By Patrick Meagher
TORONTO — Ontario’s new environmental commissioner Dianne Saxe says that her critics got it wrong. She is not calling for coloured diesel to run clear and drive up farmers’ fuel costs, but she does want the province to take a hard look at the long-running “subsidy.”
She is not calling for removing the tax exemption on farm diesel. She’s calling for an examination of that tax exemption.
Speaking with Farmers Forum she clarifies. Is the tax exemption for farm-used diesel “the best way to use public money to support farmers, based only on how much diesel fuel they use? It’s at least a question worth asking.”
Saxe, who took over as the environmental watchdog in December after a 40-year career as an environmental lawyer, also asks: “Are there better ways to use the same money to support agriculture? It’s not about taking money away from farmers but perhaps spending it smarter.”
She opens the door to the idea of decreasing or cutting the tax exemption but opening the door is not walking through it. She is not saying that the diesel tax exemption is a good idea but is questioning if it is good. One could easily interpret that as a nice way of saying, “should it be scrapped?”
She says her recent trip to the Paris climate change summit made her aware of why fossil fuel subsidies worldwide should be questioned.
In early January, farmers were up in arms when a National Post profile suggested Ontario’s coloured diesel exemption was a “sacred cow” that Saxe was prepared to “harpoon.” Diesel exempted from the 14.5-cent-per-litre provincial tax can be used in unplated farm vehicles but also unlicensed construction, forestry, and mining equipment.
Her questioning of the tax exemption or subsidy — not a judgment of its merits — didn’t come across clearly in the National Post article, Saxe tells Farmers Forum.
Of course, farmers can be forgiven for thinking the worst. What’s the point of questioning a subsidy if you can’t touch it? Suppose the government says: “Let’s take a hard look at tax credits for families. Can that subsidy for families be money better spent?”
Would families look at government as protector or predator? I think it’s safe to say that families would see themselves with bull’s-eyes on their backs.
Saxe stands by calling the diesel tax exemption a subsidy but says it’s a legal category used internationally to describe similar policies. “It’s not a moral judgment or a conclusion.”
It’s her job to evaluate if government policies are achieving their targets and countries around the world are starting to re-think similar fuel exemptions, she says. The exemption took $215 million out of provincial coffers last year. Agriculture’s share was only $28 million.
Diesel tax exemptions around the world were “adopted after the oil price shock in the 1970s or 1980s and they just continued on the books without ever being re-evaluated as to whether they’re still good public policy.”
We might never know if she thinks the diesel tax exemption is “still good” public policy. She doesn’t say. She is just asking the questions.
— Files by Brandy Harrison