The Saskatchewan Association of Rural Municipalities (SARM)—along with member RMs—say the new federal Clean Fuel Regulations (CFR) will drastically impact Saskatchewan’s farming community, leading to increased fuel prices and directly affecting farmers’ bottom line.  

Starting July 1, the Clean Fuel Regulations—which are a part of the federal government’s climate plan—requires suppliers to gradually reduce the carbon intensity of the gasoline and diesel fuels they produce and sell for use in Canada.

Although the mandate intends to reduce greenhouse gas emissions from transportation fuels, improve air quality, and make low-carbon fuels more affordable and available, SARM emphasizes it will cause a financial strain to farmers, squeeze profit margins, and place additional pressure on an already challenging industry.

The Parliamentary Budget Office (PBO) predicts a price increase of 17 cents per litre, in addition to the 37 cents the carbon tax will add to a litre of gasoline by 2030, causing an economic cost to GDP of roughly $9 billion a year.

“We’re not sure what the tax will be because it looks like it will be added to delivery for farm fuel,” said Ray Orb, President of SARM.

“This will also affect RMs or anyone else that’s using fuel in Saskatchewan. With that increase we know what the total accumulated effect will be, which will be about 17 cents. They’re predicting that will be the total tax of diesel fuel by 2030.

“We’re not exactly sure yet what will happen on July 1, that might even vary from company to company, but the federal government has put it on to the oil companies to lower their emissions. The goal is to lower their emissions by, I think, 15 per cent by 2030. 

“They’re looking at what was emitted in 2016. That seems very confusing to us. I don’t know if the federal government actually knows what these oil companies have emitted in 2016. It seems to be an arbitrary number the federal government is picking.  

“They’re really just forcing us to lower emissions and that’s going to be another cost for farmers who can’t pass that cost off because their grain prices are set by the market—based on whatever the market demands—and that’s going to be another hurt for farmers for sure.”

In addition to CFR and the carbon taxes farmers have been paying, the Government of Canada also announced their plans for reducing emissions arising from the application of fertilizer in Canada’s agriculture sector last year.

Based on the various policies directed to farmers, Orb expressed his concerns.

“We feel the federal government is really targeting agriculture. They’re really targeting, I think, Saskatchewan and to a larger extent Alberta because we have most of the agricultural land between the Prairie provinces,” said Orb.

“We also have higher uses of energy because we use a lot of fuel on our farming operations, in the field, and to maintain the roads. 

“It’s really going to hurt Saskatchewan and it will really hurt Alberta as well, if the federal government goes ahead with it. That’s why we issued a press release urging the federal government to delay and think about the seriousness because we know it will impact us and the Prairie provinces.”

SARM points out that because agriculture is an energy-intensive industry that requires fuel for machinery, transportation, grain drying and heating, the imposition of the various carbon taxes will directly increase the cost of essential inputs, resulting in farmers’ profitability being strained, and jeopardizing the viability of their operations.

“They fail to consider the unique circumstances of Saskatchewan’s farming sector. The province experiences long and harsh winters, necessitating the use of heating systems to protect livestock and maintain optimal growing conditions in greenhouses and barns,” SARM’s news release stated. 

“This increased energy demand directly translates into higher carbon tax costs, creating an unfair disadvantage for farmers in Saskatchewan compared to those in regions with milder climates.”

Orb emphasized that the different weather conditions farmers face in Saskatchewan should be taken into consideration when rolling out policies such as the Clean Fuel Regulation.

“We have a lot of milage to port, I’ll use an example of us shipping our grain. The majority of our grain gets exported through Vancouver. Those costs will be borne by the railroad because they have to pay for their purchase of fuel. Then the railroads pass that off to the farmers,” said Orb.

“It kind of singles out provinces like Saskatchewan and that goes for a lot of our products like our mining products as well as what’s produced in rural Saskatchewan. That’s what makes us stand out and that’s where we believe this is unfair.”

By Sierra D’Souza Butts, Local Journalism Initiative Reporter

Original Published on Jul 04, 2023 at 09:39

This item reprinted with permission from   Moosomin World-Spectator   Moosomin, Saskatchewant

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