In this two-part Perspectives article, we spoke to two members of the Manitobans Against Carbon Taxes Coalition about how they believe a carbon tax will hurt the agriculture sector and the economy.
Günter Jochum – Western Canadian Wheat Growers Association, Producer
Günter Jochum has been a member of the Western Canadian Wheat Growers Association for more than 20 years. He took on a more active role within the Wheat Growers by becoming director in the spring of 2017, hoping to promote positive, market-oriented policy solutions for producers. He and his family farm in St. François Xavier, Man., just west of Winnipeg.
Todd MacKay – Canadian Taxpayers Federation
Todd MacKay has been the prairie director of the Canadian Taxpayers Federation (CTF) since 2015. He’s published numerous commentaries on carbon taxes and the many questions surrounding it, has launched petitions opposing the tax and is regularly present in the media discussing the issue.
Part one of the discussion took place before the Manitoba government’s Made-in-Manitoba Climate
and Green Plan was released.
The Communicator: On July 13, you launched the Manitobans Against Carbon Taxes Coalition (MACTC) to stop implementation of a provincial or federal carbon tax in Manitoba – what has happened since then?
Todd MacKay: We’ve run a province-wide newspaper campaign pointing out that Manitobans don’t want a carbon tax. We’ve organized many email and social media campaigns to increase awareness and get that message through to decision-makers at the legislature. But, perhaps most importantly, Manitobans themselves have made it increasingly clear that they’re not interested in a carbon tax. They’re concerned it won’t work and that it’ll cost them money. The polls continue to show that Manitobans don’t want a carbon tax and I think that viewpoint is gaining strength.
Günter Jochum: There is no farmer who says, ‘Carbon tax would be a great thing because it drives innovation.’ That doesn’t work and the Wheat Growers are 100 per cent opposed to any sort of carbon tax.
The Communicator: What are the biggest concerns about a carbon tax in regards to the interests you represent?
A carbon tax does not give us incentive to improve – it actually does the opposite. It takes away revenue that would allow us to invest in better technology.
GJ: It’s a lose-lose proposition. We get dinged on both ends of the spectrum – when we purchase inputs and when we put our crop in, all our inputs will be taxed. Then, when we harvest and deliver our grain to the elevator, we would get taxed again. A carbon tax is not an incentive, it’s an economic disaster as far as farmers are concerned.
Every year, farmers in Manitoba strive to become more efficient and grow more crops with fewer inputs. We can do all that without a penalizing tax. A carbon tax does not give us incentive to improve – it actually does the opposite. It takes away revenue that would allow us to invest in better technology. On a grain farm, we’re already a carbon sink, so if anything, we should get paid for the carbon that we put into the ground, rather than taxed for the work we do to put that carbon back in the ground. We use GPS technology, we use newer varieties, we use equipment that is highly efficient, we do a lot more with a lot less. If anything, a carbon tax will reduce our ability to become more efficient.
TM: From our side, we distill it down to one sentence: we call it a carbon tax because it costs people more money, but it doesn’t actually help the environment. Even if you have the intent of keeping a carbon tax revenue neutral – in other words, offsetting other taxes to counter the burden that a carbon tax imposes – you almost always see taxes go up. British Columbia’s carbon tax is a great example. Initially, they tried to make it revenue neutral, but taxes still went up by hundreds of millions of dollars. Now, the new government in British Columbia is increasing the carbon tax and removing any pretense of revenue neutrality. Anytime you’re going to impose a tax hike, you have to consider whether the pain it inflicts on families and businesses is worthwhile. British Columbia has had a carbon tax for some time and there’s no clear evidence indicating that it is reducing emissions. Günter raises a lot of good issues – internal documents from Agriculture and Agri-Food Canada show very clearly that farmers are dramatically reducing emissions without being hammered by a carbon tax.
It’s about reducing global emissions. Not Manitoba emissions – global emissions. It’s like lifting a piano onto a truck: it’s not that hard if everybody lifts at once, but if only one person lifts, the piano doesn’t move. It’s similar with the carbon tax. Manitoba produces 2.9 per cent of Canada’s emissions, and Canada produces 1.7 per cent of global emissions. It’s only going to work if the rest of the world is going to impose a carbon tax. China and India aren’t imposing a carbon tax, Australia has tried it and repealed it. The United States won’t impose a carbon tax; neither party is showing any interest. It’s not going to happen.
For Manitoba to impose the pain of an ineffective carbon tax while the rest of the world doesn’t — that simply isn’t going to help the environment. That’s the real tragedy here: not only is this bad economics, but if you really care about the environment, you have to look for a solution that really works and a carbon tax doesn’t work.
The Communicator: Looking specifically at the agricultural sector, what are the biggest concerns surrounding carbon tax?
You need incentives to farm smarter, not penalties.
