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Interest rate hikes have yet to bring down food prices. Here are the tools governments could try


CdnFox

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https://www.cbc.ca/news/politics/government-food-prices-lower-1.6759117

Here's a few points - first off despite the headline the purpose of this article is to basically say the gov't can't do anything so it's not trudeau's fault. Thanks CBC!

But - the one thing they won't mention anywhere in there as part of the reason OR part of the solution?

Carbon tax. The farmers are paying carbon tax to grow the food, then more to harvest the food, then the suppliers pay carbon tax to ship the food to their processing plants, and more carbon tax to process the food to a useable state. Then more carbon tax to ship it to the grocery store and carbon tax to keep it cool until you buy it.

That's before the carbon tax you pay in your car to go buy it and pick it up.

There is a HUGE carbon tax cost in food production and carbon taxes have been going up and continue to do so.

But - the cbc didn't mention it even once. Despite the fact it's one thing the gov't could change tomorrow for those industries and would have an immediate noticeable impact.

Hmmmmm

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Interest rate hikes are not intended to bring down food prices but rather to stop rising house prices. It has to some extend backfired as it caused ridiculously rising rental prices so affecting most those who cannot afford buying the house or the poor. Also those with loans on credit cards (again the poot) paying more on their debts while the rich getting more interest on their savings. More for the rich and less for the poor. Damn.

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1 hour ago, CITIZEN_2015 said:

Interest rate hikes are not intended to bring down food prices but rather to stop rising house prices. It has to some extend backfired as it caused ridiculously rising rental prices so affecting most those who cannot afford buying the house or the poor. Also those with loans on credit cards (again the poot) paying more on their debts while the rich getting more interest on their savings. More for the rich and less for the poor. Damn.

Well very true about the housing impact - people think housing prices have come down but really the cost of buying a home for anyone who has to take a mortgage has gotten worse. A 20 percent drop in housing prices (from the super high peak) doesn't make up for a 400 percent increase in mortgage rates.

But the whole 'interest rate' thing wasn't just about housing. It's been billed as an 'inflation fighting' tool. But it's not really reducing the inflation on food. Or much else if we're being honest. And that's what the article is pointing to.

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Just how do interest rates have anything to do with food prices?

Grocers do not borrow to buy from suppliers, they're invoiced. If anyone at all uses credit to buy food, they're either buying more than they can afford or paying cresit cards off on time to gain bonuses. Both are personal choices, noting to do with the Bank of Canada.

* notice the way grocers explain away excessive profits to fool people who don't know simple math, "Our margins haven't increased at all".
If they buy a loaf of bread for $1 and sell it for $1.25 their margin is 25%. If their cost goes up to $2 and their margin doesn't change at all they sell it for $2.50.
They earn 50c instead of 25c -100% more, you pay $2.50 instead of $1.25 - 100% more, double and you have to buy that loaf of bread... it's not a discretionary purchase! And you turn on the new and here inflation is up 6% when you paid double for that necessary loaf of bread.
That's why they always mention 'markup' not increasing. To fool people!

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16 hours ago, CdnFox said:

Well very true about the housing impact - people think housing prices have come down but really the cost of buying a home for anyone who has to take a mortgage has gotten worse. A 20 percent drop in housing prices (from the super high peak) doesn't make up for a 400 percent increase in mortgage rates.

But the whole 'interest rate' thing wasn't just about housing. It's been billed as an 'inflation fighting' tool. But it's not really reducing the inflation on food. Or much else if we're being honest. And that's what the article is pointing to.

Well they raised interest rates to damped demand for housing (higher cost of borrowing and less people to qualify) and hence lower prices as demand falls. Home prices have indeed fallen all over Canada past year up to 20%, though I get your point that it is more expensive for those who qualify for mortgage to finance a less expensive house.

I don't believe interest rates affect food prices as people don't borrow to buy grocery. War in Ukraine and a break in delivery chain and pandemic are the main causes of rise in food prices. Until they are addressed in time food prices will keep rising.

