AGRI Committee Report

Supplementary Opinion of the Conservative Party of Canada

Issues Relating to the Horticultural Sector

Introduction

The Conservative Party of Canada (CPC) greatly appreciates the work of the Committee and would like to thank the witnesses who participated and submitted briefs as part of the Committee’s study on Issues Relating to the Horticultural Sector.

We agree with the majority of the Committee’s report and recommendations but feel the need to address the deliberate omission of a recommendation relating to the carbon tax and its impact on the health and competitiveness of the horticultural sector in Canada.

Along with the Liberal government’s proposed pollution prevention planning notice (P2 notice) on primary food plastic packing, which would lead to a 35% increase in the cost of fresh produce for consumers, reduce the availability of fresh produce by 50%, cost the industry $5.6 billion and increase food waste by more than 50%,[1] if no measures are taken to reverse course on either policies, we risk jeopardizing the 185,400 jobs supported by the produce industry and the nearly $7 billion of farm gate value made possible by our fruit and vegetable producers.

Opposition to the Carbon Tax Hike

While the committee undertook this study the carbon tax was increased on agricultural producers including those in the horticulture sector by 23 per cent on April 1, 2024. In the lead up to that carbon tax increase, the committee received numerous letters from agricultural stakeholders regarding their opposition to the carbon tax hike[2], including letters from the Ontario Minister of Agriculture, Food and Rural Affairs[3], and the Saskatchewan Association of Rural Municipalities.[4] Efforts to report these letters to the House while it considers bill C-234 were obstructed by other parties on the committee.[5]

The Cost of Liberal Carbon Taxes on the Horticulture Sector

The government’s inflationary carbon tax impacts the cost of food since it is felt at every single point in the food supply chain. The Canadian Federation of Agriculture surveyed the impact of the carbon tax on livestock, crop production and greenhouse farms across Canada and found that the carbon tax accounted for up to 40% of total energy bills in some sectors.[6]

We heard that the carbon tax currently costs greenhouse operators in Canada $22 million a year and they’ll pay between $82 million and $100 million by 2030 when the carbon tax quadruples.[7] The share for operators in Ontario is over $18 million this year and over $40 million by 2030, which means over a 10-year period, Ontario greenhouse operators will have paid over $242 million in carbon taxes.[8]

We know 44% of fresh fruit and vegetables growers are already selling at a loss and 77% can’t offset production cost increases.[9] Mushroom farms will pay $7.2 million in carbon taxes this year and by 2030 they’ll pay more than $16 million.

A sample of 50 farm operations across Canada paid a total of $329,644 in carbon taxes in one-month last year, with the increase this year it’ll cost those farms $431,544 and nearly triple over the next seven years to $893,944[10].

Additionally, we confirmed that despite repeated claims by the Liberal government, farmers do not get back more in rebates than they pay in carbon taxes.[11] [12]

For these reasons we submit the following recommendation:

That the Government of Canada reverse the Senate’s decision to exclude the greenhouse sector from bill C-234 and pass the legislation in its original form and provide tax relief for horticultural producers.