GJ: Just that added cost. Adding cost at every level of what we produce is counter-productive and will cause hardship in the farm sector. What will that ultimately lead to? Farmers banding together and asking for more government handouts? How is that logical? Nobody has given real answers about how much a carbon tax will cost, but it’s going to add as much as $20 to $30 per acre, which is huge.
TM: Carbon tax advocates often suggest a carbon tax will get farmers to improve efficiency. While that may be the intention, there’s a risk of sending a very different signal – that it’s a bad idea to farm in Manitoba and it’s a better idea to farm in North Dakota. The reality is, the world is still going to need just as much wheat, canola, corn and all the other great crops that Manitoba produces. If you make it more expensive to produce in Manitoba, in all likelihood, a farmer in North Dakota or New South Wales is going to pick up that slack. So, you’re going to have just as many – if not more – emissions produced. The only real difference is that farmers in other markets will benefit from that opportunity rather than Canadian farmers.
GJ: Over 80 per cent of what we produce in Canada is exported. We’re a long way from ports and our international markets in the Prairies. Adding a carbon tax to grain production increases the cost of growing our grain, a cost which we can’t pass on. The government says they will refund the tax on fuel used in growing our crops, but there are a lot more costs, other than fuel, involved in growing our crops. So, it’s not revenue neutral.
The Communicator: Why should consumers be concerned about the effect that a carbon tax will have on agriculture?
TM: Two things. Number one, we all go to the grocery store. Ultimately, if you make things more expensive for farmers, those expenses will find their way to the checkout counter one way or another. It’s going to make things more expensive and that’s tough. The other thing is, it makes life tougher for Manitoba farmers. It makes it tougher for them to hire that one extra employee and create an extra job in our community.
If you like the food on your plate and the food in your fridge, you need to like farmers. Making life harder for farmers, especially when there’s no real benefit for the environment, is a pretty dicey proposition.
GJ: I think, again, it’s a lose-lose-lose proposition. The consumer wants to purchase locally as much as possible. This tax discourages local production and drives up prices for the groceries they try to buy – which possibly have to be imported because we won’t produce as much here. I can’t see any upside to this tax – it is penalizing what we do in Canada and what we are doing so well. To penalize us for what we do so well on the farm just doesn’t make sense.
The Communicator: Is there an untold, good news story about the role agriculture has to play in lowering atmospheric carbon that needs to be told?
GJ: The untold story is if we go way back to the 1930s, farmers didn’t know any better and they worked the land until it was black. There was no minimum tillage, no conservation tillage and they got into trouble real fast. A tax wasn’t what saved them, it was farmer innovation. Farmers learned very quickly to change their practices.
We don’t farm the same way year after year. I’ve farmed here for 34 years and every year we ask ourselves, ‘How can we be more efficient? How can we produce more with less? How can we conserve our soil? How can we conserve moisture?’ and we’re doing it. We’re using minimum tillage, zero tillage, conservation tillage, direct seeding – you name it. Those are not just buzz words, that’s actually what’s happening across Canada. We’re doing all the right things; we don’t need a tax in order to become more efficient. You need incentives to farm smarter, not penalties.
TM: Günter is painting the picture perfectly. When you look at the farm equipment now versus even 20 or 30 years ago, the innovation that has taken place is incredible. Agriculture Canada’s internal documents show that they expect a carbon tax to cost western Canadian farmers an average of $3,702 per year.
That’s just the average farm; for many farmers that would be a much, much higher number. But in any case, this is a direct quote from Ottawa bureaucrats: the agricultural sector is producing more without increasing its greenhouse gas (GHG) emissions. That’s an incredible statement. Instead of punishing Canadian farmers, we should be asking them for advice on how the rest of us can do better.
The Communicator: You’ve mentioned the great things farmers are doing to lower emissions, ranging from the practices they’re employing to the equipment they’re using. What’s being done to incorporate that into the carbon tax conversation?
TM: It’s not being taken into account nearly enough in the overall carbon tax conversation. It’s a one-size-fits-none proposal. It looks good on a spreadsheet, but when you try to apply that theory to the reality on Manitoba farms in particular, it just doesn’t line up. They’re already doing everything they can to operate as efficiently as possible, and they’re some of the most efficient producers in the world. Putting a carbon tax in place here runs a real risk of increasing GHG emissions in another market. It doesn’t help the environment and it certainly doesn’t help farmers. The carbon tax debate doesn’t have enough focus on the farm because if it did, we wouldn’t be talking this much about carbon taxes.
GJ: I have to agree. If you slap me with a carbon tax, I will not be upgrading equipment. I will make do with less, and possibly cut back in the wrong places. Right now, most of the equipment we run is Tier 4 compliant, which means there are very little emissions, if any, coming out of our diesel engines. We’re already doing everything we can to upgrade our equipment. If you charge me extra, how does that leave me any money to upgrade to more modern, more efficient equipment that I need to farm efficiently?
