April 20, 2021

Bill C-206 Opening Remarks – Jonothan Hodson

Grain Growers of Canada

Opening Remarks to the Standing Committee on Agriculture and Agri-Food Regarding Bill C-206 – An Act to amend the Greenhouse Gas Pollution Act

Jonothan Hodson, Director, Grain Growers of Canada

Mr. Chair, Honourable members, thank you for the opportunity to appear before you today.

My name is Jonothan Hodson, and I am member of the Board of Directors of the Grain Growers of Canada. On that Board, I am a representative of the Manitoba Crop Alliance, a producer group representing Wheat, Barley, Corn, Sunflower, Flax and Winter Cereal growers across Manitoba.

I am joined today by the Grain Growers of Canada Executive Director, Erin Gowriluk.

I farm near Lenore, in Southwestern Manitoba. Our family farm is fifth-generation, and we have a diverse crop rotation of corn, spring wheat, barley, canola, soybeans, peas, forages, as well as a cow-calf operation.

I am here today to express our support for Bill C-206. This legislation would expand the existing exemption from the price on pollution for qualifying farm fuels to include propane and natural gas. The expansion of this exemption is critical to grain farmers, like me, because we often need to dry our grain prior to marketing it.

In yesterday’s budget, we were pleased to see the government’s intention to return a portion of carbon tax collected back to farmers in backstop jurisdictions – beginning in 2021-22, and we look forward to additional details.

However, we continue to support for the passage of Bill C-206, as it remains the most straight-forward, cost-efficient way of providing a full exemption for grain drying where no alternative fuel source exists.

As farmers, we are on the front lines of a changing climate and are increasingly feeling the impacts of wet harvests and early snowfall. When we experience a lot of moisture and unpredictable weather, we have no choice but to dry our grain to make it suitable for the markets that rely on us – both at home and abroad.

The reality is that putting grain with too high of a moisture level in the bin isn’t an option. It needs to be dried to the correct level, or I risk losing part of, if not the entire value of that product. When compounded by the rising carbon tax, this represents a real blow to the profitability of my farm.

A couple of years ago, we made a significant investment of over $100,000 to upgrade to a more efficient grain drying system. There were no programs available, so, just like many other farmers, we spent the money ourselves to improve our drying efficiency. If there were a grain dryer that ran off something other than fossil fuels, we would look at upgrading again, but that option just does not exist right now.

Each year, our farm spends between $15,000-$25,000 in propane to dry our grain. Of our total expenses, this is not the largest, but, as a necessity after harvest, money spent on drying my grain is money out of pocket. Each year that the carbon tax goes up, that is more money straight off my bottom line.

As a farmer, I am a price taker, not a price maker, and unlike other businesses, I cannot pass on these extra costs to the consumer. However, the increased costs of production for my inputs and equipment, and the rising rates for rail and road transportation do get passed on to me.

This legislation is not a one-size-fits-all fix for the increased cost that the carbon tax puts on us. However, it is an important recognition that the spirit behind the carbon tax cannot be achieved in this instance. The desired purpose of the price on pollution is to drive a transition to alternative fuel sources, but in the case of grain drying, there are simply no viable alternatives available.

There are other environmental considerations, beyond just taxing unavoidable emissions. Certain crops common across all of Canada, such as corn, are generally harvested with high moisture, and must be dried. Corn has become a valuable part of my crop rotation, which, in and of itself, is a critical tool in the environmental sustainability of our operation. Crop rotation provides many benefits, including improved soil health, reduced erosion, and disease prevention.If the costs of drying become too high and eat away at potential profits too much, that will be one less crop available for our rotation, and a potential loss of those environmental benefits.

We were very encouraged to see support for this legislation from the Bloc Quebecois, NDP, the Green Party and a number of Independent MPs. It is important to recognize that where the carbon tax is ineffective in its aim, that changes, like what are proposed in Bill C-206, should be made.

I hope that this legislation will receive unanimous support to pass through this Committee and be on a path to become law in time for this year’s harvest.

Thank you, Mr. Chair, I would be happy to answer any questions you may have.

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