on carbon-based fuels and industries that produce carbon emissions. Why? Why do you have to pay a carbon tax? Because carbon emissions are considered bad for one’s health and the global environment, countries are being asked to reduce the amount of carbon emissions produced to lessen the danger to the world as a whole. The idea behind the tax is to penalize those who produce carbon emissions by making it more expensive for them to produce their products. At the same time, carbon taxes are subtly meant to encourage the use of products or methods that produce either fewer carbon emissions or zero emissions. It’s a methodology to save the producer money. The carbon tax is unlike other types of taxes. For example, a standard tax placed on a book purchased at a bookstore goes back to the government, where that tax money can be used as a payment for a government social program, government medical offerings, or to pay for the upkeep of roads, et al. Carbon tax revenues, however, are being used to combat carbon emissions. What happens to the money that is paid into the carbon tax? If we peruse the Internet, we get a lot of answers to a lot of questions, but presenting a cut-and-dry answer to this question takes some diving into things. No matter what province you are in, if you pay a carbon tax, that money is used only in the province from which it was obtained. For example, Alberta payers of the carbon tax can rest assured that their money will only be used in their province. This holds even though the carbon tax is a federal tax initiative. Clearing the air on carbon tax A guide to how the carbon tax system works in Canada. By Andrew Joseph, Editor CARBON TAX Measuring the cost of switching to a greener alternative, some sectors and companies can cheat the system by purchasing carbon credits from responsible producers. OleCNX - stock.adobe.com
DECEMBER 2023 13 The Government of Canada said that ”all the money from the federal price on pollution charged to fuel goes directly back to benefit Canadian families, businesses, farmers, and Indigenous groups—in the same province or territory where it was collected.” Who gets money from a carbon tax? Not everyone, that’s for sure. At the time of this writing—October 2023—the carbon tax money rebate can only be claimed by those provinces and territories that are subject to federal pollution pricing. The carbon tax rebate—aka the Climate Action Incentive Payment (CAIP)—was a tax credit that could be claimed on your tax return, but a few years ago it became a tax-free payment, paid quarterly, and enrollment is typically automatic. The writer of this article received a CAIP cheque in the mail for $213.50 in mid-October. Does every Canadian province have to pay a federal carbon tax? That’s sort of true. For those opting to not pay a federal carbon tax, depending on their locale, they have to pay a provincial carbon tax equivalent. The first four paying a federal carbon tax were Ontario, Saskatchewan, Manitoba, and Alberta. This past summer, starting July 1, 2023, residents of Nova Scotia, Prince Edward Island, and Newfoundland and Labrador received their first carbon tax benefit rebate because they were now being hit with a fuel pollution surcharge. British Columbia, New Brunswick, and Québec each have their own provincial carbon taxing system in place. As for our three territories, well… So, not everyone pays a federal carbon tax, and only those who use fuel to produce a product seem to get charged a carbon tax. Only those in seven provinces are currently being federally carbon taxed, and the money taxed stays in the province from which it was originally taken. We can assume that carbon taxes are charged in a manner whereby the more carbon emissions you produce, the more you get charged. So, does every person and province get the same amount of CAIP rebate? No. It gets a little bit complex regarding carbon rebates, but the chart above will allow you to calculate your quarterly CAIP rebate amount if you live in one of the seven provinces: Alberta, Manitoba, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan. Oh, and should you live in a designated rural area, you get an additional 10 percent more. Except if you live in Prince Edward Island because the Government of Canada has decided that the entire province is rural and has built that bonus into the dollars seen in the chart above. So why am I getting a carbon rebate? The Government of Canada cheque you may receive will have, under the Canadian flag, written: Climate action incentive payment (CAIP). While most people in Canada will not have had to contribute money via a carbon tax and didn’t know the cheque was coming, the government better not miss giving me a cheque! That’s the level of indifference most people have towards the CAIP payout, coupled with a lack of Individual/Base $193 $96.50 $96.50 $48.25 $132 $66 $66 $33 $164 $82 $82 $41 $124 $62 $62 $31 $122 $61 $61 $30.50 $120 $60 60 $30 $170 $85 $85 $42.50 Alberta Manitoba Newfoundland & Labrador Nova Scotia Ontario PEI Saskatchewan Spouse/ Common Law Partner First child in a single-parent family Each child under the age of 19
