Budget 2021 promises to return some proceeds of carbon price to farmers

The federal government’s budget announced that it plans to return a portion of the proceeds of the federal price on carbon directly to farmers in the backstop jurisdictions of Alberta, Saskatchewan, Manitoba and Ontario for the 2021-22 year.

Todd Lewis, the president of the Agricultural Producers Association of Saskatchewan, said the budget mentions agriculture as one of the economic pillars in the country and he hopes the new programs will be helpful to producers.

“I think that was positive, there have been past budgets where agriculture isn’t even mentioned,” he explained. “There were a number of measures that will affect agriculture. It was short on details but it will be interesting to see how it’s all rolled out.”

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The federal government has allocated $100 million as a return to farmers due to the increase in production costs from carbon pricing. Lewis said he isn’t sure how the government is planning to do it.

“Will it be specifically for grain-drying propane and natural gas used for that activity? Will it go to livestock producers for natural gas to heat their barns? Or ranchers that use commercial truckers to ship their cattle?” he said. “Those are all examples of activities the carbon tax has impacted. It will be interesting to see what the overall program looks like when they do roll it out.”

The budget also promised money to continue funding the $165-million Agricultural Clean Technology program and will prioritize $50-million to help with the purchase of more fuel-efficient grain dryers for farmers across the country.

Lewis said this is a great incentive to help farmers transition to a lower-carbon, more fuel-efficient way of farming but grain dryers come with a big price tag.

“For producers that are in need of a new grain dryer, it could be helpful. Again, the details are pretty slim as to if it will be a percentage of the purchase,” he said. “Grain dryers are long-term investments. Time will tell as to how much money is actually put back to the farm.

“We just need to see some more details to see how much of an impact it’s going to have.”

More details about the program are expected later in 2021.