Question Period Note: Grain Drying

What is the Government doing to help address the issue of increased grain drying costs and the associated carbon tax?

1. Farming families are important drivers of the Canadian economy and the competitiveness of the sector is a key priority of this government.

2. Poor weather conditions during this year’s harvest have caused producers in many regions of the country to dry a record amount of grain.

3. Farmers have expressed concerns about higher fuel costs and impacts of the federal carbon pollution pricing system. I have asked industry, as well as provincial and territorial governments, for more information on these costs so I can more fully understand the situation on the ground.

4. I am currently working with my colleagues and with our provincial partners to refine our understanding of the situation.

This year’s unusually wet conditions caused a difficult harvest season in many parts of Canada. Heavy, early snow affected a large portion of the crops in the Prairies, while cold and wet fall temperatures affected crops in Ontario. As a result, farmers are relying heavily on grain drying. Recent media coverage has highlighted situations in the Prairies and Ontario where farmers are reporting higher than average grain drying and carbon pricing bills.

Grain drying is considered a normal farm operation expense; used to lower crop moisture content to protect its quality. Grain dryers come in a wide array of sizes, configurations, energy efficiency levels and costs, usually using natural gas, propane or electricity as heating fuel. Total grain drying expenses incurred by a farm will vary from harvest to harvest, depending on the type and variety of crop, as well as the weather over a given growing season.

The newly-implemented federal carbon pollution pricing system includes relief for farm activities that represents a significant part of the total cost of production that would otherwise impact their competitiveness. Thus, gasoline and diesel fuel used by farmers for agricultural activities is exempt from the fuel charge, and biological emissions (e.g. from livestock, manure and fertilizer application) are not priced. Recognizing that greenhouse heating fuel consumption for year-round operations represents a significant cost of production, the system also provides significant relief of 80% for natural gas and propane used by commercial greenhouse operators. Natural gas and propane used for heating, for barns and grain drying, is not exempted under the federal fuel charge as it was not considered a significant cost of production for an average grains and oilseeds farm.

Agriculture and Agri-Food Canada (AAFC) is seeking more details from producer groups on estimates of grain drying and associated carbon tax costs. AAFC has received data from Alberta, the Agricultural Producers Association of Saskatchewan (APAS), the Keystone Agricultural Producers (KAP), and the Grain Farmers of Ontario (GFO). AAFC has engaged with the provincial governments of Alberta, Saskatchewan, Manitoba and Ontario.

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