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6 hours ago, CITIZEN_2015 said:

Well they raised interest rates to damped demand for housing (higher cost of borrowing and less people to qualify) and hence lower prices as demand falls.

No, that's not why they raised interest rates.  And that wouldn't be very smart of them to do - the demand for housing would remain the same. There's the same number of people. So if people can't afford houses then there's more renters and rents go up. Which is precisely what's been happening.

6 hours ago, CITIZEN_2015 said:

I don't believe interest rates affect food prices as people don't borrow to buy grocery.

It tends to affect how much groceries they buy, and how much food restaurants buy. And some types of groceries more than others. I get what your'e saying - it's not direct. But - if I have to spend more on my mortgage, i've got less to spend on food. If i have to pay more for fuel, same thing. So raising the interest rates affects consumer spending across the board, even if it's not directly. And that SHOULD have SOME impact on food prices but so far not so much.  which is in and of itself concerning.

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Description of a Canadian farm's operating expenses...

  • property tax
  • cash rent - rent for land, grazing fees, buildings
  • cash wages - (if you can find someone willing to work)
  • interest, farm business loans, credit from suppliers
  • building repair
  • electricity
  • heating fuel - for grain and oilseed drying, heating of barns and other buildings
  • fuel expense - petroleum, diesel, oil, (for tractors, combines, generators, and irrigation pumps)
  • machinery repairs and insurance costs
  • fertilizer and lime
  • pesticides
  • commercial seeds and feed
  • irrigation - water and water rights
  • crop and hail insurance
  • livestock purchases
  • rental or leasing of farm machinery
  • artificial insemination and veterinary expenses
  • and last but not least let's not forget the vaunted carbon tax!

https://www.statcan.gc.ca/en/statistical-programs/document/5214_D2_T9_V1

There are tax deductions and government rebates, but I feel relatively safe in saying that there's likely not much on this list that isn't going way up in price. And we haven't even considered the food processors and grocers yet. No, we don't want price controls. Venezuela tried that and indeed the grocery shelves went bare. Can we agree that we all need food to survive? The carbon tax isn't the problem but part of the problem (maybe a very minor part). My best guess is that whatever government subsidies, rebates, or deductions, are being handed out to the farmers.....  double it. And then let's see what happens.

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1 minute ago, suds said:

The carbon tax isn't the problem but part of the problem (maybe a very minor part).

It's a fair hunk of it. Again as you mention it's something that affects ALL the stops on the supply chain - it affects growing the food, harvesting the food, shipping the food to the processors, processing the food, shipping it to the stores and the costs of the energy to keep it fresh once it's there. There's carbon tax on all  of that. I believe the current carbon tax has been found to be responsible for something like a half percent or more of the current overall inflation - that's actually a fair bit.

Doubling the subsidies doesn't help in an inflationary situation. Pouring more unearned money into the economy just drives inflation up. That's largely how we got into this mess.

At the end of the day the only things that beat inflation are reducing demand or increasing availability of product. That's it. And we're not likely to deal with the first one unless trudeau is willing to slow down the number of people coming into the country until things stabilize. So they have to look at how to take some of the red tape and costs out of production and supply (and make sure the savings get passed on).  And they may have to slow immigration till that catches up, 400,000 extra mouths to feed every year puts a LOT of strain on that system and keeps prices high.

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11 hours ago, CdnFox said:

It's a fair hunk of it. Again as you mention it's something that affects ALL the stops on the supply chain - it affects growing the food, harvesting the food, shipping the food to the processors, processing the food, shipping it to the stores and the costs of the energy to keep it fresh once it's there. There's carbon tax on all  of that. I believe the current carbon tax has been found to be responsible for something like a half percent or more of the current overall inflation - that's actually a fair bit.

Doubling the subsidies doesn't help in an inflationary situation. Pouring more unearned money into the economy just drives inflation up. That's largely how we got into this mess.

At the end of the day the only things that beat inflation are reducing demand or increasing availability of product. That's it. And we're not likely to deal with the first one unless trudeau is willing to slow down the number of people coming into the country until things stabilize. So they have to look at how to take some of the red tape and costs out of production and supply (and make sure the savings get passed on).  And they may have to slow immigration till that catches up, 400,000 extra mouths to feed every year puts a LOT of strain on that system and keeps prices high.

