Proposed Refinements to the Federal Carbon Pollution Pricing System: Submitted by KAP to the Department of Finance Canada


Source: Keystone Agricultural Producers

Keystone Agricultural Producers (KAP) is Manitoba’s general farm policy organization, representing and promoting the interests of thousands of agricultural producers in Manitoba. Our membership consists of over 6,000 members and 25 commodity groups who set our organization’s policy through a grassroots governance structure. We work with government, industry and stakeholders to ensure that primary production in Manitoba remains profitable, sustainable, and globally competitive.

KAP supports the proposed refinement to the federal carbon pollution pricing system and the resulting fuel charge exemption on fuel delivered to farmers at cardlock locations. We acknowledge the federal government’s quick reaction when the cardlock oversight was pointed out by KAP and other farm groups. Cardlock is becoming increasingly popular as farmers move away from storing fuel on the farm due to theft and environmental concerns. Cardlock fuel storage is a tangible demonstration of farmers being mindful of their impact on the environment. We appreciate the government taking the necessary steps to correct the oversight and ensure that farmers are receiving the exemptions as intended by policy.

However, KAP remains concerned about the potential impacts the carbon tax will have on the profitability and competitiveness of the agriculture industry going forward. Farmers still face significant cost increases on other fuel sources such as natural gas and electricity, and indirect costs such as those on inputs and transportation. Most increased production costs will eventually be added to consumer prices, but only for domestic production, thus making the sector less competitive and vulnerable under current trade agreements. Costs that cannot be passed on will reduce farming margins.

The federal government has recognized that the fuel charge has the potential to significantly reduce the global competitiveness of the Canadian fruit and vegetable sector with its exemption on 80% of the fuel used to heat greenhouses. The same holds true in other agricultural sectors that rely on natural gas and propane for heating barns and drying grain. In order to maintain profitability and competitiveness under a carbon tax, KAP supports a full exemption on all direct emissions from agricultural production including fuels and utilities that are used to heat and cool confined livestock spaces, greenhouse spaces, and operate grain dryers.

Additionally, KAP policy recommends that a portion of the revenue generated through a carbon tax be recycled back into programming for farmers to support their efforts in delivering ecological goods and service and building adaptive capacity to weather volatility caused by climate change. For instance, funding for adaptation and energy projects, such as through the Low Carbon Economy Energy BMPs, would be more effective in changing behavior in the agricultural sector. This is after all the intention of imposing a fuel charge.

On behalf of KAP, thank you for your consideration of this submission. We appreciate the opportunity to be involved in the regulatory development process.


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