Feds looking for ways to spend $34.1 million to offset impact of fertilizer tariff

The federal government is looking at options for how to spend $34.1 million to help farmers in Eastern Canada who have been affected by 35 per cent tariffs applied to fertilizer imports following Russia’s invasion of Ukraine in early 2022.

While the tariff proceeds have been committed by the Canadian government to restoring the power grid in Ukraine, Agriculture Minister Marie-Claude Bibeau and Finance Minister Chrystia Freeland are planning to announce $34.1 million — the equivalent to the government’s tariff revenues on fertilizer up until June 30 — to offset the impact of the tariff.

Bibeau says the government has “been in discussions for a few weeks now with various associations in Eastern Canada to determine the best mechanisms to reinvest the equivalent of the $34.1 million collected from Canadian farmers on fertilizer imports into the sector.”

“An announcement will be made early next year,” she says, without providing any more details.

How the money will be spent, and how quickly it might benefit farmers who paid extra high fertilizer prices in 2022, has yet to be determined. Multiple sources say the government is not considering direct reimbursement due to complications in tracking which fertilizer purchases were affected by the tariff.

Bibeau also pointed to changes to the Advance Payments Program announced back in June, when the interest-free portion of the program was raised from $100,000 to $250,000 for 2022 and 2023. The measure was originally projected to cost the government $61 million, but rising interest rates mean it’s now expected to cost at least $69 million.

The Atlantic Grains Council, Christian Farmers Federation of Ontario, Grain Farmers of Ontario, Grain Growers of Quebec, and Ontario Bean Growers responded with a statement late December 21, calling on the federal government to reimburse farmers directly.

“The tariff funds collected from farmers should not be a cost that is borne by those growing and providing everyone’s food. Farmers can provide information on the tariff monies they paid and can be reimbursed directly,” the groups says in a press release.

Farmers themselves took to social media in rebuttal of this story and noted that the tariff paid was in at least some cases a line item on their invoice.

Related: “More to say soon,” says Freeland, regarding fertilizer tariff impact