The editor:
In the weeks leading up to the 2017 Saskatchewan provincial budget, there has been much uninformed discussion about agricultural tax exemptions. I would like to set the record straight on behalf of Saskatchewan’s farmers and ranchers.
In 2015, agricultural producers generated $14 billion in gross farm sales, which represents over 20 per cent of Saskatchewan’s gross domestic product. In a very good year, we retained just over 20 per cent of that total in net farm income, shared between 35,000 farms.
So on an average year, between 80 and 85 per cent of all the revenues generated by agriculture are spent in the economy at large. With resource industries struggling, that 80 per cent is what has been sustaining the provincial economy, in both rural and urban areas.
Tax exemptions are not subsidies. For example, the vast majority of tax exempt fuel is not used on the provincial highway system, but is used for field work, or for hauling on the rural municipal roads that farmers already pay for through our property taxes.
Tax exemptions for farm inputs and machinery do not cost any other taxpayer a nickel, just like tax exemptions on children’s clothes or home heating do not cost anything to other provincial taxpayers.
The average total net farm income over the last 10 years is just over $2 billion. Removal of farm tax exemptions would cost our industry $380 million. Because we don’t set our own prices, any increase in cost does not get passed on to our customers; it comes straight out of our bottom line, and this impacts the future of our industry, and the provincial economy as a whole.
Our net farm income is not just our “paycheque;” it is also our capital pool to continue investing in our operations to grow our businesses, adopt new technologies and to bring in the next generation of producers.
Agricultural producers believe in paying our fair share, and we believe we already make a very substantial contribution to the provincial economy and provincial budget. It would be risky to make assumptions that could cost the province dearly in the future.
Todd Lewis
Gray, Sask.
President of the Agriculture Producers Association of Saskatchewan