In Ontario (which has adopted the federal carbon tax plan) farmers are exempt from paying the carbon tax on gas or diesel used for...

  • farm trucks or tractors
  • a vehicle not licensed to be operated on a public road
  • an industrial machine or portable engine

Private member Bill C-234 which is in its 3rd reading at the Commons will  exclude all farm fuels such as natural gas and propane used extensively for barn heating and grain drying as well. So if the bill gets passed by the Commons and then by the Senate, there will be no carbon tax for farmers that is farm related.  With the (possible) exception of fuel for their own personal non-farming vehicle and heating their principle residence.  And of course it was a conservative (Ben Lobb Huron-Bruce) who introduced the bill. Who else would it be?

https://www.parl.ca/DocumentViewer/en/44-1/bill/C-234/second-reading

 

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3 hours ago, suds said:

In Ontario

Sure, and that's a good start. But it still is charged on the trucks that haul the stuff to the processing plant the processing plant, and probably on their electricity. etc etc etc.

But yeah - cut the costs of food production and distribution down. That's a good start. Make it easier for people to grow. That's a good start. etc etc.  You have to think as a gov't "How do we make it easier for farmers and food producers to do what they want to do and make food". 

And if you're going to be bringing in 500,000 thousand new mouths to feed every year you need to think how they're going to ramp up for that as well.

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On 3/4/2023 at 3:21 PM, Michael Hardner said:

What's the Carbon Tax impact on grocery prices vs prices elsewhere?

Pretty much the same.  The idea that the carbon tax is substantially responsible for grocery store prices rising isn't really   grounded in reality.  Does it have an impact?  Sure, but you can roughly calculate that as a 10% fuel tax, with fuel cost increases being (roughly) 1:4-1:5 correlated to domestic food production/distribution prices (maybe worse way up in places like Medicine Hat, but probably better in places like Toronto).   

You're therefore looking at a ~2-3% increase in food costs for groceries, non-inflationary, and existing prior to 2022's inflation spikes. 

TLDR = Carbon tax had almost nothing to do with your bigger grocery bills in 2022, and singling it out for this particular issue is silly.  We'd be better off talking about income tax or GST reductions instead.  

 

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2 minutes ago, Moonbox said:

You're therefore looking at a ~2-3% increase in food costs for groceries, non-inflationary, and existing prior to 2022's inflation spikes. 

 

nope. You're just trying to add fuel costs. But remember it's on electricity, and also the increased costs of things like fertilizer both in processing and in shipping.

It also impacts people's personal money, so labour rates tend to go up. If i'm paying more to heat my home, drive to work (most farms aren't on a bus route), buy my food etc then i gotta charge the boss more. So everything that's affected by the carbon tax winds up driving up the costs as a result.

And that winds up happening at the processing plant too, and the grocery store and the truck drivers etc.

so the impact is considerably higher than you're getting just calculating it on fuel.

And most of that wont' have existed prior to the inflation spike. Remeber that it was only very recently that trudeau's carbon tax was implemented, and many provinces which produce our food didn't have any carbon tax before that. It takes time to work its' way through they system. AND it's been increasing every year. And will go up again this april.

It's wrong to downplay it's effect. It certainly isn't the only factor in high food prices but it is definitely a much more significant factor than you suggest.

TLDR - the carbon tax is certainly not the only factor in rising fuel costs but it is indeed a very significant factor, being a tax on everything.

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47 minutes ago, CdnFox said:

nope. You're just trying to add fuel costs. But remember it's on electricity, and also the increased costs of things like fertilizer both in processing and in shipping.

Shipping was included.  At $50 per metric ton of carbon, go ahead and (try to) calculate how much the carbon tax increases fertilizer costs and your end-grocery bill.  Keep in mind that people eat less than 1 metric ton of food per year.  I'll wait.  