14 THE CAAR COMMUNICATOR knowledge as to why they are receiving it. We still haven’t examined just what exactly a carbon tax is, however. The cost of a carbon tax is a number our government (in this case) has derived from the social cost of carbon gas emission into the atmosphere. This social cost is the amount of money that was calculated as the externalities of carbon pollution. Externalities—what’s that? Using the example of air pollution caused by an ICE (internal combustion engine) farm vehicle, externalities are the cost of air pollution to society that is not paid by either the producer or user of the vehicle—a moral cost in GHG emissions that hits the rest of society. In this example, the fuel used by the ICE engine in a tractor causes GHG gases. The fuel on its own does not cause GHG emissions. The tractor on its own does not produce GHG emissions. But, when used to plant, grow, protect, and harvest food in a field, the tractor uses fuel that causes GHG emissions that contribute to the combined global issue of “bad air.” What bad air? Yes, aside from those unlucky enough to be close to the plethora of forest fires afflicting Canada or those brave enough to be fighting the fires, the air up here seems pretty good. Doesn’t it? Well, according to the Government of Canada, our total GHG emissions in 2020—the last year we have of calculated data—were 672 megatonnes of carbon dioxide equivalent (MtCO2e). Globally, Canada’s share of GHG emissions is less than 1.5 percent. 1.5 percent doesn’t seem so bad, right? True; however, Canada’s population is equivalent to 0.48 percent of the total world population. It means we are producing more than three times our share, per global capita, of GHG emissions. But how are GHG emissions calculated? I don’t know. Political pundits suggest that no one knows, but in truth, someone or some department had an inkling and provided a calculated “guess” of how much GHG emissions Canada produces. Unless every chimney or exhaust pipe has some sort of GHG emission calculator on it, there is no way to get an exact count of the emissions. As such, what we have from the Government of Canada is what one calls a “best guess.” However, the writer’s best guess is that it is based on specific calculations. In other words, the numbers weren’t simply made up, no matter how much you want to believe that because it’s the government. But you said you would teach us! Okay, per the Government of Canada, GHG emissions are reported in carbon dioxide equivalent (CO2 eq), which is determined by multiplying the amount of emissions of a particular gas by its global warming potential. The indicator uses the Intergovernmental Panel on Climate Change’s 1995 100-year global warming potentials. This writer stands corrected. Maybe he’s not smart enough. What are our GHG emissions? CARBON TAX The end result of the carbon tax in Canada and a host of other countries around the globe is to create a healthier planet with industries reducing their GHG emissions. witsarut sakorn/iStock/Getty Images Plus photo
DECEMBER 2023 15 The Government of Canada said that our total GHG emissions in 2021 were 670 megatonnes of carbon dioxide equivalent (Mt CO2 eq), which was a 1.8 percent increase from 659 Mt CO2 eq in 2020. But didn’t you say that it was 672 megatonnes of carbon dioxide equivalent in 2020—also data from the Government of Canada? Yes. That difference shows us that we went down by two megatonnes of carbon dioxide equivalent. So how does Canada stack up against the rest of the industrialized world? We’re third! But not in a good way! In a 2021 report, 1.5-Degree Lifestyles: Towards A Fair Consumption Space for All, produced by the Berlin, Germany-based Hot or Cool Institute, it showed that of the 10 chosen countries, Canada lagged far behind in cutting our carbon emissions. The 10 countries analyzed were chosen for varying degrees of income levels: Canada, Finland, the United Kingdom, Japan, China, Turkey, South Africa, Brazil, India, and Indonesia. And Canada was the worst. However, Australia (the worst carbon emitter) and the United States of America (number two) were not even included in the German study. Is Canada the only country that has a carbon tax? No. Over 70 countries now have some form of carbon emissions taxation. Canada’s problem—globally speaking—is that it was late to the dance. Countries such as Germany, Sweden, and the United Kingdom were early proponents of reducing their GHG emissions well before we were. We’re just playing catch-up. Since 2019, every Canadian province has had a carbon tax fee through fuel charges and, for large industries, an output-based pricing system. While all provinces (not territories) are required to have a carbon tax system in place, it can be their own provincial version, or they are allowed to use the federal example. According to The Conference Board of Canada, when it comes to GHG emissions as of 2013—granted, this was 10 years ago—Canada’s