At dawn on an early December day, egg farmer Kurt Siemens puts on his boots and heads to one of three poultry houses on his farm in Ronot, Man.
        He spends his mornings doing a range of housework and tending to 45,000 laying hens and chicks. Despite the unusually mild weather in late autumn, keeping chicks warm is one of Siemens’ top priorities. This was critical not only to their survival, but also to his livelihood.
        Siemens is the third generation of the family to run the farm since 1963. His son Harley represents the fourth generation.
       In addition to two chicken coops for laying hens, Siemens also has a third chicken coop where pullets (called pullets) are raised until they reach laying age.
       The family received a shipment of chicks more than 20,000 days old in mid-November and had to keep them warm for four to five months before they could place them with other birds.
        Siemens read out the October heating bill figures over the phone. Natural gas costs about $2,000; a third of this amount (about US$600) is a carbon fee. According to Siemens, “it’s not even a bad month.” With 20,000 chickens and 36,000 square feet of barn to heat for the winter, he expects his bills to skyrocket.
        “Because we are an independent operation, we tend to use a lot of heat in the barns,” Siemens said. “But most of the gas we use comes from poultry houses. They need to keep the chicks at about 37 degrees Celsius because they are too small to generate their own heat.”
        Farmers like Siemens have been asking the federal government for more carbon pricing incentives for years. Fruit and vegetable producers already receive carbon tax breaks: 80% of natural gas and propane used to heat greenhouses are exempt. Diesel fuel and gasoline used in agricultural machinery are also exempt from the tax. Like other Canadian taxpayers, farmers can also receive rebates.
        But farmers are increasingly pushing for another exception: natural gas and propane used on farms. Their latest initiative comes in the form of Private Members’ Bill C234, introduced in February 2022. The bill offers an eight-year waiver of carbon pricing when both fuels are used for critical agricultural tasks such as drying grain and heating barns.
        But because carbon price waivers are a controversial and sometimes partisan issue across the country, some lawmakers and environmental experts say the waiver would open the door for polluting businesses to get relief from their own carbon fees. carbon emissions. Some fear it will cause a deadly erosion of the federal government’s environmental policy framework.
        Farmers, on the other hand, believe that carbon pricing prevents them from investing in emissions-reducing upgrades. Farmers say they are stewards of the land, but with few options to replace dirty fuels used in farm machinery, they believe rising carbon costs are harming the agriculture sector’s ability to remain competitive and spur innovation.
        No one can agree on an average price for carbon emissions on Canadian farms. Scott Ross, co-chair of the Agricultural Carbon Alliance, which represents more than 190,000 farms, said part of the reason is “it’s just not realistic for the average farm.”
       In a highly diverse industry that produces many products in different weather conditions and with varying infrastructure uses, each farm’s fuel needs and carbon costs can vary greatly.
        Over the past 20 years, Canadian farms have grown in size and become smaller in number as small and medium-sized family farms have merged into larger operations. The average Canadian farm size in 2021 was 809 acres, down from 676 acres in 2001, with the number of farms down more than 20%.
       Agricultural emissions from increasingly large agricultural operations account for about 10% of Canada’s total greenhouse gas pollution, and the industry’s emissions in 2021 are up about 8% from 2005, according to Environment and Climate Change Canada.
        Most of agriculture’s emissions can be attributed to “biological processes inherent in livestock and crop production,” with fuel use accounting for about 20% of the sector’s carbon pollution, parliamentary budget officials said. 80% of these fuel emissions come from diesel and gasoline burned by agricultural equipment.
       While only a small portion of farm emissions is subject to a carbon tax, some producers say those costs are rising.
        The Saskatchewan Agricultural Producers Association estimates that a large 5,000-acre grain farm spends more than $10,000 a year on carbon pricing, or about 8 per cent of net farm income. In testimony before the House Agriculture Committee, one Alberta poultry farm said costs would exceed $100,000 by 2022. Mushroom growers need heat to grow their crops indoors year-round, which they say costs more than $150,000 a year. It is unclear how these costs are calculated.
        In 2019, when the carbon price was $20 per tonne of emissions, Manitoba reported to the federal government that farms paid an average of $311 to $467 in carbon fees for grain drying, equivalent to 0.1 per cent of operating costs. There has been no similar analysis of the carbon costs of home heating.
       As industry costs rise steadily, farmers are nearly unanimous in their hope that fuels used to heat barns and dry grain will be the next to get some relief from carbon prices.
       “Regardless of your politics or commodities, the goal of every farmer is to leave better land for the next generation,” Dave Carey, co-chair of the Agricultural Carbon Alliance, said in a video call from Ottawa.
       According to the Alliance, farmers by nature are efficiency conscious and strive to adopt technological innovations as quickly as possible.
       “In terms of the environmental document, our department has a very unified understanding of where we need to go and how to help shape and shape policy to support Canada’s climate change goals and ensure that our department’s competitiveness issues and pragmatic considerations are properly addressed and accounted for,” Ross said.
       “For on-farm food production, there are no viable, scalable alternatives that can work for any commodity from coast to coast other than natural gas or propane.”