47 minutes ago, CdnFox said:

It also impacts people's personal money, so labour rates tend to go up. If i'm paying more to heat my home, drive to work (most farms aren't on a bus route), buy my food etc then i gotta charge the boss more. So everything that's affected by the carbon tax winds up driving up the costs as a result.

That has nothing to do with grocery bills, specifically.  That affects everyone, and every industry.  

47 minutes ago, CdnFox said:

so the impact is considerably higher than you're getting just calculating it on fuel.

Not really.  You can only apply these extra costs proportional to their share of input costs from farm to table.  They don't get added on top of each other over and over.  A 10% tax on fuel, for example, is always going to end up having much less than a 10% overall price impact, because fuel is only a share of the overall cost.  This would be the most important and most costly impact the carbon tax would have on food prices.  There are others, yes, but we're always talking about percentages of percentages.  

47 minutes ago, CdnFox said:

And most of that wont' have existed prior to the inflation spike. Remeber that it was only very recently that trudeau's carbon tax was implemented, and many provinces which produce our food didn't have any carbon tax before that. It takes time to work its' way through they system. AND it's been increasing every year. And will go up again this april.

Yes, but it was implemented in 2019, and it's been going up since then.  It didn't all of the sudden materialize in 2022 and drive your food prices up, so as an inflation factor you could only attribute 2022's numbers to the amount the carbon tax increased.  Everything else is an outside factor.    

47 minutes ago, CdnFox said:

It's wrong to downplay it's effect. It certainly isn't the only factor in high food prices but it is definitely a much more significant factor than you suggest.

It's wrong to grossly exaggerate its effect too.  ?

You can argue the merits or faults of carbon taxes all you want, but trying to tie it back in to grocery costs skyrocketing in 2022 is fallacious.  Where I think a much more productive conversation to be had on carbon taxes is when it makes our domestic producers less competitive, while foreign jurisdictions can export to us and not have to pay the same charges.  That's bad policy, but silly in the context of grocery bills.  

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12 hours ago, Moonbox said:

Shipping was included. 

I don't think it was at all stages. but show your numbers on that if you like

12 hours ago, Moonbox said:

At $50 per metric ton of carbon, go ahead and (try to) calculate how much the carbon tax increases fertilizer costs and your end-grocery bill.  Keep in mind that people eat less than 1 metric ton of food per year.  I'll wait.  

I guess that would be relevant if people ate carbon. But lets take a look at some of the numbers

Lets go with 100 grams of carbon per tonne per km. When you look at all the places it has to go, it's reasonable to say that on an average the seller has to pay for about 1000 km to the average end user, and that's being VERY generous, and doesn't include the costs in fuel to the farmer to spread it of course.

So - roughly 100000 grams or 100 kilos per tonne. Or about 100 kg or about 5 dollars per tone of fertilizer.

Now, it gets a little hard to follow from here becuase different foods need different amounts. But for corn. you'd need about 10 dollars worth that carbon cost of fertilizer a year to grow a tonne of corn.

Then that gets marked up of course. And again. And possibly again. so that's about 80 dollars

As you noted the average person eats just under a tonne a year. Not all of it is plant of course but the cost for beef for carbon tax is pretty rowdy as well,  So - to provide enough food for what a person eats per year the end user's costs will be somewhere in the range of 80 dollars or so

That's JUST the effect of carbon tax on fertlizer. It does not include the costs of farming, or transporting to the producers or to the grocery store or of electricity or any thing else.

ANd it doesn't include the increase in inflationary labour costs we discussed.

Fertilizer is at an all time record high right now btw.  Guess what else is? Our produce prices.

 

Most of us don't eat only corn. But its pretty clear that for vegetables anyway it's adding a very healthy amount to the family food bill. All tolled up we're talking hundreds of dollars a year.

13 hours ago, Moonbox said:

Not really.  You can only apply these extra costs proportional to their share of input costs from farm to table.  They don't get added on top of each other over and over. 

Of course they do. The farmer will charge a mark up on his TOTAL cost of production. Then the next guy does and so on. That's how it works

13 hours ago, Moonbox said:

Yes, but it was implemented in 2019, and it's been going up since then.

