Senator Black: For my clarity, and for the clarity of our colleagues, is agriculture a priority for your government? Yes or no.

Hon. Robert Black: My question is for the Government Representative in the Senate. Senator Gold, Canada’s farmland remains a finite and valuable resource for Canadians and the world. Despite your government repeatedly stating the importance and prioritization of agriculture and food security, I remain perplexed by the agreements and policies that we continue to see which undermine the capabilities and capacities of our processors and producers.

In a recent deal, a foreign company was given the green light for the procurement of 1,500 acres — the equivalent of 1,134 football fields — of prime agricultural land in southern Ontario. Around this deal was $700 million from Ottawa to build a plant along with $500 million from the Ontario government, plus $13 billion in federal subsidies for this gigafactory. Let’s not forget as well, colleagues, the $34 million in tariffs taken from farmers’ fertilizer purchases earlier this year, an essential product needed to feed the country and the world, which was not returned to our farmers.

While the province retains jurisdiction of land use planning, governments at all levels have permitted the land that grows our food to be swallowed up by urban sprawl, damaging valuable soils and reducing our food production capacities, all while subsidizing this destruction and financially limiting those who put food on our tables.

My question is this, Senator Gold: When will this government actually prioritize Canadian agriculture and food, stop financially depriving our farmers and stop giving monies to companies that will actively undermine and take away our crucial farmlands?

Hon. Robert Black: Honourable senators, I rise today in the chamber of sober second thought to speak to Bill C-234, an Act to Amend the Greenhouse Gas Pollution Pricing Act, sponsored by Senator Wells. Thank you, Senator Wells, for your remarks and for answering all those questions.

Bill C-234 is an essential piece of legislation aiming to support our farmers. As an AGvocate, I am proud to stand here before you, and I will continue to do so going forward, to support our Canadian agricultural industry.

Before I dive into the specifics of the bill, I want to take a moment to emphasize the importance of Canadian agriculture. Our farmers work tirelessly to produce the food that feeds our nation and the world and they are facing increasingly challenging circumstances. Climate change, labour shortages, trade disruptions and the lasting effects of COVID-19 pandemic have taken a toll on our agricultural sector. As a nation, we must do everything in our power to support our farmers to ensure they can continue to thrive in the face of those significant challenges.

That brings me to Bill C-234.

The purpose of this bill is to amend the Greenhouse Gas Pollution Pricing Act to provide relief to farmers who are struggling under the burden of the carbon tax that was implemented in 2019. It imposes a price on greenhouse gas emissions in an effort to reduce Canada’s carbon footprint and meet our international climate change commitments. However, the tax has been a source of frustration and financial hardship for many Canadians, especially those in the agricultural sector who are already facing high costs and ever-narrowing profit margins.

Previous speeches and evidence provided in the other place regarding the carbon tax have highlighted the negative effects and impacts it has had on Canadian farmers. A 2020 report by the Standing Committee on Agriculture and Agri-Food suggests that the tax is increasing input costs for farmers, reducing their competitiveness and discouraging investment in new technology and infrastructure. The report also noted that the carbon tax is disproportionately affecting farmers in certain regions of the country, such as the Prairies, where the cost of transportation is higher, and the weather and temperatures are more diverse.

Another study by the Canadian Federation of Independent Business found that the carbon tax is costing farmers an average of $14,000 per year. That is a significant burden for many farming businesses that are already struggling to make ends meet. That study also found that the carbon tax is hindering the growth and development of the agricultural sector, which is a crucial component of our Canadian economy.

It is clear that the carbon tax is having a negative impact on Canadian farmers and that something needs to be done to address the issue. Bill C-234 offers a practical solution that would provide relief to farmers without compromising our environmental goals. The bill proposes to exempt fuels used for farming from the carbon tax for necessities like barn heating and grain drying. This exemption would have a significantly positive impact on Canadian agriculture. It would reduce input costs for farmers, making it easier for them to invest in new technology and infrastructure that will improve their efficiency and competitiveness over time.

It would also encourage the growth and development of the agricultural sector, which is an essential component of our country’s economic and social well-being.

Furthermore, the exemption would be in line with the government’s commitment to support small businesses and rural communities. By exempting fuels used in farming, the government would be acknowledging the unique challenges faced by those groups and be seen to be taking steps to address them.

There has also been discussion about the potential impact of the exemption on Canada’s climate change goals. However, this bill strikes an appropriate balance, in my mind, between supporting farmers and protecting our environment. It also includes measures to ensure that the exemption is being used appropriately by specifically naming which practices on the farm are to be included.

Furthermore, honourable senators, the bill was amended, and a sunset clause was added in the other place, as has been previously noted. Acknowledging that technological advancements will help the industry evolve further, the amended bill includes measures to ensure that the exemption will expire in eight years.

Colleagues, we all know that, with great innovation, Canada and the world might some day no longer be dependent upon fossil fuels, but until that time comes, they cannot pass the price of carbon onto those who put food on our tables.

As the MP for Huron—Bruce in the other place noted in the Agriculture and Agri-Food Committee hearings, farmers are price-takers, not price-makers; they are subject to the impacts of the market, the same as everyone else. Farmers and processors must remain competitive in Canada’s economy, and the carbon tax disproportionately affects them as stewards of the land and an essential part of this country.

As well, the sector plays a crucial role in the maintenance of Canada’s environment. Many farmers actively use carbon sequestration methods already to improve their farmlands. We are hearing about that during the Senate Agriculture Committee soil study. And yet we continue to look at the carbon footprint of the sector only, not to the contributions that farmers and producers make to return and sequester that carbon and contribute to climate change mitigation.