per capita GHG emissions are very high, earning Canada a “D”—only the US and Australia fare worse. Alberta and Saskatchewan score a “D-” with much higher per capita GHG emissions than the worstranked peer country, Australia. New Brunswick was also higher (or worse) than the Canadian average, though it has its own provincial carbon tax levy. Québec received an “A” grade, placing seventh overall in the international report. Québec’s provincial carbon tax seems to be working quite well. Receiving a grade of “B” is British Columbia, a province that doesn’t pay a federal carbon tax because it set up its own provincial carbon tax in 2008. And, as of 2013—after five years of a provincial carbon tax—the province found that the ag industry there was not negatively impacted. And while Ontario was also a paying “B” recipient, it doesn’t explain why the D-graded New Brunswick is not paying. Statistics Canada said in a February 2023 report that Québec’s and British Columbia have the lowest per capita household GHG emissions among the provinces, while Atlantic Canada has some of the highest numbers. At 2.7 metric tons (MT) per capita, the provinces of Québec and British Columbia produced the lowest per capita household GHG emissions in 2020 among the provinces. Nunavut (0.9 metric tons), the Northwest Territories (2.9 MT), and Ontario (3.0 MT) were also below the national per capita level, while Manitoba (3.2 MT) matched it. Per capita household GHG emissions were highest in Saskatchewan (5.1 MT), Newfoundland and Labrador (5.0 MT), Prince Edward Island (4.9 MT), Nova Scotia (4.4 MT), and Alberta (4.4 MT). New Brunswick (3.7 MT) and Yukon (3.5 MT) were also above the national average. Among the provinces, Newfoundland and Labrador (+1.0 MT) had the largest increase in per capita household GHG emissions from 2009 to 2020, while Prince Edward Island (-2.5 MT) had the largest decline of all Canadian areas. What sectors are the biggest producers of GHG emissions per region? Households are the largest emitters in Central Canada. Both Ontario (29.6 percent) and Québec (28.4 percent) counted households as their greatest source of direct GHG emissions in 2020. Pulp, paper, and paperboard mills account for onefifth of emissions in British Columbia. Pulp, paper, and paperboard mills (20.5 percent) and households (18.7 percent) were the largest sources of GHG emissions in British Columbia in 2020. Crop and animal production are important contributors to GHG emissions in several provinces. In 2020, the crop and animal production industry accounted for the largest share of total GHG emissions in Manitoba (37.2 percent) and Saskatchewan (24.4 percent), and the second largest in Prince Edward Island (22.8
16 THE CAAR COMMUNICATOR percent), after households (46.2 percent). In Saskatchewan, in addition to the crop and animal production industry, the oil and gas extraction industry (22.9 percent) and the electric power generation, transmission and distribution industry (21.0 percent) also had a larger share of total emissions. These three industries accounted for more than two-thirds (68.3 percent) of the total emissions in the province. The electric power generation, transmission and distribution, and oil and gas extraction industries are among the top emitters in Atlantic Canada. The electric power generation, transmission and distribution industry was the most significant source of GHG emissions in Nova Scotia (42.6 percent) in 2020. In New Brunswick, the highest contributors were the electric power generation, transmission and distribution industry (21.1 percent), pulp, paper, and paperboard mills (20.4 percent), and households (18.1 percent). In Newfoundland and Labrador, it was determined that households (28.8 percent) were the primary GHG emitters in 2020, followed by the oil and gas extraction industry (18.7 percent). The mining industry is the largest GHG emitter in Nunavut and the Northwest Territories. The metal-ore mining industry accounted for almost two-thirds of the GHG emissions in Nunavut (63.3 percent), and the non-metallic mineral mining and quarrying industry accounted for one-third (32.9 percent) of the GHG emissions in the Northwest Territories in 2020. In Yukon, households (26.9 percent) were responsible for over one-quarter of total GHG emissions, followed by support activities for mining and oil and gas extraction (17.7 percent). Unsurprisingly, the duopoly of oil and gas extraction was and remains Canada’s top industrial user of energy in 2020, representing 18.1 percent of Canada’s total energy used. It’s true. The oil and gas extraction industry has also been the highest GHG-emitting industry from 2009 to 2020 and was responsible for 22.4 percent of Canada’s total GHG emissions in 2020. The one thing we can all be sure of is that there is no one sector that’s the GHG emission offender. According to Statista.com, greenhouse gas emissions in Canada by sector in 2021 originated in the CARBON TAX Produce. Protect. Proud. 2024 CAAR CONFERENCE NOVEMBER 19-21, 2024 | REGINA,SK SAVE THE DATE!