So have food prices. ANd because it takes a year or so to trickle down the line it's no surprise that we're still watching it grow.

13 hours ago, Moonbox said:

It's wrong to grossly exaggerate its effect too.

Yes, but you'd be lying if you suggested i did.

13 hours ago, Moonbox said:

You can argue the merits or faults of carbon taxes all you want, but trying to tie it back in to grocery costs skyrocketing in 2022 is fallacious.

It is 100 percent accurate.  And it was predicted and explained many times when the carbon tax was proposed, Harper and his economic people explained it would be a 'tax on everything' and how it would impact people and that it would drive food prices up very high.

It's like telling someone 'gravity is a serious thing, please don't jump off the cliff", and they do and on the way down they say "well blaming gravity for the fact i'm falling is fallacious".

No - it is the aboslute most likely outcome. It's predictable. It's obvious. and it's significant'.

Right now people's food bills are going up thousands of dollars a year. Several thousands in some cases. The carbon tax is not responsible for all of that. But it's responsible for a very respectable hunk - many hundreds of dollars.

So when we talk about bringing food prices back under control we have to look at that. It's the easiest thing at hand we would have to help drop prices significantly.

INstead we're raising carbon taxes in 1 month. Wanna bet our food prices continue to go up'?

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7 hours ago, CdnFox said:

Now, it gets a little hard to follow from here becuase different foods need different amounts. But for corn. you'd need about 10 dollars worth that carbon cost of fertilizer a year to grow a tonne of corn.

Source?  

7 hours ago, CdnFox said:

That's JUST the effect of carbon tax on fertlizer. It does not include the costs of farming, or transporting to the producers or to the grocery store or of electricity or any thing else.

Fertilize use makes up about 70% of corn's carbon footprint.  

Overall GHG emission intensity of grain corn varied from 243 to 353 kg CO2eq Mg−1 grain, of which 72% were associated with N inputs [34% soil nitrous oxide (N2O) from synthetic fertilizer N (SFN), 13% from SFN production and 10% from applied manure N].

https://cdnsciencepub.com/doi/10.4141/cjss2013-044#:~:text=Overall GHG emission intensity of,% from applied manure N].

If you take the high end of that estimate, you're looking at ~$18 worth of carbon taxes for every metric ton of corn production (all inputs).  

7 hours ago, CdnFox said:

Then that gets marked up of course. And again. And possibly again. so that's about 80 dollars

An 800% mark-up for what you call a $10 expense?  No.  That's not how that works.  

7 hours ago, CdnFox said:

ANd it doesn't include the increase in inflationary labour costs we discussed.

You can't include that, because that's an economy-wide phenomenon.  

7 hours ago, CdnFox said:

Right now people's food bills are going up thousands of dollars a year. Several thousands in some cases. The carbon tax is not responsible for all of that. But it's responsible for a very respectable hunk - many hundreds of dollars.

The carbon tax is responsible for some of it, but since the carbon tax is only going up incrementally per year, and food prices skyrocketed in 2022 and 2023, they're self-evidently only responsible for a small part of the recent increases. 

 

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20 minutes ago, Moonbox said:

Source?  

https://www.dtnpf.com/agriculture/web/ag/crops/article/2016/03/21/nitrogen-math-simple-calculations

There are dozens of different examples - go look it up. You will need to read several sources to get a clear picture, i'm not putting together a lesson plan for you. But it's recommended you fertilize three times a year (different amounts of fertilizer each time tho). there is a reason why fertilizer is one of the biggest expenses for farmers.

20 minutes ago, Moonbox said:

Fertilize use makes up about 70% of corn's carbon footprint.  

Overall GHG emission intensity of grain corn varied from 243 to 353 kg CO2eq Mg−1 grain, of which 72% were associated with N inputs [34% soil nitrous oxide (N2O) from synthetic fertilizer N (SFN), 13% from SFN production and 10% from applied manure N].

https://cdnsciencepub.com/doi/10.4141/cjss2013-044#:~:text=Overall GHG emission intensity of,% from applied manure N].

