Natural Resources

Sponsored Content

B.C. Farmers Unharmed by Carbon Tax: Study

Researchers say the exemptions given to farmers are completely unnecessary

Consider the cucumber.

From seed to harvest then packaging and delivery, B.C. farmers shell out a myriad of taxes before pocketing any profits. “By itself, the carbon tax is not the killer. It’s the cumulative effect that has hurt farmers,” says Reg Ens, executive director of the B.C. Agricultural Council. “If you have a cucumber in a plastic sleeve and for some reason that doesn’t make it to the consumer, it’s the farmer who has to come up with some way to remove it separately. Other jurisdictions don’t have that same cost.”

Other jurisdictions, of course, don’t have the carbon tax.

Six years after its implementation, British Columbia remains the only North American region that charges consumers and customers who use fossil fuels. While the tax has been successful in reducing fossil fuel consumption, many in the agricultural sector say they need exemptions and rebates in order to remain competitive.

Ens, for example, said Tuesday that the impact of the tax hurt farmers particularly hard because of other factors: currency fluctuations and lack of trade protection.

Since 2012, greenhouse vegetable and floriculture growers have received tax relief that cover 80 per cent of the tax paid on natural gas and propane for greenhouse heating and carbon dioxide production. But a new study released today from the Pacific Institute for Climate Solutions finds that the agriculture trade doesn’t appear to have been affected by the carbon tax.

“I don’t want to be too harsh on the agriculture sector. It’s an inherently volatile industry and challenging and uncertain, but there is no evidence that the carbon tax, pre-exemption, pre-rebate, had an effect,” says Brandon Schaufele, an economist at Western University who co-authored the report with University of Ottawa economist Nicholas Rivers.

The provincial government, which funds the institute, promised a review of the carbon tax’s impact on farmers back in 2012.

Earlier this year, the province gave farmers another exemption from the carbon tax on coloured gasoline and coloured diesel fuel for farm use. “Once we looked at the evidence, we saw these exemptions are completely unnecessary,” Schaufele said Tuesday.

The study was conducted between 2008 and 2011 and found three explanations why the carbon tax had little effect on farmers. Fossil fuels represent just an average of four per cent of agricultural production costs, and being less carbon intensive than other sectors such as manufacturing may have made farmers more competitive because of the limited impact of the tax.

Schaufele said a third factor why B.C. farmers didn’t suffer as much as they thought they would was because they changed their farming practices, installing greater energy efficiencies.