Exemption or subsidy?

Thursday, January 28, 2016

by BETTER FARMING STAFF

Dianne Saxe, the new environmental commissioner of Ontario, says her remarks published earlier this month and widely regarded in rural Ontario as an attack on a tax exemption on coloured diesel fuel for agriculture, were reported inaccurately.

A column published in the National Post on Jan. 12 “was not accurate. It’s not what I said,” Saxe said in an interview on Friday.

She says her comments were in response to a question about what she learned when she was at the international climate change conference in Paris in December. “One of the big messages that the world governments agreed on in Paris is that fossil fuel subsidies prevent us from having a level playing field. (The National Post writer) asked me if we had any in Ontario,” and she mentioned the coloured diesel exemption.

Farm leaders such as Ontario Federation of Agriculture president Don McCabe have forcefully argued that the exemption from the road tax of which Saxe speaks is not a subsidy. It’s an exemption for farm machinery fuel from a tax that is in place to support road maintenance. The coloured fuel can also be used to fuel construction machinery and diesel engines that run generators.

Saxe stands by her use of the term ‘subsidy,’ which she attributes to the OECD (Organization of Economically Developed Countries) definition.

“By the international definition, (of a subsidy) a change in a rate of tax is a subsidy,” Saxe asserts. “It is not a moral judgement.”

The OECD says there are $1 trillion worth of subsidies worldwide applied to produce and use fossil fuels.

Saxe says according to the Ontario Ministry of Finance, the tax exemption on coloured diesel costs the province $215 million in revenue annually and agriculture benefits by $18 million.

“Two hundred and fifteen million dollars is a lot of money. Is the best way to support farming to give the most money to the people who use the most fossil fuels and the least money to the people who use the least fossil?” she says. “It’s possible there are better ways. It’s 87 per cent not about farming anyway.”

She doubts that the “fossil subsidies” will go away easily. “You don’t get to a trillion dollars in subsidies over the years without there being lots of political support for the subsidies … Our Prime Minister is committed to having this conversation. This is a conversation the whole world is having.”

“Governments around the world now have to ask the question about all the subsidies that they have for fossil fuels. Why do we have it, could we do better?”

In another recent interview on TVO (TV Ontario), Saxe had said that the previous environmental commissioner’s office had put forward the plan that the province adopted as its controversial plan to reduce neonicotinoid use.

“The environmental commissioner’s office is absolutely committed to making recommendations based on good science,” Saxe said Friday. She says she was “not involved” in “the specifics of the neonic report,” which was prepared when former commissioner Gord Miller was in charge.

“I haven’t been briefed on it yet so I can’t make any comment.”

Saxe says the commissioner’s central function is to be the guardian of the province’s Environmental Bill of Rights and to monitor, evaluate and report to the Legislature and to the public on government progress towards its targets on energy conservation, environmental protection and climate. Saxe adds there is a statutory requirement to produce at least one report annually on each of those three areas and there may be more reports as well. But don’t expect her to weigh in on every environmental issue. There are “lots and lots of issues” that the commission doesn’t have time to touch.

Saxe says it’s wrong to say the commissioner is appointed by the current government. “We are appointed unanimously by the three parties.” A representative from each party and the speaker do the selection and it has to be unanimous. “My duty is not to the government; it is to the Legislature and to all of the MPPs.

“We want to be as helpful to the MPPs as we can.”

Saxe expects to tour southwestern Ontario with OFA president McCabe in February.  She says visiting greenhouses and farms is familiar territory even though the law practice she just gave up to be environmental commissioner was located in downtown Toronto.  “It is mostly the type of operations I worked for when I was private practice.” BF