Madam Speaker, be it through the use of more intensive use of cover cropping or rotational grazing, recently we had officials from Agriculture and Agri-Food Canada testify at committee. They acknowledged that greenhouse gas emissions from agriculture have remained steady since 2005, despite increased production.
By my own personal experience farming in a sandy vegetable production area, it was not uncommon to experience sandstorms in spring as the soils were being plowed to prepare them for potato, tomato and other vegetable seedlings. Having to turn on headlights to drive at midday happened more than once, I am sorry to say, in the mid-1980s. That does not happen anymore. Windbreaks have been planted, cover crops are managed far more intensively, and the use of strip tillage has virtually removed wind erosion as a concern.
Third, ag has a strong record of innovation, of adopting new technologies, such as the use of GPS technology on the farm, the growing adoption of variable rate application, both in seeding and in crop protection products, robotics in our dairy sector, automation and climate controls in our greenhouse sector and many other innovations.
Why is this? It is because farmers know they have to compete. To paraphrase John F. Kennedy, this industry has often been described as one of the few that buys their inputs retail, sells their outputs wholesale and pays the freight both ways. This leads me to my final framing point.
By and large, farmers are price takers. They cannot effectively pass along imposed cost increases to their buyers. Let these four points set the stage for my remarks of Bill C-206, An Act to amend the Greenhouse Gas Pollution Pricing Act (qualifying farming fuel), adding propane and natural gas to be exempted qualifying farm fuels from the carbon tax.
We have heard much in this House about the harvest from hell in 2019. Particularly, in Western Canada, this very difficult harvest, which saw extensive and prolonged rainfall, as well as early snowfalls and frost right before and during harvest, necessitated the use of natural gas and propane to dry the grain into a storable condition. Farming in Ontario requires the use of grain dryers every year, particularly for grain corn, though it is often also needed for soybeans, wheat, barley, oats and canola.
During a recent conversation with Dr. Alan Mussell, he reminded me that farmers have been extremely focused on their use of energy since the very beginnings of organized agriculture. They have focused on maximizing yield and quality, and maximizing the feed conversion as plant energy is converted to protein. They have been focused on the 99% of the energy used on the farm, the energy received from the sun, solar energy. By maximizing the efficiency of this energy, by maximizing yield, quality and conversion, and by achieving greater plant growth per hectare, as a consequence, they have also increased carbon sequestration.
In fixing CO2 as a consequence of driving yield, it is heavily influenced by the management techniques employed by progressive farmers. It has only been in the last decade or so that there have been whispers about agriculture as being a dirty industry. Since the use of electrical and fossil fuel energy sources comprises only a small component of energy use, farmers have rightfully been historically focused on maximizing efficiencies through increasing the yield and quality of their crops by maximizing the use of the sun, by driving yield and consequently, sequestering carbon.
Incidently, the movement to reducing or eliminating tillage provided improvements in moisture retention and a reduction in erosion and, of course, increased sequestration, all without the imposition of a tax, something also not acknowledged in the Greenhouse Gas Pollution Pricing Act. However, then to increase agriculture's focus, even on the relatively small use of energy from fossil fuel sources, does it not make sense that adding a carbon tax would drive a reduction in its use? The answer is no for three reasons.
First, imposing a carbon tax on farm fuels used for grain drying could induce a logical response by the industry that reduces yields and then is at cross-purposes with the goals of the tax. Particularly, with respect to the growing of corn, farmers have chosen varieties that require the most growing degree days that can be grown in their region with acceptable risks to maturity so as to maximize the conversion of solar energy into yield, which then also maximizes carbon sequestration.
They could choose to grow shorter-season varieties, which would be drier at harvest, to avoid carbon tax costs. This would require less energy to dry the crop into a storable state. However, this comes with a corresponding reduction in yield, less fixing of CO2 and requires more land to grow the same amount of grain for their markets.
Second, commercially viable, scalable alternatives to using natural gas and propane simply are not available today. Because there are not any viable alternatives, the demand for fuel tends to be unaffected by price, making additional fuel charges in the form of an additional tax an ineffective policy tool to lower emissions. The additional fuel charge as presently applied is punitive. It taxes our farmers, with little to no benefit for the environment.
It has been mentioned that the recent budget did contain some funding, with $50 million for research to explore and develop viable alternatives. This initiative can be supported. If and when viable alternatives are commercially available, they are usually more expensive than the status quo. Incentivizing their adoption rather than taxing a present practice with no alternatives is a far better policy tool.
If possible, use the carrot rather than the stick. As mentioned earlier, farmers cannot pass this additional cost on to consumers, and this leads me to my final point, which is basic fairness in the market.
Our Canadian grains compete directly with American grains and are priced off the Chicago Board of Trade. Our own farm is primarily a processing-vegetable farming operation, but Lycoland Farms also produces grain and oil seeds. Because our volume of production is too low presently to warrant an investment in drying and storage facilities, we deliver our grains to Tec-Land, a farming operation and elevator in Wheatley, and receive a price based in U.S. dollars off of Chicago plus a local basis.
This basis takes into account the exchange rate, local supply and demand factors and freight considerations to market. Tec-Land has options for marketing to customers such as Hiram Walker or ADM in Windsor, Greenfield Global, an ethanol producer in Chatham here in my riding, Cargill in Sarnia or Ingredion in London, but none of these customers will pay more basis to Tec-Land to cover the carbon tax and drying cost. Why is that? Each of these end-users can also buy American corn or soybeans, and they often do, and these grains do not incur a carbon tax on the drying or on the farm fuels used to produce them.
The Greenhouse Gas Pollution Pricing Act did exempt gasoline and diesel fuel, and Bill C-206 is looking to correct the oversight regarding natural gas and propane used for drying.
Many of my neighbours and most farmers in our riding, unlike Lycoland, have grain and oil seeds as the focus of their operations. Many have invested in their own drying and storage facilities. I recently spoke with neighbours, such as Paul Tiessen, Tom Dick, Walt Brown, Doug Mills and many others, who have all had the same experience as Tec-Land: When they were marketing last season's crops, they were unable to pass along any additional carbon tax costs to buyers.
Recent research from the Grain Farmers of Ontario has estimated that by 2030 the carbon tax on fuel used for drying will cost the average farm an additional $46 an acre. On an average 800-acre Ontario grain farm, it is a tax of $36,800 that cannot be passed along.
In conclusion, I urge all members of the House to support passing a bill that would remove the potential of being at cross-purposes with the goal of lowering greenhouse gas emissions. Please support the removal of a tax for which users have no viable options, and please support basic fairness in the market for the ag sector.