DECEMBER 2023 17 following sectors: • Oil & Gas: 28 percent; • Transportation: 22 percent; • Buildings: 13 percent; • Heavy Industry: 11 percent; • Agriculture: 10 percent; • Electricity: 7.7 percent; • Waste and others: 7 percent. If you do the math, we come up to 98.7 percent, but obviously, Statistica didn’t include all of the other sectors with small percentages. The agency defines heavy industry as including emissions from non-coal, non-oil, and non-gas mining activities, smelting and refining, and the production and processing of industrial goods such as fertilizer, paper, or cement. For waste and others, “others” include emissions from coal production, light manufacturing, construction, and forest resources. So what’s the big deal? Well, Canadian farmers are paying carbon taxes—charged to any individual or business that uses carbon-based energy such as natural gas, diesel, and gasoline. The tax or fee is charged for every tonne of greenhouse gases (GHGs) that is dispersed up into the atmosphere. But Canadian farmers complain—rightly so—that having to pay this carbon tax affects the way they do business because competing countries in agriculture don’t have to pay a similar carbon tax. For Canadian farmers, they say that paying a carbon tax shrinks their profit margins and dilutes their global competitiveness. Do carbon taxes work to reduce GHG emissions? Sweden has been using a carbon tax since 1991— yes, for 32 years. Sweden’s Ministry of Environment has estimated that its carbon tax has caused a decrease in GHG emissions by 20 percent—and this does not include any regulation changes. It was farmers not wanting to be penalized by the constant payment of a carbon tax that has caused many of them to find alternative farming methods that reduce their GHG emissions. While it may seem at the outset that the solution is simple for farmers who don’t want to pay a carbon tax—change the way you farm—it’s not that easy. As noted, Canadian farmers are concerned about shrinking profit margins—and Canadian ag retailers should be, too. Many of the inputs that ag retailers provide are things that contribute to a farm’s GHG emissions. As well, these inputs cost ag retailers carbon tax fees. Examples of such contriubutors include seeds, herbicides and pesticides, farm equipment and parts, and the shipping of such things to your shop—these are things that will cost the ag retailer carbon taxes, and because the costs need to be recaptured, it will mean higher costs to the farmers. It will mean that farmers will seek higher prices for their yields (as they always do!) but may not achieve them because other global competitors can provide the same products without having to be burdened by a carbon tax. And anything that utilizes commercial transportation to leave the farm—such as a truck, train, or ship—will be carbon taxed. It’s not just transportation. It’s also expected that producers of electricity required for heat, irrigation, and seed cleaning will incur costs that will be passed on to the consumer (i.e., the farmer). And fertilizer! There’s already a global availability shortage thanks to the Russian war against Ukraine, which also involves Russian ally Belarus, as all three were big suppliers of global fertilizers. But Canada has a large supply of fertilizer, except that it’s expensive. Canada has large supplies of oil and gas, yet consumer costs are high. Why? Taxes. It’s the same for fertilizer. Albert produces urea and anhydrous ammonia fertilizers. However, in the production of both, natural gas is utilized. Since natural gas is a fuel, it comes under the carbon tax fess charged to the manufacturer. As such, production of urea and anhydrous ammonia fertilizers is subject to a carbon tax. Luckily for fertilizer providers, global politics (war), playing catch-up after a global pandemic (factory shutdowns), and a global supply chain disruption (ports closed and backed up), fertilizer has been in hot demand—if you can get it. Loyal Canadian farmers would, of course, prefer to buy Canadian. But if they can’t because of the added carbon tax cost and have to buy exported fertilizer because that fertilizer had to be shipped, it increases a farmer’s carbon footprint. Because farmers are slaves to the whims of agents and buyers setting the price for their yield, they are unable to pass on any additional input costs. So, for Canadian farmers who already work against razor-thin margins, additional input costs and carbon taxes greatly affect the bottom line. So what’s a Canadian farmer to do? As long as the carbon tax remains in place—and Sweden’s near 30-year use is proof enough that the
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