I would also like to mention that this is not the first time we have seen this bill. As we have heard, there were similar ones in the past. Many attempts have been made in both our chambers to provide relief for farmers from the carbon tax. Bill S-215 was tabled by our colleague the now-retired Honourable Diane Griffin here in the chamber in 2019, as we heard. That bill would have given provisions to the commercial drying as well, and it would have extended broadly to farmers and the entire sector.

In a 2021 brief submitted to the House Standing Committee on Agriculture and Agri-Food, the Grain Farmers of Ontario noted that in Ontario, combined crop propane and natural gas drying costs were $120 million in 2019, almost double a typical year’s cost of $63 million. In 2021, the carbon tax added an estimated 22% to the cost of drying grain, and this will continue to rise dramatically to 2030, when the cost of the carbon tax alone will reach 92% of the current value of the fuel used to dry the crop.

Another similar bill, Bill C-206, was introduced in the other place in 2020 by MP Philip Lawrence from Northumberland—Peterborough South, who stated in his chamber that the carbon tax is not neutral for farmers.

While that comment has been and can be disputed — and is highly debated — what is not in dispute for the agricultural sector is that it is not revenue-neutral. Their prices are not set by themselves but rather by companies, governments and international markets. They cannot just push that cost along. It is coming directly out of the pockets of our farmers, and that is money they could be using to reinvest in their farms, invest in clean technologies and help support their families.

That is the idea behind Bill C-234.

In the Standing Senate Committee on Agriculture and Forestry, we are hearing testimony that many in the agricultural sector are already participants in the fight against climate change. They are finding carbon-reducing strategies and innovative and new ways to produce food for Canada and for the world.

For example, carbon waste is being used to generate biofuels through the construction of things like biodigesters — anaerobic digesters. Farmers are progressive, determined and interested in engaging in innovative and new technologies for the advancement of the industry.

This bill, honourable colleagues, represents a consensus of interests. Advocates from across the agriculture sector understand the need for this bill. The bill provides a great opportunity to improve and change fiscal policy that has hindered Canadian farmers and producers to date.

However, the bill is not perfect. Recently, I received a letter from the Ontario Agri Business Association that notes that many farmers in different provinces will be affected disproportionately by Bill C-234. For example:

 . . . approximately two-thirds of the corn grown in the province (by volume) is dried at commercial grain elevators . . . .

As Bill C-234 is currently structured, it has the unintended result of creating a significant cost of production imbalance amongst Ontario farmers due to the proposed exemption being exclusive to those farm operations that have on-farm drying capacity and no carbon tax relief for those farmers that make the business decision to dry their grain at one of the 357 commercial elevators located throughout the province.

Colleagues, the quote continues:

When grain is dried at commercial elevators in Ontario it is still owned by the farmer who produced it.

The commercial elevator provides the farmer an invoice for the propane or natural gas used to dry their grain to an agreed upon moisture level, prior to it being placed in storage or utilized by an end user.

The administrative process is very similar to when a farmer is invoiced for either natural gas or propane by the fuel supply company prior to it being utilized to dry grain on‑farm.

This is far different for those from Alberta, the letter goes on to note, where a significantly higher portion of farmers have on‑farm drying capacities.

Honourable colleagues, I would also like to bring attention to a concern discussed in the other place that I know will be and has been touched on throughout debate on this bill. If Bill C-234 passes, then farmers may be able to double-dip due to provisions in Bill C-8, the Economic and Fiscal Update Implementation Act passed in June 2022. The concern was raised that farmers would be able to benefit from the climate action incentive payment as well as from exemptions provided by Bill C-234.

Honourable senators, discussion took place in the Agriculture and Agri-Food Committee on this issue — a committee that holds a government majority with 6 out of the 12 seats. So if the government had any concerns about potential double-dipping, they had plenty of time and opportunity to amend the bill by their democratically elected majority on the committee. However, no action was taken beyond the discussion. With Bill C-234 now in our chamber, it is our opportunity to show support for our farmers so that the industry can continue to do what they do best: feed Canada and feed the world.

I want to be clear: The bill is not perfect, but I believe we need to work diligently to pass this bill as soon as possible before we rise for the summer recess. Our farmers need this relief now for this coming fall’s harvest and for future planning. If it is necessary, amendments can be made at a later time to make it better, as has been noted. Maybe they will even consider extending this provision to other sectors within agriculture, but that’s a discussion for another time.

Although Bill C-234 has space for improvement, honourable senators, we cannot overlook the opportunity this gives Canada’s agricultural industry. This bill has been supported by elected members from every party in the other place while acknowledging that it’s a building block upon which all of us as advocates can continue to improve in order to provide financial relief for farmers who are continually facing mounting pressures and increased costs.

To conclude, honourable senators, farmers understand the importance of innovation and progressiveness in their fight against climate change, but this cannot be done by limiting their fiscal capacity and forcing them to bear the burden of unfair tax on their livelihoods.

I’d like to thank my honourable colleagues for listening to me today and for continuing to support Canadian agriculture. I do hope you’ll join me in supporting this bill and passing it through all stages in this place as quickly as possible. It remains essential to the continued growth of Canada’s agricultural sector and to the Canadian economy.

Farmers want to continue to feed Canada and the world. Let’s not tie their hands while they do it. Thank you, meegwetch.

(On motion of Senator Dalphond, debate adjourned.)

On the Order:

Resuming debate on the inquiry of the Honourable Senator Boyer, calling the attention of the Senate to the positive contributions and impacts that Métis, Inuit, and First Nations have made to Canada, and the world.