Farmers Caught in Crossfire of Climate Change Politics

 I often wonder if axe didn’t rhyme with tax, or a Conservative politician had initially proposed a carbon tax, would we be having a more sensible discussion about climate policies.  Justin Trudeau’s Liberals are definitely on the ropes, swinging wildly hoping to land a punch. Pierre Poilievre has done a superb job capturing the anxiety of Canadians worried about paying their bills.  Recently it’s been Canadian farmers caught in the cross-fire. The Liberals are accused of ignoring the financial pain caused by the carbon tax on farmers, and at the same time charged by environmentalists with abandoning the centre piece of its climate change policies.  Neither of these things are true.  

The latest skirmish is over Bill C-234. It began in February of 2022 as a private members bill proposed by Ontario Conservative MP Ben Lobb.  While 97% of the fuels used by farmers (for tractors, trucks, combines, etc)  are already exempt from the carbon tax, this bill would also exclude the tax on propane and natural gas used for drying grain and heating buildings.  It was supported by all Conservative MPs and also NDP, Green, Bloc, and interestingly  3 Liberal members-  2 from PEI -  Heath MacDonald and Robert Morrissey, and Kody Blois from Nova Scotia.  The 3 Liberals all come from rural ridings. Widespread support like this for an energy policy is unheard of.

The Bill went on to the Senate for final approval and that’s where more political drama played out.  A Quebec based Senator Pierre Dalphond proposed an amendment that would keep the exemption on grain and crop drying, but maintain the carbon tax on heating buildings.  For farm groups this was nothing but obstruction.  Dave Carey the co-chair of the Agriculture Carbon Alliance told the Senate agriculture committee the tax is a “significant financial burden on producers… that there are no viable alternatives” for heating and cooling livestock barns and greenhouses, or for grain drying.

The Senate came close to passing the Bill without any amendments but each time there were procedural delays. The Liberal government says their senators are independent but there’s little doubt they are doing what they can to prevent this Bill as it was originally written from becoming law.  Their argument is that new tax credits have taken the sting out of any carbon tax paid by most farms. But there’s something else at play here: the overheated response to the government’s plan for a 3 year suspension of the carbon tax for homeowners using heating oil.

I’ve written elsewhere that this suspension coupled with financial help to add heat pumps to homes burning furnace oil is sound policy to fight climate change, and the cost of living crisis faced by so many rural Canadians especially in Atlantic Canada.  The Conservatives of course smell blood.  It’s political mantra “Axe the Tax” had claimed its first trophy.  It’s evidence they say that an unpopular government is retreating on its signature climate policy just to bolster its popularity in this region.  The media piled on calling it a carve out, and have now made the Senate vote on farm energy use the test of the government’s resolve, and whether Environment Minister Steven Guilbeault can even continue in his job.

This is all politics writ large and the media is just as much to blame.  The silliest thing I saw was a survey asking Canadians if they think the carbon tax should come off what they’re using to heat their homes as well. You don’t need Captain Obvious to tell you the answer to that. People are struggling. Anything that can cut the cost of living would be welcome. What makes the furnace oil/heat pump policy different is that you’re replacing by far the dirtiest and costliest heating fuel with new technology. It’s a much more proven method of lowering greenhouse gas production than carbon capture which the federal government is also heavily invested in. No one is condemning the Liberals for that.

And there are other warning signs that language and politics are endangering efforts to fight climate change.  There are reports from Germany that in some circles heat pumps are becoming what masks were through the Covid pandemic: a sign of government over-reach challenging individual freedom. Reporting for Politico just before German elections in October Karl Mathiesen wrote  “The heat pump, a banal piece of green home technology, was at the centre of Germany’s major political controversy of the summer — one that has helped propel the far-right Alternative for Germany (AfD) to the brink of a series of electoral breakthroughs…. When they write the book on the downfall of liberal democracy, will it begin with the heat pump?”  Yikes.

Make Bill C-234 law without amendments because farmers have no ability pass on additional costs and Canada needs to promote the food security that greenhouse production can provide.  It’s not another “carve out”. It’s the will of Parliament. It’s the right thing to do.

Politically Crass and Opportunistic, But Still the Right Decision 

I often wonder if Stephen Harper had proposed a “carbon tax” would we be having a less cynical discussion right now. The tax is dead centre in the heart of true Conservative orthodoxy, that market based decisions by individuals rather than government regulations are the best way to change behaviour and efficiently manage an economy. But no. Conservatives everywhere smell blood and will instead promise to “Axe the tax.” Replaced with what? Who knows. 

Yes the Liberals desperately need a win in Atlantic Canada to just possibly prevent an electoral slaughter in the next election. Beyond politics however there’s been a lot missing in the recent discussion. 

Steep inflation, a cost of living crisis, were never considered when the carbon tax was introduced. The market mechanism works when people with disposable incomes are encouraged to make better choices to meet important climate goals. In a reasonably humane country the carbon tax should not overtly punish or harm low income rural Canadians dependent on furnace oil, but that’s what it was doing. 

Despite the fact that the carbon tax suspension applies to all Canadians using furnace oil, there is a disproportionately large number of people in that situation in Atlantic Canada. 

There’s more. Furnace oil is the dirtiest of all fuels used for heating. And some important research by CBC Charlottetown reporter Kerry Campbell has revealed that it’s also the most expensive. Campbell discovered that to produce a unit of heat (a gigajoule) on PEI costs just over $47. The same heat unit in Saskatchewan using natural gas is just over $12. Yes Saskatchewan winters are colder but the carbon tax on this cleaner fuel is also less. 

The other part of the recent announcement (and what makes it more than just a crass political play) is a plan to help middle and low income Canadians using furnace oil to include heat pumps to warm their homes. To me this is what makes it more than just a give away to potential Liberal voters, or an inexcusable break with a plan to fight climate change. You’re replacing the dirtiest and most expensive fuel with a better technology. Period. And despite what’s been argued on some of the smartest political shows like Curse of Politics, and The Line, heat pumps are much more robust than they were just a few years ago, and capable of heating at very low temperatures. Do they completely replace an oil furnace everywhere? Of course not, but the amount of dirty furnace oil that gets burnt will plummet. And that matters. 

What about the cost of these heat pumps? Well the federal government is putting money into other technologies with similar aims to reduce carbon that have nothing to do with Atlantic Canada. Carbon capture is the most obvious. Is that a play to win seats in Alberta? (won’t work I know, and there is that certain pipeline nearing completion.) 

I think the most discouraging thing I’ve read or heard on this was from New Brunswick premier Blaine Higgs. He represents tens of thousands of rural New Brunswickers who will benefit from this, but his response was just the new Conservative mantra “Axe the tax” for everyone. Why? He told Catherine Cullen of CBC’s the House that Canada produces less than 2% of the world’s greenhouse gas production so what’s the point. It simply won’t change anything. If that’s the climate change strategy that Pierre Poilievre brings to the next election, and Canadians buy it, then Higgs is right. What’s the point.