Opinion: Debating Carbon Price Exemption as Temperatures Rise
The image of Nero fiddlin’ while Rome burned comes to mind after watching the now-infamous Bill C-234 being ping-ponged to death between the Senate and House of Commons.
Although if you can believe anything you read on the internet these days, even that story is a little suspect. Rome burned in the first century, about 1,000 years before the first fiddles were played. If the reportedly callous emperor played anything while the city burned, it was likely a cithara — but that just doesn’t have the same ring to it.
Perhaps that makes it even more applicable as an analogy for the pickle we’re in over a piece of legislation that would exempt grain-drying fuels from the federal government’s carbon-pricing program.
Between all the amendments, the lobbying, exercises in public shaming and even a bit of bullying, there has been lots of hot air exhaled over this one. And for what?
Most of what farmers do is already exempted from carbon pricing, which many like to call a tax, just as most consumers are sheltered somewhat through rebates.
Propane and natural gas used to dry grain and heat barns were not exempted. They are significant costs to producers and exemptions arguably should have been granted. While grain drying is a sporadic need in Western Canada, it is routinely used in the east to dry corn and soybeans after harvest. Grain Farmers of Ontario has estimated the increased costs to an average-size farm at more than $36,000. Barn operators can use alternative heating sources, but retrofitting requires significant investment.
That’s the logic behind the private members bill C-234.
The federal government could have given farmers a rebate, but that would be supporting the status quo. The whole point of carbon pricing is to provoke change.
Little has been said about the fact that the government came up with a program to subsidize the installation of more efficient grain-drying systems through its Agricultural Clean Technology Program. That program allocates $50 million out of the program’s $495.7 million fund for the purchase and installation of better drying systems. Another $10 million is set aside for fuel-switching initiatives.
As of March 2023, the federal government had committed $1.5 billion to accelerate the agricultural sector’s emission-reduction progress. You could say more is needed, but it’s much easier finding fault with something that exists than it is poking holes in dead air.
Exemption or not, it’s hard to see how this could have any effect on food prices, as some have claimed. Grain farmers don’t have any mechanism for recouping their costs by raising their prices. They take what the market pays.
What does drive up food prices and carve an even bigger chunk out of farm incomes, however, is production shortfalls, which if current climate trends continue, are a real possibility.
Statistics Canada says yields were generally lower across much of Canada this year due to the second drought in three years. There were some exceptions, such as higher yields for soybeans in Ontario and Quebec, but for the most part, any commodity supply increases in 2023 were related to higher acreages offsetting yield declines.
The irony is this agonizingly twisted debate over Bill C-234 is taking place during an abnormally warm and dry winter after an abnormally hot and dry summer. The drought of 2021 was of historic proportions. Globally, temperatures continue to rise, with 2023 on track to being the hottest year on record.
As of Nov. 30, Canadian Drought Monitor map indicates the whole country is still abnormally dry with large patches of territory in moderate to severe drought. Southern Alberta is experiencing extreme to exceptional drought. At what point does abnormal become normal?
There was little need for grain drying across most of Canada this fall. Of course, we can’t predict the weather, but even if the bill eventually succeeds, it doesn’t save farmers money on costs they don’t incur.
Which brings us back to the debate over whether Nero really fiddled while his city burned to the ground and whether it was a fiddle that he played.
In the context of what was taking place all around him, does it really matter?