        Carey said Bill C234 was “not a new idea.” This is a merger of two bills introduced before the last federal election.
        When a carbon pricing system was introduced in 2018 in the form of the Greenhouse Gas Pricing Act, it was recognized that farmers had few viable alternatives to gasoline and diesel. Thus, the use of this fuel on farms is tax-free. Natural gas and propane, considered “clean” fuels because they emit fewer emissions, are no exception.
        The previous bill, introduced in the fall of 2020 and called the “Grain Drying Act” by the coalition, actually provided an exemption only for grain dryers. Another bill introduced earlier that year would have exempted fuels used to heat and cool agricultural buildings from the tax.
        “[The Greenhouse Gas Pricing Act] is a huge piece of legislation, it’s new, it’s unique, it’s never been done before, so there’s oversight,” Carey said. “I don’t think there’s any malice involved, petrol and diesel are just the bottom line.”
        In response to the impact of carbon prices on farmers’ profits, the federal government introduced farm tax credits similar to large rebates for taxpayers. Farmers receive rebates on their tax returns based on their expenses, meaning larger farms typically receive larger rebates than smaller farms.
       Ross said the rebate was a “cruel instrument” that did not take into account how much carbon-intensive fuel each farm used, meaning many farmers would only get “a fraction of what they spent.”
        At the committee hearing, Miodrag Jovanovic, a senior director at Treasury Canada, estimated that by 2022, farms would pay C$100 million in carbon fees. The fees will be refunded to farmers “depending on the total amount spent,” he said. “The intent is not to give back what each farm paid.”
        In the Senate, the debate over the latest proposed exemption has turned into yet another weighing of the merits and demerits of Canada’s foundational environmental legislation. Senators narrowly voted on Tuesday to remove an exception to the shed heating proposal, which will be sent back to the House of Commons for further debate after the third reading.
        The bill was previously passed by the House of Commons with all-party support, but reached the Senate when the federal government introduced a carbon price exemption for residents using light fuel oil to heat their homes. The home heating tax exemption for heating oil has sparked a partisan fight, with several Conservative prime ministers calling for the exemption to be extended to natural gas used to heat homes, while the Liberals have taken a hard line on any further carbon pricing loopholes.
       Some of the bill’s most vocal opponents argue that it “has nothing to do with fairness for farmers and is instead a Trojan horse used by climate change deniers to cut taxes.”
        Testifying before the House Agriculture Committee, the David Suzuki Foundation said the bill would “send Canada down a slippery slope of sector-by-sector interest incentives that could fundamentally undermine [carbon pricing] as a whole.” -a saving measure.”
       British Columbia Senator Yuan Bao echoed that sentiment in late November, saying the bill “undermines the logic of pollution pricing and increases political pressure to abandon the regime.”
       Opponents of the exemption argue that eliminating a carbon price on all agricultural fuels would hamper efforts to develop less-polluting technologies for farms.
       National Farmers Union President Glenn Wright told the committee hearing that while he supports the grain drying fuel tax exemption, he believes further exemptions would “completely remove the pollution pricing signal.”
       “Complete exemptions will not help stimulate clean technologies and low-emission alternatives,” he added.
        Ross said he understands why the bill has become a political issue. Growing concerns across all political parties about the effectiveness of carbon pricing have led to greater caution in the analysis of any proposed exemptions. But he disagrees with the argument that farmers won’t push for emissions cuts without price signals.
       “The adoption of technology and innovation is truly critical to the past and future success of Canadian agriculture,” he said.
        Siemens cites its egg farm as an example. In 2017, before the carbon price came into effect, the family demolished the barns that had been on the property for decades and replaced them with three highly efficient chicken coops.
        The barn was equipped with a highly efficient stove and boiler. They installed underfloor heating, invested in insulation and replaced all lighting with energy-saving LEDs – all of which climate experts say will help reduce energy consumption on the farm. They considered installing a geothermal system, but decided it wasn’t worth the high upfront cost at the time.
        In addition to upgrading the barn, the Siemens family also implemented a new irrigation system to reduce waste; they began storing and drying manure for processing as fertilizer, and used digital tools to track and improve energy use; Harley Siemens rides a hybrid pickup truck.
        “We do sustainable things because we think it’s the right thing to do,” Siemens said. “Without a carbon tax, I would still be doing everything I could to be sustainable on my farm.”
        Jake Eyre, vice-president of Keystone Agricultural Producers in Manitoba, doesn’t have to think long to remember when climate change and carbon prices gave his family 3,500 acres of grain and seeds. The farm represents a double whammy.
       They call it “harvest hell”: In 2019, an early fall snowstorm hit crops, soaking fields and creating a dangerously soggy harvest.
        The farm, located near Minto, Manitou, about 250 kilometers southwest of Winnipeg, produces a variety of cash crops including wheat, barley, oats, corn, canola and soybeans. Too much moisture makes the grain susceptible to mold and rot, making it unsalable.
       “I remember mixing up the canola and looking in the can and realizing there were probably as many ice pellets as there were canola,” Al said with a laugh.
       “We had to dry half the grain that year and had no choice: we used a natural gas-powered grain dryer.”