Carbon Pricing: Kicking the Can Down The Road Is Over

Good weather over the past couple of weeks has helped me almost nail down my soybean harvest as of October 25th. Yields are good in the deep south west of Ontario. There has been substantial acres of wheat planted, albeit a lot later than many of us would’ve wanted. That is just the nature of farming. Every year is different and 2018 has proved that once again.

The news has been a bit of a blur this week, simply because of all the activity in the fields. I did catch the federal government announcement of a carbon tax being imposed on the provinces, which aren’t complying with the federal government’s climate change policy. Starting in January 2019 there will be a $20 per tonme tax put on carbon emissions. This will mean that there will be an increase in gasoline on January 1st of 4.42 cents per liter. There’ll also be an increase of 3.91 cents per cubic meter of natural gas. There will also be other price increases on diesel, aviation fuel and coal.

Do you feel lighter in the wallet already? The federal government is planning on rebating those taxes back to consumers. In fact, the federal government says that 90% of that will go back to consumers and 10% to small business schools and hospitals. To make you feel better, you will get the annual rebate back in April when taxes are due, either as a rebate or deducted from what you owe.

Many of you that have read this column over the last 33 years, you’ll know how I feel about carbon taxes and climate change. I’m a climate change believer. In my mind, it is always been very difficult to argue with the scientists. I have also traveled six times to Bangladesh and have seen upfront the ravages of rising sea levels in that country. I’ve also respected the many scientific reports that come out of the Canadian Arctic, which shows a decrease in the polar ice cap over time. I’ve even been schooled by family, who told me about ice cores taken from the Greenland ice cap, showing climate change over period of hundreds of years.

I’ve also seen what I think are the effects on my own farm over my career. Some people, as I said before, find it hard to argue with the climate change scientists even though there are some activists who have a climate change agenda, which is not as honest. Politicians around the world have responded with the idea of putting a price on carbon and that’s why we have carbon taxes in many jurisdictions around the world. The hope was always to create an incentive not to produce carbon and therefore not to change the climate. The difficulty lies in the fact that changes now may or may not have an effect on the climate in 30 or 40 years.

Interestingly enough, I wrote initially about this about 20 years ago in this column. At that time carbon sequestration was a buzzword in Ontario agriculture, as less tillage and no till production methods were seen as a giant carbon sink and farmers were set to benefit. At the time I actually did an article where I set the price of carbon at $80 a metric tonne. 20 years later the federal government is now talking about a price of carbon of $20 a tonne and you know the rest of the story. They are not calling it a carbon tax, but the price of pollution. It is degenerated into a political battle.

The Prime Minister says this is simple economics to reduce carbon production. By putting a price on pollution, we will produce less carbon and help the problem. However, governments are set to bring in billions from this and you know how that works. Typically, governments of any political persuasion don’t give up the levers of tax revenue that easily. His ideology might be sound, but from a practical standpoint, especially in rural areas, the carbon tax is overbearing.

This policy is uneven across the country, because British Columbia, Alberta, Québec, Nova Scotia, Prince Edward Island and Newfoundland already have a carbon tax. The federal policy will work differently there, but the idea is the same. The Prime Minister is lining up this policy in front of the federal election next year. The Conservative opposition is taking the opposite tack, saying it’s a tax we cannot afford.

It’s too early for me to tell how Canadian agriculture may be impacted by this new federal carbon policy. At one time many years ago we were set to benefit, but I cannot tell if this early stage where we are at. In fact, it looks like a lot of that initiative of 20 years ago has been lost. Rural concerns often get overlooked simply because of our small numbers.

At the end of the day, this will be a huge political fight, but climate will continue to change unless we find a better way. Surely, some of you disagree with me and that’s fine. I used to be one of you, but I completely changed my mind. Hopefully, new technology might hold the key to climate change in the future. However, it is a new day in Canada. Carbon has turned into a highly politicalized issue on the tail of the greater climate change environment. Who would’ve thought 20 years ago when I wrote my first carbon sequestration column it would become so controversial? Kicking the can down the road, has certainly worked until now.