Farm fuel exempted from Alberta carbon tax, but other costs unknown

By Tim Kalinowski, Staff Writer

While there will certainly be increased costs for the provincial agriculture industry due to the Alberta government’s introduction of a new carbon tax on May 24, Lynn Jacobson, president of the Alberta Federation of Agriculture, says the full impact of the levy will not be known for some time. Jacobson says, generally, a carbon levy is the best way, from an industry perspective, to fairly distribute the cost of the government’s climate change initiatives across the broader spectrum of Alberta society.

“To a large degree here, I think the government got the balance right on this one,” said Jacobson. “There are still some things that we can look at down the road. It could have been a lot worse. And I think the government has been willing to listen to our concerns… When it comes right down to it, we in agriculture, I don’t think, are being charged more than anybody else.”

Jacobson was particularly happy with the NDP’s decision to exempt marked gas used in agricultural operations from the tax, but he has concerns about other areas where farmers will see increased costs. Natural gas use, electricity generation and farm trucking prices will all be impacted by the levy, and this will definitely have a trickle down effect.

“It’s hard to put a figure on what (the tax) is going to mean at this time,” states Jacobson. “One thing we are concerned about is the affect on electricity prices, because electricity is used quite extensively in irrigation. We don’t know how that is going to work out. That will be affected (by this carbon levy) because providers will be charging more (to us) because of the carbon tax on them. Another issue is going to be the effect on trucking. It’s going to raise our trucking costs, especially when many people are now are using custom operators. The big farmers who have their own trucks will not be effected as much, but those who use custom truckers are going to have this levy passed on.”

Natural gas is not as much of a concern, says Jacobson, but still has to be considered. He expects in his own two pump irrigation system he will likely pay about $570 more a year. However, the biggest question marks hanging over the entire carbon levy application when it comes to agriculture, according to Jacobson, are in intensive agriculture operations.

“Another effect we don’t understand at this time is what is going to happen with the greenhouse industry and on the supply management side, the cost of heating their barns and that. It’s hard to put a total figure to it,” says Jacobson. “So for everybody it is going to be a different bill, different circumstances.”

Jacobson is also concerned about the effect of the carbon levy on Alberta industry competitiveness, but feels the rhetoric he is hearing from some is unjustified as yet.

“I don’t agree how some opposition parties are calling this ‘an assault on Alberta.’ That’s a little overblown, I think… Competitiveness is one of the things we are concerned about, but we just don’t know what the full impact will be at this point of time. So we should take more of a wait and see attitude, and keep an open mind. One of things we have found out over the years is it doesn’t help to pound the table a whole lot of times and not meet with the government. You are better off sitting down with them and explaining your positions. And lots of times we have had more a favourable reception to that than going the opposite way.”

Jacobson says, for now, he is willing to give the NDP some rope on the carbon levy and see where ongoing discussions with the government lead over the next few months before the first round of the carbon tax is applied in January of 2017.

“There is going to be some people pounding the table saying: ‘It shouldn’t come down to me!’ But when it comes down to it, I think our industry has to pay our fair share, and we all have to be responsible… When the NDP was elected I expected a carbon tax. It was one of their things they run on. So it’s no surprise they are going down that road.”