Tariffs, drought and falling crop prices: What support Canadian producers want to see from the federal budget

Pumpjacks draw out oil and gas from well heads surrounded by Canola fields near Cremona, Alta., Monday, July 15, 2024. THE CANADIAN PRESS/Jeff McIntosh

Canadian canola producers believe a tariff-ending agreement with the Chinese government would be the best relief the federal government could offer them.

In the months leading up to November’s federal budget, Ottawa announced measures to help stabilize the agriculture sector, including $370 million for a new biofuel production incentive and $75 million to help promote Canadian agri-food products in other international markets.

The federal government is also temporarily increasing the amount farmers can receive in interest-free advances.

“While that’s appreciated, farmers shouldn’t have to borrow their way out of this trade dispute,” said Saskatchewan canola producer Dean Roberts.

Roberts, who is also the chair of Sask Oilseeds, farms in west-central Saskatchewan.

On the heels of this fall’s harvest, farmers like Roberts are already planning for next year’s crop.

October is one of the busiest months of the year for him. He’s spraying fall herbicides before the snow falls, looking at fertilizer purchases and booking seed sales – all in preparation for next year’s crops. Except this year, the task is much more challenging.

“Any time your second largest market is in jeopardy, you start asking questions about how much of that crop should I invest in for next year,” Roberts told CTV News.

China imposed a 100 per cent tariff on Canadian canola oil and meal in March and a 75.8 per cent tariff on canola seed in August. Industry experts say the move effectively closed the market to Canada.

Canola makes up 25 per cent of Roberts’ crops, and he said about a quarter of his canola goes to China. He’s looking at ways to change the amount of canola he plants next year without messing up his other plans.

“We grow a multi-crop rotation with pulses and cereals to maintain our soil health and the sustainability of our farms,” he said. “Making a change away from canola this year could impact my rotation for years into the future.”

In 2024, Canada exported $4.9 billion of canola products to China.

Canola prices have taken a hit since China first announced the tariffs that are seen as a retaliatory measure against Canada’s 100 per cent tariff placed on Chinese electric vehicles last year.

“We’re taking economic losses now with the tariffs in this trade environment, and the longer that goes on, the greater the losses get to be,” Roberts said.

The canola industry contributed $43 billion to Canada’s economy last year.

Tracy Broughton, executive director with Sask Oilseeds, says the longer the tariffs last, the more the supports farms will need to maintain viability.

“Diversifying markets is a great opportunity that could be presented in the (federal) budget,” Broughton said. “But getting that (Chinese) market open is the top priority.”

“We want to see free, predictable, open trade, especially given that we’re an export-driven commodity.”

‘Not a lot to be positive about’

Canada’s canola producers aren’t the only ones falling on hard times.

Tyson Jacksteit grows lentils, wheat and durum in the southwest corner of Saskatchewan, where crops have been hit with drought for the last nine years. This year, he said, was probably the worst.

“Everyone’s doing their best trying to be positive, but it’s really tough. There’s not a lot to be positive about,” Jacksteit said.

“Lots (of farmers) are going to lose a ton of money this year.”

Crop insurance coverage is low for producers in the area due to consecutive claims over the last several drought years. Adding insult to injury, Jacksteit said crop prices are down across the board.

“Anything producers have grown is worth a lot less than it was one year ago,” he said, adding the prices of peas, wheat and durum have dropped.

“Everything is down, not just canola.”

The federal and provincial governments jointly offer income loss and risk management programs to farmers. However, Jacksteit said the programs give very little support to producers facing consecutive years of drought.

Instead, he’d like to see changes to crop insurance that ensure producers can at least recoup their production costs if a crop is written off, no matter how many claims they’ve made due to drought.