Grain Drying Exemption May Only be Partial Victory 

Bill C-234 is expected to soon receive third reading in the House of Commons, but not all producers are set to share the benefit. 

An Act to amend the Greenhouse Gas Pollution Pricing Act, Bill C-234 was initially proposed by Huron-Bruce MP Ben Lobb to exempt the fuel used to dry grain from the federal government’s controversial carbon tax. But in an email message Wednesday, Russel Hurst, executive director of the Ontario Agri-Business Association, said the language of the bill still does not allow the exemption for any grain dried in a commercial elevator. Instead, the exemption would only apply to grain dried in an on-farm elevator. 

Given that 50% to 60% of Ontario grain is typically dried in commercial elevators, Hurst said Bill C-234, as currently constituted, would exclude most producers from the exemption. 

With Bill C-234 poised to move on for Senate approval following third reading in the House, Hurst said his association will be reaching out to Senate members to ensure they understand the implications of the unequal treatment of farm versus commercial grain drying, and try to win further amendments. 

“As a sector we cannot have government policy that results in winners and losers within the marketplace for undertaking a necessary grain management process where there are no realistic large-scale alternatives,” he said. 

Early last year, Grain Farmers of Ontario, which represents the province’s 28,000 barley, corn, oat, soybean and wheat farmers, said the federal carbon tax would cost an average farm an additional $46/acre in direct drying costs by 2030. On an average 800-acre farm, that translates into an additional cost of operations of nearly $37,000. 

According to Hurst, the exemption for on-farm corn drying compared to no exemption for commercial drying would result in an approximate $14/acre cost of production discrepancy for the producer. That difference will increase to as much as $18/acre effective April 1, when the carbon tax increases to $65/tonne from the current $50, he added. 

When the original Greenhouse Gas Pollution Pricing Act was originally drafted in 2018, Hurst said it included several exemptions across various sectors. For agriculture, the exemptions were for gas and diesel used in so-called ‘farming activities.’ Part of what Bill C-234 intended to do, he said, was to modify the definition of a farming activity to include grain drying (and livestock housing heating) and eligible fuels to include propane and natural gas. 

The problem, he said, arises from the fact commercial drying occurs beyond the farm gate – although it is still the farmer who ends up footing the bill. 

Commercial grain drying was also an unresolved gap in the previous iteration of Bill C-234 (Bill C-206) that died in the parliamentary process when the last election was called in summer 2021, Hurst said. He added that Ontario is really the only region where this issue exists. In Western Canada, the vast majority of grain drying occurs on farm. Quebec has its own carbon pricing program and Atlantic Canada does very little grain drying. 

Source: DePutter Publishing Ltd.

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