A professor and food policy expert is calling on Ottawa to temporarily suspend the carbon tax on “the entire food industry” beginning with farmers and food producers all the way up to the retail level.
“Nobody, including the Bank of Canada, understands how this policy could compromise Canada’s food security over time.”
He noted the uncertainty surrounding the long-term implications of the carbon tax on Canada’s ability to ensure a stable food supply.
“Up the food chain, from farms to processing, the gap between Canada’s Industrial Product Price Index and the United States Index is increasing, which means we could compromise Canada’s food security over time,” Dr. Charlebois said.
Conservative MP Lianne Rood echoed these concerns, citing the visible impact of the current carbon tax rate on gasoline prices.
“We are trying to find ways to lower the cost of food for Canadians but it seems this government’s policies and input costs are a huge part of the cost of food for producers,” said Ms. Rood at the committee hearing.
Dr. Charlebois also highlighted the inherent vulnerability of the sector due to the industry’s slender profit margins.
“We do have access to firm-level data that we can’t share unfortunately for obvious reasons,” he said. “But we do see some companies struggling a lot more because of the low margins.”
He added that the carbon tax “can have a huge impact on an industry where margins are incredibly slim.”
Canadian Federation of Agriculture president Keith Currie also testified at the committee about the sharp increase in operational costs faced by producers since the pandemic began. Mr. Currie noted a nearly 40 percent rise in expenses for machinery, fuel, fertilizer, and livestock feed since 2019.
The federal Conservatives introduced Bill C-234 last year to exempt farmers from paying the carbon tax on propane and natural gas used to heat or cool barns, or to dry grain. The Tories have argued that removing the carbon tax on farmers would help to lower food prices as Canadians continue to struggle with living costs.
The bill passed the House of Commons with support from Conservative, NDP, Bloc Quebecois, and Green Party MPs, with a few Liberals also voting in favour.
The bill was debated in the Senate as part of the third reading on Nov. 9, 2023 but before it could go on to receive Royal Assent and become law, a Liberal senator proposed amendments that removed the exemption for propane and natural gas and only kept the drying grain application.
The Senate also modified the bill in December, reducing the exemption period to three years and restricting it solely to the use of propane in grain drying processes.
Conservative MP Ben Lobb is advocating for the House of Commons to overturn these amendments. However, the Liberals intend to challenge this move, and the Bloc Quebecois might follow suit.
The debate over Mr. Lobb’s proposal could extend for weeks, leading to further discussions and votes in either the Senate or the House.
