Calgary, Alta. — The Western Equipment Dealers Assn. (WEDA) is concerned that the implementation of the Federal Carbon Tax of a minimum of $50 per tonne by 2022 will have a negative effect on Canadian agriculture. The equipment dealers’ association, which represents farm, construction and outdoor power equipment dealers in Canada, is asking the Federal government to conduct a study on the long term effects this carbon tax will have on Canadian agriculture, prior to imposing the tax on non-participating provinces by 2018.
“It is no secret that Canadian agriculture is a carbon intensive activity,” stated John Schmeiser, CEO of the Western Equipment Dealers Assn. “Our farmer customers are in the business of producing food for Canadians and consumers around the world, and doing so without fossil fuels is impossible. Having to pay additional taxes on the use of fossil fuels will hurt Canadian productivity.”
Canadian farmers, equipment dealers and farm equipment manufacturers all have the potential to be negatively affected by increased taxes. WEDA is concerned that adding additional costs to the production of food will result in lower margins for farmers and higher costs for food for consumers.
“At every step through the farm equipment channel — from the manufacturing plant right down to the producer — a Carbon Tax will add additional costs and make Canadian agriculture less competitive to the United States and the rest of the world. Canadian farm equipment manufacturers, especially those based in the Canadian prairies, have developed an outstanding reputation for building quality products. A large number of them operate worldwide, and with additional taxes here in Canada, it may be enough of an incentive for a manufacturer to move production offshore,” added Schmeiser.
WEDA argues that agriculture is leading the way in new technologies to reduce emissions. Over the past number of years, farm equipment manufacturers have invested significantly in new, cleaner engine technologies, such as Tier IV emission standard engines. Additionally, farmers have adopted many sustainable soil conservation practices such as zero-till. WEDA is hopeful the federal government will take these innovative approaches into consideration before imposing this negative tax.
WEDA is also concerned that agriculture in Canada in currently experiencing a slowdown, with reduced commodity prices for farmers, tractor sales down more than 15% over 2015 and manufacturers are cutting back production due to the surplus of equipment. The addition of another tax, while the market is trying to recover does not bode well for Canadian agriculture.
“We have examples such as British Columbia and Australia where Carbon Taxes were put in place, but have not resulted in a reduction of emissions. These are good lessons that a Carbon Tax doesn’t change behavior. And without any sense to what tax credits may come back to the agricultural community, it is hard to believe this will be good for Canadian agriculture.”