There were no popped corks or champagne glasses, but farmers in Prince Albert and the surrounding area were celebrating the end of an era.
April 1 marked the first day without the Consumer Carbon Tax. Prime Minister Mark Carney reduced the tax rate to zero in his first act as Prime Minister on March 14, but the change didn’t come into effect until Monday.
Agricultural Producers Association of Saskatchewan (APAS) District Five Director Scott Hermus said the move was long overdue.
“(I’m) elated,” said Hermus, who farms in the Melfort area. “Ecstatic and elated. It’s awesome news.”
Under the Consumer Carbon Tax, producers paid an extra 17.6 cents per litre for gasoline and 15.25 cents per cubic metre for natural gas. When combined with carbon taxes in other areas, like power use, Hermus said the costs quickly added up for farmers.
In April 2024, APAS estimated the carbon tax cost producers an additional $7.24 per acre for a 62-bushel-per-acre crop. APAS estimated that number would have increased to $17.31 per acre by 2030.
Hermus said getting rid of the Carbon Tax is essential for keeping Saskatchewan’s agriculture sector competitive.
“We’re competing against other agriculture sectors that don’t have carbon taxes,” Hermus said. “We compete with the U.S. We compete with Europe. They don’t have to pay the same kind of taxes we do, so it will help.”
The provincial government followed Carney’s announcement with one of their own roughly two weeks later. On March 27, Premier Scott Moe announced a pause on the industrial carbon tax rate under its Output-Based Performance Standards. Hermus said that will provide further relief.
APAS has been a vocal critic of the carbon tax. The organization argued farmers faced significant cost increases for barn heating, grain drying, and electricity generation.
In 2023, APAS initially supported Bill C-234, which would have exempt carbon pricing for propane or natural gas used for barn heating and graining drying. The bill was amended twice in the senate to remove barns and greenhouses before being sent back to the House of Commons.
On Monday, APAS president Bill Prybylski said ending the Consumer Carbon Tax was “undoubtedly good news” for Saskatchewan farmers.
“Since 2019, the carbon tax has been digging into farmers’ pockets, threatening to increase costs by about $9 per acre this year alone,” Prybylski said in a press release. “Dropping this tax is more than just a relief; it’s necessary to ensure our farmers remain competitive.”
While farmers welcomed the news, both Hermus and Prybylski said they still face significant economic challenges. The biggest is the railway fuel surcharge. APAS estimates it will cost Saskatchewan farmers a combined $80 million this year. The organization has called for clarity to ensure those surcharges are removed.
“Everything we bring into the farm is hauled in on a truck, or a ship or a train. It’s all passed on to us,” Hermus said.
“As farmers, we are price takers. We can’t apply our expenses on to our price. We are completely market based so there’s no way for us to replenish that cost.”
Hermus said tariffs are also still a major concern. In addition to U.S. tariffs, China has introduced a 100 per cent tariff on canola in response to a Canadian tariff on Chinese-made electric vehicles, and a 25 per cent tariff on Chinese aluminum and steel products.
With seeding approaching, and so many challenges ahead, Hermus said he won’t be doing much celebrating.
“(It’s) back to work,” he said. “We have a lot of uncertainty in our industry right now with the upcoming ‘maybe tariffs, maybe not.’ The federal election is huge for us, so we’ll see which way that goes. We will be holding our cards tight. Just put the crop in the ground and hope for the best.”
SaskPower also stopped charging the Federal Carbon Tax on April 1. The change applies to all customers. The Crown Corporation expects farmers to save around $330/year on power.
