From the Editor: Can you compete under a carbon tax?
Can you compete under a carbon tax?
January 2017 – Three of the four largest greenhouse regions of Canada are facing a similar hurdle. This challenge is politically created, and will require political solutions.
As of this month’s deadline, only one province has reacted positively, though we’re fairly confident the other two will also come on board.
Provincial carbon taxes are developing into a significant impediment to continued growth. For some growers, it may affect their long-term viability.
These new regulations “have the potential to damage Canada’s competitiveness with other jurisdictions,” notes Flowers Canada Growers executive director Andrew Morse. “The fine detail of regulatory implementation,” he adds, “will dictate the impact of this issue on producers.”
Ontario flower and vegetable growers export a great deal of their production. Their ability to compete with growers in regions of North America that don’t have carbon taxes will be significantly impacted.
Encouragingly, producer groups in Ontario were talking to provincial officials about the carbon tax issue. There was no news, however, as of our deadline.
Alberta will also soon face a carbon levy, and the impact will be widely felt.
Some 88 per cent of greenhouses in the province rely on natural gas or propane to grow local crops, both for energy to heat the greenhouses and to capture CO2 to feed to the plants as fertilizer. The levy will add $5 million dollars in direct costs to greenhouse operations in 2017 alone.
The Alberta Greenhouse Growers Association (138 growers) has produced an excellent video on the challenge. You can find the link on a story we posted to our website in late October – “Carbon levy latest hurdle to Alberta growers.”
Tree seedling growers in one co-operative in the province, for example, produce about 50 million trees a year. Over the course of their lifetimes the trees will collectively sequester almost 1.3 million tons of carbon.
Alberta is still a net importer of greenhouse products. There is a huge demand for vegetables during the winter months. Consumers increasingly want locally grown foods. Supplying that market would mean higher energy requirements in heat and hydro. Growers in the province could easily capture much of the import market through expansions, but the carbon levy would discourage many of those projects.
It should also be noted that the Alberta government has announced an exemption for dyed farm fuels, so one would assume natural gas in greenhouses would deserve a similar exemption. A farm fuel is a farm fuel.
B.C. has been dealing with the carbon tax issue for a few years, and provincial officials there have wisely provided growers with a rebate to cushion the impact. Growers are able to claim 80 per cent of the carbon tax paid as a rebate to their business.
Politicians in both Ontario and Alberta will hopefully follow the leadership shown by their B.C. counterparts. With existing labour shortages and slim margins on too many products, growers do not need a new tax that will affect their ability to compete.
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