If you take the high end of that estimate, you're looking at ~$18 worth of carbon taxes for every metric ton of corn production (all inputs).  

No, that's emissions. Not total fertilizer used. Lime wouldn't even be factored in there for example. And we're calculating the cost of getting the fertlizer to the farm, not the environmental impact of the corn or fertilizer so you're not even looking at the right issue.  Total Swing and a miss.

20 minutes ago, Moonbox said:

An 800% mark-up for what you call a $10 expense?  No.  That's not how that works.  

It's entirely how that works. If you go buy an ear of corn from the farmer directly it might be different but every step of the process it gets marked up again.  So when you buy a can of corn it's actually brutally higher than what i mentioned. So it averages out.

Think of it like this. How much would it cost you to actually grow an ear of corn? Less than a penny for the seeds, a few cents per ear for fertilzer, and time That's about it. Corn can be produced for next to nothing

Now how much do you pay for an ear of corn? Most years it's about a buck an ear. That's probably about a 1000 percent mark up. :)

Sorry but that's largely how food works.

20 minutes ago, Moonbox said:

You can't include that, because that's an economy-wide phenomenon.  

of course you can. The inflationary cost of labour is driven in part by carbon taxes. It makes everything a little more expensive, which means employees need a little bit more money.  It's not complex.

20 minutes ago, Moonbox said:

The carbon tax is responsible for some of it, but since the carbon tax is only going up incrementally per year, and food prices skyrocketed in 2022 and 2023, they're self-evidently only responsible for a small part of the recent increases. 

The carbon tax was only started in most agricultural areas in 2019, and it takes a few years for it to trickle down. For example the first year's impact would have been minor as it came in after farmers would already have made many of their purchases, and it wouldn't even begin to start showing up till later in the year or the next year.

And lo and behold - food prices have been on the rise since then. Amazing.

As i've mentioned quite clearly carbon tax is absolutely not the only factor in rising food prices. But it is absolutely NOT insignificant. It adds a fair bit of the increased costs to food - and it goes up every year.

So to bring this back to the topic on hand - IF we're looking at ways to make food more affordable, then cutting carbon taxes on all stages of food production and transport would be a very good way to start. It's one of the few thigns we can do that would have an instant benefit and wouldn't add to inflation. And it would save hundreds per year for the average family in food.

Other things should be done as well but taxing food production is a bad idea to begin with. People need food. Aside from air it's the most important thing to preserve life. It' shouldn't be a cash cow for the gov't in the first place, and right now while people are having trouble affording food that's doubly true.

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1 hour ago, CdnFox said:

No, that's emissions. Not total fertilizer used. Lime wouldn't even be factored in there for example. And we're calculating the cost of getting the fertlizer to the farm, not the environmental impact of the corn or fertilizer so you're not even looking at the right issue.  Total Swing and a miss.

They were talking about the overall emission profile of the crop, not just the fertilizer used.  We're talking lime, grain drying, fuel use on farms etc...

1 hour ago, CdnFox said:

It's entirely how that works. If you go buy an ear of corn from the farmer directly it might be different but every step of the process it gets marked up again.  So when you buy a can of corn it's actually brutally higher than what i mentioned. So it averages out.

It really really isn't.   There will almost certainly be a mark-up at multiple steps in the supply chain, but not necessarily all, and you can only attribute a price increase due to carbon taxes proportionally to their contribution in cost.  

Each step in the supply chain might (if they have pricing power) add a mark-up to equalize profit margins, but that would be a percentage on top of the real price increase at each step, rather than the absurd 8x factor you're suggesting here. 

1 hour ago, CdnFox said:

As i've mentioned quite clearly carbon tax is absolutely not the only factor in rising food prices. But it is absolutely NOT insignificant. It adds a fair bit of the increased costs to food - and it goes up every year.

I guess it depends on what you're talking about as significant.  $15/metric ton carbon tax increase in 2022 was very small fraction of the 11-20% increase people have seen over the last year or so.   You could argue that repealing the carbon tax a altogether and going back to pre-2019 standards could reduce prices meaningfully, and that's true, but that's not what was driving the crushing and overwhelming majority of food cost inflation in 2022.  