The Communicator: What can be done at the local level to participate in the carbon tax discussion?
We all care about the environment; the key thing is to make sure the policies we pursue for a healthy environment can actually work.
TM: Our elected decision-makers, our MLAs and MPs, need to hear from folks. Everybody wants to take care of the environment, and frankly, farmers care more about the environment than anybody else. It’s their livelihood. It’s an heirloom they got from their grandparents and all of them want to pass it down to their grandkids.
We all care about the environment; the key thing is to make sure the policies we pursue for a healthy environment can actually work. If a carbon tax is going to make things harder for farmers and harder for everybody else, but doesn’t actually help the environment, we’ve got to have a really frank conversation about that. Ask your MLA and MP what would really be accomplished by a carbon tax. Ask them to be honest about the impact a carbon tax will have on jobs, grocery store prices and all those things that are part of our day-to-day life. Let’s ask those questions, because if the environment’s important, we’ve got to make sure we have a policy that actually works.
GJ: In a way, the provinces are getting forced into this tax. You need to talk to both sides, provincial and federal. Voice your concerns and just say, ‘This is not a good policy at all.’ We’re here to make farming better, not worse.
Part two took place after the Manitoba government’s Made-in-Manitoba Climate and Green Plan was released.
The Communicator: What are your thoughts on the recently announced Made-in-Manitoba Climate and Green Plan?
Günter Jochum: It was very disappointing to hear that our Manitoba government is implementing their version of the carbon tax. We were really hoping our government would stand with Saskatchewan and oppose any form of a carbon tax. The Made-in-Manitoba Climate and Green Plan is not alleviating any of the concerns farmers have. It is still a tax that will drive up the cost associated with growing our crops, which in turn will make it harder to market our crops.
Todd MacKay: It’s a very poorly devised plan. Ultimately, Manitobans will pay more than double the federal requirement for the carbon tax in the first year, with no guarantee they won’t be hit with a higher federal carbon tax down the road. There’s a very real risk that Manitobans are going to get the worst of both worlds on this. And, perhaps worst of all, the Manitoba government’s plan doesn’t actually outline any specific targets or projections for how much a carbon tax will actually reduce emissions. If Manitobans are going to be paying about $250 million dollars a year in carbon taxes, they should at least see clear goals from the government regarding what they’re going to achieve with that money, and the plan doesn’t include that. It’s a really poor plan. It’s really disappointing that this is what they put together. Hopefully when the consultation period ends, they’ll come up with something better.
The Communicator: Does this change any of the points you mentioned in our first discussion before the plan was announced?
GJ: No. The carbon tax is a bad deal which won’t positively affect the climate, nor will it lessen carbon emissions.
The Made-in-Manitoba Plan doesn’t address farmers’ concerns about the added costs of a carbon tax at all. The province did say that farm fuel will be exempt from the carbon tax, but we will still be stuck with higher costs on all the other inputs needed to grow our crops. I don’t think you can call that revenue neutral.
TM: Ultimately, we will keep pushing the Manitoba government to stand up to Ottawa and fight the carbon tax. Don’t try to acquiesce Ottawa. It’s a bad policy, so fight it. That’s why we’re going to keep pushing forward, especially in light of a plan that’s so poorly constructed. Making people pay double the federal carbon tax now, with no guarantee of getting a lighter carbon tax down the road, is a very, very expensive gamble, and one that they’re not likely to win. So, we’re going to keep on keeping on. It’s a bad policy and we’re going to fight it.
The Communicator: How will the plan affect farmers?
GJ: It is a lose-lose situation for farmers. We will end up paying a carbon tax to grow our crops and then again getting them to market. The added costs make us less competitive on a global level. Over 80 per cent of what we produce in Manitoba is exported and priced at the world market. As farmers, we are not in a position to pass on this added cost.
TM: It’s certainly going to be bad for farmers. There’s language in there about exempting farmers from direct carbon taxes, probably on farm fuels. But farmers are going to get hit with carbon taxes no matter how you cut this up. The vast majority of what Manitoba farmers produce goes to markets around the world. One way or another, it has to be transported and a carbon tax is going to hit that. Additionally, a carbon tax could easily impact fertilizers and many other things farmers need.
It’s a bad plan, even with a partial exemption for farmers. For the general population, it’s going to cost people a lot of money. Overall, Manitobans will pay about $250 million in carbon taxes, and the Manitoba government has made no commitment about offsetting any of those costs by adjusting other taxes. It has provided no useful information about what they will do with that money. A lot of it will go into government spending. All this means for average Manitobans is that taxes are going up, and quite frankly, the last thing Manitobans need is higher taxes. That’s what it looks like they’ll get with this plan, and that’s why we’re fighting it.
Editor’s Note: This discussion has been edited for length and clarity.
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