Greenhouses to still get rebate with federal carbon tax

By COLLIN GALLANT on May 15, 2019.

NEWS FILE PHOTO
Albert Cramer, who operates Rolling Acres Greenhouses, says the province's phasing out of the property tax assessment on farm buildings will make urban greenhouses more competitive with their rural counterparts, but will also decrease municipal revenues.

cgallant@medicinehatnews.com@CollinGallant

Local greenhouse operators will continue to receive an 80 per cent exemption from carbon levy charges next month as the new Alberta government promises to cancel the fee on energy use, while Ottawa intends to replace it.

That provides some stability for the industry as the issue plays out at the interprovincial level and in court, says Albert Cramer, the president of Redhat Co-op as well as board member of the Canadian Horticultural Association.

“The federal program will kick in an they’ll have the 80 per cent (exemption), same as Alberta has, so it won’t change for the greenhouse industry,” said Cramer.

Premier Jason Kenney said this week that ending Alberta’s carbon tax will be a key priority when the new legislature convenes next week. After the conservative-dominated legislature votes, the phase-out date would be May 30, the UCP leader said.

That levy however, would bring a federal pricing system, and potentially risk an 80 per cent exemption developed specifically for greenhouse operators who complained in 2017 that such a tax without an exemption put them on a competitive disadvantage when selling out of province.

Several local operators told the News on Tuesday they see a complete end to the carbon pricing as the best result, even if their industry is mostly sheltered from extra costs.

They also hope other regulations brought in by the former NDP-led government are phased out as well.

“It’s an added expense that we didn’t need – and the cost of everything has gone up,” said Jeff Stigter, of Stigters Greenhouses in Redcliff, who claims that even with the 80 per cent rebate the charge added $6,000 to his heating costs in February, the coldest month of the year.

He is also hopeful the new government addresses changes to labour laws that reclassified the industry as manufacturing and therefore relaxed some standards of agricultural workers.

Four provinces that have no localized carbon pricing program had the federal system imposed on April 1, with a different rebate program and exemptions. Cramer however, said lobbying by the Canadian Horticultural Association, led Ottawa to consider the 80 per cent rebate in Alberta and B.C. as a way to flatten the extra cost across the country.

“Natural gas has been fairly cheap lately, so the carbon tax is higher than the actual gas bill,” said Cramer. “It still costs 20 per cent. At this point, that’s not a huge concern, and if we kept the rebate, we’d be happy with that. Of course it’s set to rise to $50 (per tonne), and if we had to take the entire hit, it would be too much.”

The Alberta price is currently $30 per tonne, equal to about $1.51 on a gigajoule of gas, while the federal price is $20, but rising to $30 next January and $50 by 2022.

The UCP campaigned heavily on ending the levy and opposing the federal levy in court. The New Democrats said the fact Alberta developed its own program meant greater local control of how funds would be spent, either as grants to reduce emissions or on rebates.

When the Alberta levy came into force in early 2017, the province provided an 80 per cent rebate as a response to growers’ concerns that a similar program in British Columbia, where a price has been in place for a decades, would put local growers at a disadvantage.

Chinook Greenhouses, on Bridge Street in Medicine Hat, produces about 12 million saplings each year that are destined for reforestation projects.

“I personally feel that we shouldn’t be taxed on carbon at all, considering that we’re a user of carbon,” said Carson Pancoast, a part-owner in the company. He estimated his firm’s current carbon levy exposure at about $12,000 per year after the twice yearly rebate is applied.

“That’s significant for an operation.”