A bill under consideration in the Senate could add red tape and extra cost to ag lending, representatives from the Agriculture Carbon Alliance told senators April 18.
“Anything that makes capital more expensive right now, what with where interest rates are, where prime is, is a concern for farmers,” said Dave Carey, ACA co-chair.
Carey appeared before the Senate committee for banking, commerce and the economy alongside Cathy Jo Noble, vice president of policy and government relations with National Cattle Feeders Association, one of the ACA’s member organizations.
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They asked senators to not support Bill S-243, a private member’s bill introduced by Senator Rosa Galvez in early 2022. The bill proposes to “align the financial sector with climate commitments through various measures,” says a legislative summary of the bill.
This includes reporting requirements, enforcement of commitments to climate targets, additional “capital adequacy” requirements for banks, appointment of someone with “climate expertise” to boards of reporting entities, and “establishment of climate alignment as a superseding duty for directors, officers or administrators of reporting entities.”
Neither senators nor the ACA representatives were able to articulate precisely how the bill would affect farms. However, since the bill makes mention of emissions from land use, and as agriculture is considered an emissions-intense industry, Carey said they were concerned about “unintended consequences.”
“Our concern… is that it may undermine the access to loans that are essential for the growth and sustainability of Canadian agriculture,” Noble said.
ACA is particularly concerned about ballooning red tape. Many business risk management programs funded through the Sustainable Canadian Agriculture Partnership (S-CAP) already have environmental strings attached. Farm Credit Canada has also been rolling out sustainability incentive programs, Carey said.
Noble said the Canadian Sustainability Standards Board is already working on sustainability disclosure standards, which will be aligned with global standards but tailored to Canadian needs. ACA is involved in the consultation process.
They don’t want the bill to move forward in a silo, Noble added.
“It’s the amount of changes happening in the sector at the same time, and the different pieces don’t seem to be in any way harmonized,” Carey said.
Some programs that incentivize farmers’ adoption of more sustainable practices are so cumbersome that farmers must hire accountants or consultants to even apply, Carey said.
“This is just one more thing on the pile that is starting to reach a limit for Canadian farmers,” Noble said.
Senator Galvez, who sponsored the bill, said the bill was actually attempting to harmonize things, not create more confusion.
—Updated April 25, corrects Cathy Jo Noble’s title