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1 hour ago, Moonbox said:

They were talking about the overall emission profile of the crop, not just the fertilizer used. 

Seeing as what WE were discussing is the emmissions necessary to get the fertilizer TO the crop and hat wasn't included in their calculations at all, again - swing and a miss. Completely useless info.

2 hours ago, Moonbox said:

It really really isn't. 

It really really is. Repetatively saying something that is untrue won't make it true for you.

 

2 hours ago, Moonbox said:

There will almost certainly be a mark-up at multiple steps in the supply chain, but not necessarily all,

All.  Thats how business works. They pass costs on to the consumer. Every single step of the way marks their goods up.

That's why NORMALLY taxes are rebaitable till the last user. GST for example - no need to mark THAT up because the company doesn't have to pay it, they get their money back from the gov't as it goes up the chain till eventually it gets to the consumer who's the only one who pays it.

So they pay the gst on the inflated price but they don't have to pay any markup on the GST.

But the carbon tax does not work that way. It's a cost every step of the way and absolutely 100 percent it's going to get marked up. In many cases they can't even avoid it because they can't break it out seperately effectively.

2 hours ago, Moonbox said:

I guess it depends on what you're talking about as significant. 

Several hundred dollars per year per family is significant. Unless you're rich, that's a lot of money especially right now. And as i have shown the carbon tax costs at least that much. Anyone who claims that several hundred a year for a family ISN'T significant is so out of touch that they really shouldn't be talking in the first place.

There's no arguing this. This is what economists and business people and conservatives were pointing out earlier would happen, the numbers havent' changed, and this is what we're getting.  As predicted.

Sorry. The carbon tax is a very significant burden. It was SUPPOSED to be if you'll recall, to incentivize people to go green. I guess they didn't mean 'green' as in food.

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44 minutes ago, CdnFox said:

Seeing as what WE were discussing is the emmissions necessary to get the fertilizer TO the crop and hat wasn't included in their calculations at all, again - swing and a miss. Completely useless info.

That may have been what you figured you were talking about, but that would only be a small part of the equation, and I gave you a more comprehensive and inclusive figure.  I gave you the overall carbon emission rates for corn grain farming.  It included fuel costs on the farm, drying the kernels, fertilizing the soil etc.  That's useless?  Lol okay.  

44 minutes ago, CdnFox said:

It really really is. Repetatively saying something that is untrue won't make it true for you.

No, the fact that you made up a bunch of numbers is.  ? 

44 minutes ago, CdnFox said:

All.  Thats how business works. They pass costs on to the consumer. Every single step of the way marks their goods up.

Yes.  Businesses pass costs up to the consumer and mark up the chain to make their margins.  You know what doesn't happen though?  Small input cost increases being multiplied by 800% up the supply chain.  That's definitely not how businesses work, especially not ones like bulk agriculture where producers have limited pricing power.    

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1 hour ago, Moonbox said:

That may have been what you figured you were talking about,

it is literally exactly and precisely what we were talking about. It was the literal question asked.  What you've posted is utterly irrelevant.  Obviously having now realized that you're trying to change what we were talking about :) And it still wouldn't make sense, GHG emissions have nothing to do with the actual cost in carbon tax one pays.

1 hour ago, Moonbox said:

 It included fuel costs on the farm, drying the kernels, fertilizing the soil etc.  That's useless?  Lol okay.  

Couldn't be more useless. It would be on top of what was being discussed.

1 hour ago, Moonbox said:

No, the fact that you made up a bunch of numbers is.  ? 

Awww muffin - you've realized i was right and now you're just cranky :)

1 hour ago, Moonbox said:

Yes.  Businesses pass costs up to the consumer and mark up the chain to make their margins. 

Gosh so i was right all along!!!! Thanks for verifying. Yeash.

1 hour ago, Moonbox said:

You know what doesn't happen though?  Small input cost increases being multiplied by 800% up the supply chain. 

