Saskatchewan officially drops its industrial carbon tax - much to the delight of farmers

WATCH: In addition to the consumer carbon tax being removed – the tax for big industries and farmers will also be reduced. Sierra D’Souza Butts reports.

Saskatchewan farmers and businesses will no longer pay the industrial carbon tax rate beginning April 1.

The provincial government has paused the rate for families, farms, businesses and other producers under its Output-Based Performance Standards (OBPS) Program.

Premier Scott Moe originally made the announcement on March 26 - and now that decision is a reality.

The province’s move comes alongside the federal government’s decision to drop the consumer carbon tax. Both changes took effect Tuesday.

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The Agricultural Producers Association of Saskatchewan (APAS) said they are relieved with the province’s decision.

“It’s encouraging. I think we we’ve been pretty vocal opposing it right from the beginning,” said Chris Procyk, APAS’s vice-president.

“Finally, it feels like your message is heard and the numbers have borne fruit that this is an unrealistic tax.”

Procyk went on to explain how the tax has negatively impacted farmers since being introduced in 2019.

“Saskatchewan producers have been carrying that cost all these years,” he said. “Any shipping of products - again that cost has gone up, the manufacturer, the cost has gone up. Just pure economics says that the cost of goods to me as a producer would be going up as well.”

Chad Zavislak, a cropping consultant who works near Yorkton, also explained the financial pressures the industrial carbon tax put on producers and ranchers with larger operations as opposed to smaller family farms.

“It’s not uncommon to be using large quantities of fuel and heating products like natural gas, propane, stuff like that,” he said.

“It’s just the volume used to produce a raw product. Then we have to be able to use something that’s using fuel to transport it off of our farm to the market. [The tax] was almost like a compounding effect.”

Although questions remain over the possibility of a federal backstop on the industrial tax, Zavislak said future climate policies should work closely with producers and the agriculture sector going forward.

“If we do want to minimize our footprint on the environment, I think for the long term we have to hopefully learn from this and try to come up with different solutions.”

As the federal election campaign continues, Conservatives have vowed to remove the industrial tax - while the Liberals have said they will maintain the program in keeping with requirements for trading to regions such as the European Union.