A coalition of
agricultural trade groups in Canada is calling on the Canadian government to
reimburse farmers who paid an estimated C$34.1 million in tariffs on fertilizers
sourced last spring from Russia and Belarus.
The federal government
in March implemented
a 35% tariff on virtually all imported goods from Russia and Belarus that were
not in transit prior to March 2, 2022 (GM
March 18, p. 1). The tariffs were part of Canada’s decision to withdraw
the most-favored-nation status to Russia and Belarus as trading partners in the
wake of Russia’s invasion of Ukraine.
Canada
was the only G7 nation to impose a tariff, which hit the Eastern Canada
fertilizer industry particularly hard. Industry participants told Green Markets that as much as 25% of
phosphate fertilizers and 55% of nitrogen fertilizer used in Eastern Canada
comes from Russia, mostly in the form of urea, UAN, and MAP.
As of the end of the fertilizer reporting year on June 30, 2022, the Canadian government had collected C$34.1 million in tariffs on fertilizer from Russia and Belarus, according to Finance Canada. RealAgriculture reported that the finance department said the duties were collected on fertilizer imports worth C$97.5 million, while C$75.5 million in fertilizer imports did not have customs duties applied as these shipments were already in-transit when the tariff took effect.
In a Dec. 21 statement, the Atlantic Grains Council,
Christian Farmers Federation of Ontario, Grain Farmers of Ontario, Grain
Growers of Quebec, and Ontario Bean Growers called on the federal government to
send that C$34.1 million back to the farmers who paid it.
“The tariff funds
collected from farmers should not be a cost that is borne by those growing and
providing everyone’s food,” the statement said. “Farmers can provide information on
the tariff monies they paid and can be reimbursed directly.”
The trade groups said they have been working as a coalition for months to “raise awareness of the challenges Canada’s decision to impose tariffs on Russian fertilizer imports has created for Canadian farmers.” The groups stressed that “Canadian farmers stand with the people of Ukraine,” but questioned why Canada is the “only G7 nation asking its farmers to pay for tariff retaliation that doesn’t hurt Russia.”
“The UN is asking
countries not to impose barriers to fertilizer trade to avert a global food
crisis, yet Canada – a global grain superpower the world needs in a time of
crisis – made its farmers pay a significant tariff, which they continue to
pay,” the statement concludes. “We await the government’s plan to reimburse
farmers directly for the tariff money paid on fertilizer.”
Earlier this month, the Canadian
government signaled its intention to forward C$115 million in expected tariff
revenues to Ukraine to help repair the country’s power grid. The announcement
was made by Deputy Prime Minister and Finance Minister Chrystia Freeland at a
Ukrainian solidarity conference in Paris.
“Putin
and his henchmen are war criminals, and they are attempting to use the cold as
a weapon to break the spirit of the remarkable people of Ukraine,” Freeland
said in a press release. “They will not succeed, and this support will help
ensure that Ukraine can secure its energy infrastructure and make it through
the difficult winter to come.”
The federal government
is now considering options for that C$34.1 million, however, including a
mechanism to offset the costs borne by farmers, RealAgriculture reported this week. Freeland and Agriculture
Minister Marie-Claude Bibeau said an announcement will be made early in 2023,
but details of the plan were not revealed.
Citing multiple sources, RealAgriculture said the government is not considering direct
reimbursements to farmer due to difficulties in tracking which fertilizer
purchases were impacted by the tariff.