Of course it does. In some cases it's far worse than that. In some industries that's just the start.

Like i said - the actual cost to grow an ear of corn is pennies. You pay more like a dollar at the store. So - right off the bat we can see you're wrong. And of course it depends how processed it is.

AND that doesn't include the other costs, that was just the fertilizer, not the carbon costs of shipping to the processor or the processor's electricity and energy costs or shipping it to the store etc etc, all of which gets carbon tax added as well, tho fewer mark ups as you get closer to the consumer.

But yeah. Everyone marks it up. And in the food industry to cover spoilage and damage and such the markups are high.

So there you go

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4 hours ago, CdnFox said:

But yeah. Everyone marks it up. And in the food industry to cover spoilage and damage and such the markups are high.

Yes, everyone marks up their prices.  Thanks for stating the obvious, again, and something we've already agreed on.  What nobody's agreeing with is how a carbon tax's price impact gets multiplied by a factor of 8x, as you proposed.  ?

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10 hours ago, Moonbox said:

Yes, everyone marks up their prices.  Thanks for stating the obvious,

You were the one arguing against it :)  I love that now you realize you're wrong you try to pretend you were for it all along  :)

10 hours ago, Moonbox said:

  What nobody's agreeing with is how a carbon tax's price impact gets multiplied by a factor of 8x, as you proposed.  ?

So - you agree that there's mark up, you agree there's several steps where each party would mark it up, but you don't agree that there's lots of mark up.

ANd i gave you an example which you've ignored.

So - i can't help that you don't understand math. I'll try to dumb it down for you. Mark up is exponential.  If there are 4 parties between the beginning and the moment something is sold to the end user, and they each put a 100 percent mark up on their goods - then it's not a 100 percent mark up.  It's 100 marked up to 200 marked up to 400 marked up to 800.

That's how it works. That's math.  That is why historically gov's do NOT allow sales tax to compound like that, the sellers all get a refund for or not charge sales tax to other sellers, the tax is only payable by the buyer.  GST works that way, PST tries to work the same way.

But the govt deliberately didn't do that with carbon tax.

So yes - eache step of the way the carbon tax is added to the markup. Worse - ADDITIONAL carbon tax is added each step of the way.

So carbon taxes add a lot of money to the cost of food. It's not the ONLY thing that does but it certainly would be one of the easiest things for the gov't to use to reduce the costs of food right away.

Is that more clear for you? I don' t know how much simpler i can make it.

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3 minutes ago, CdnFox said:

You were the one arguing against it :)  I love that now you realize you're wrong you try to pretend you were for it all along  :)

Nope, I was specifically against your balogna numbers, but here you are again making up things to argue against.  ?

3 minutes ago, CdnFox said:

So - i can't help that you don't understand math. I'll try to dumb it down for you. Mark up is exponential.  If there are 4 parties between the beginning and the moment something is sold to the end user, and they each put a 100 percent mark up on their goods - then it's not a 100 percent mark up.  It's 100 marked up to 200 marked up to 400 marked up to 800.

Ignoring for a second that margins are never uniform like that given disparity in pricing power throughout the chain (meaning new costs often don't get fully passed on to end consumers), we're still talking about carbon taxes here, and how a the effects of a carbon tax that's probably added only 3-5% to grocery prices since 2019 can multiply up the chain by 800% as you'd have us believe. 

21 minutes ago, CdnFox said:

That's how it works. That's math. 

You haven't really done any math here. You're just waving your hands around and making up numbers.  

21 minutes ago, CdnFox said:

That is why historically gov's do NOT allow sales tax to compound like that, the sellers all get a refund for or not charge sales tax to other sellers, the tax is only payable by the buyer.  GST works that way, PST tries to work the same way.

My god man.  This tax doesn't compound.  It's an individual tax on each carbon-adding activity in the chain.  Whatever carbon taxes you pay to grow and harvest your crop, they're only paid once.  There may be more carbon taxes up up the chain, but they're only being taxed once as well, and it's always proportional to their overall share of the end-unit cost.

 

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