Aerial applicators brace for Canada-U.S. trade winds
By Tim Kalinowski
Coming off a period of unprecedented growth, Darren Tiede, president of Alberta Aerial Applicators Association and owner of Target Airspray in Strathmore, says his industry is seeking to navigate new challenges in a very uncertain world at the moment.
“We have been going through a period of growth following the the flow of the larger farm economy,” confirms Tiede. “There has been a lot of expansion, new applicators and existing applicators adding larger and more aircraft. But we have our set of challenges too. Perhaps that farm economy has maybe stalled out a little bit recently, and the trade wars and everything have people a little bit on edge.”
The Alberta carbon tax has also proven to be an obstacle to his industry, and a drag on its growth.
“The Alberta carbon tax applies to our inputs, but not to the larger farm economy,” he states. “That makes us a little bit less competitive in the last year or so. We have to pass that cost along; whereas if they spray themselves they don’t have that cost on their fuel. We are starting to feel a bit of pain in that regard.”
Tiede says since most Canadian aerial applicators buy their aircraft and parts for them in the U.S., NAFTA and a potential looming trade war with our southern neighbour is another huge concern. He gives an example of how integrated both sides of the border have become when it comes to that broader market.
“All of the engines for these American-made spray planes come out of Canada by Pratt and Whitney, or 90 per cent of them do anyway,” explains Tiede. “If they get hit with tariffs as a foreign company, does that make our engines worth more?
“And then if our government decides it wants to slap a tariff on agricultural equipment, would agricultural aircraft be caught up in that? We are waiting with bated breath like everybody else is.”
Even more broadly speaking, Tiede asks what happens to his clients in the agriculture industry if we are in for tougher economic times due to these ongoing disputes with the United States?
“There’s that old adage in our business which goes, ‘If the farmer gets a sniffle, we catch pneumonia,’” says Tiede. “If his business is suffering then definitely our business is going to suffer worse.
“We are concerned that if our farmers can’t get our products to markets then it is going trickle down to us and affect our businesses. Their success is the main ingredient of our success.”