WINNIPEG/TORONTO Oct 18 Canada's carbon price
may weaken the farm sector in one of the world's biggest
grain-shipping countries, raising farmers' costs and
discouraging investment in fertilizer production, industry
Ottawa this month promised a price on carbon emissions by
2018 to protect the environment, and will let provinces choose
between a tax or cap and trade system. Carbon pollution will
cost C$10 a tonne in 2018, rising C$10 a year until it reaches
C$50 in 2022.
At C$50, it would raise fertilizer prices by C$2 per acre
for Canadian farmers, and some experts peg the total farm cost
at C$6, according to CIBC.
"Everyone is paying attention to this, especially in a
downtime for the (farm) economy," said Robin Speer, executive
director of Western Canadian Wheat Growers, which has gathered
2,500 petition signatures opposing the tax.
Reduced soil tilling and use of more fuel-efficient
machinery have made Canadian farming more friendly to the
environment, and crops absorb carbon from the air and leave it
in the ground, Speer said.
Agriculture accounted for 10 percent of Canada's total
greenhouse gas emissions in 2014, behind the oil and gas, and
transportation sectors, which accounted for about one-quarter
each, according to Canada's environment department.
Nitrogen fertilizer producers, among major polluters in
western provinces, are leery of a carbon price. Agrium
and CF Industries will pay Alberta's provincial carbon
tax of C$20 per tonne when it takes effect next year.
Higher costs will discourage future expansion, and shift
production elsewhere, said Garth Whyte, chief executive of
industry group Fertilizer Canada. To prevent that, provinces
should credit fertilizer makers for reductions in nitrous oxide,
a byproduct of production, he said.
"Since Canadian plants are very efficient, the only way to
significantly reduce carbon emissions is to reduce production."
Canadian Agriculture Minister Lawrence MacAulay, asked
whether a carbon price would make farm products less competitive
globally, said provinces have options for using carbon revenue.
"It could be (used) to reduce taxes, in innovation, it could
be to help farmers make sure the product they produce is less
expensive," he said on Oct. 7.
British Columbia, which already charges a carbon tax, gives
farmers an exemption on farm fuel purchases. Alberta plans to do
Manitoba will recognize farm sector concerns in its plan,
which is under development, said Sustainable Development
Minister Cathy Cox.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by