Grain Growers of Canada asked Ottawa for a $0.50-per-litre rebate on agricultural diesel amid record fuel prices. Farm Credit Canada estimates that a 5,000-acre farm in Saskatchewan would pay between $68,000 and $106,000 more for fuel in 2026.
Grain Growers of Canada sent a letter to federal Finance Minister François-Philippe Champagne requesting an emergency rebate of C$0.50 per litre of diesel purchased for eligible agricultural production activities during a defined period of exceptional fuel prices.
The organization recognizes that this is a "generous" ask, but hopes it will serve to open a conversation about some form of compensation in the face of "extraordinary fuel-cost pressures."
The letter is dated Oct. 1, 18 days before U.S. President Donald Trump announced an US$8 billion Harvest Fuel Relief program for farmers in that country. Kate Sauser, executive director of Grain Growers, said that payment reinforces the organization's argument.
"This just highlights that other countries are recognizing it as an issue as well," she said.
Diesel is one of the main input costs for farmers, so a hike of the magnitude recorded directly cuts into margins. Grain Growers calculated that a Class 8 combine consuming 70 litres of diesel per hour, seven days a week over 30 harvest days, would use 16,800 litres of fuel.
A $1 per litre increase in the diesel price would cost that farm an additional $16,800 just to operate that combine during harvest. "This calculation excludes fuel used by grain carts, trucks and other equipment supporting harvest," the organization said in its letter. With the proposed rebate of $0.50 per litre, the relief would be $8,400 for that single machine.
Farm Credit Canada published its own analysis of what record diesel prices mean for farm profitability in Canada. It used Saskatchewan's 2026 Crop Planning Guide, published in January —before the start of the war in Iran— to assess costs in the province's three major soil zones.
By replacing the $1.18 per litre price used in the guide with diesel at $2.13 per litre, canola margins would fall by between $14 and $21 per acre, depending on the soil zone. "Keep in mind that this is at the extreme end of the scenarios, given that we assume all the diesel used throughout the entire growing season is purchased at today's highest price; some relatively cheaper diesel may have been used earlier in the year," FCC said.
FCC estimates that a 5,000-acre farm in Saskatchewan would see its fuel bill rise by between $68,000 and $106,000 in 2026, without considering higher trucking and rail freight costs.
Fuel service charges now account for nearly 45% of base trucking freight, up from traditional levels of around 25%. "These surcharges increase the cost of moving anything by truck: grain to an elevator, market-ready cattle and hogs to packing plants, inputs delivered to the farm for the 2027 season, and food onto grocery shelves," FCC explained.
By comparison, increases in western grain rail freight were surprisingly moderate: the Maximum Revenue Entitlement index rose 0.7% in 2026-27. Ocean freight rates have moved higher since February, and fuel costs account for 40% of a vessel's operating costs.
Grain Growers urges the federal government to advance the fuel relief as soon as possible. If no funds are currently available, the organization is asking that money be set aside in Budget 2026, which will be tabled on Nov. 5.
Meanwhile, U.S. farmers will receive their Harvest Fuel Relief 2026 cheques in January 2027, bringing total government payments to farmers in 2026 to US$55.4 billion. That figure tops the previous high of US$45.6 billion set in 2020, a year in which aid was driven by compensation for a trade war with China and the global COVID pandemic.
Sauser said that generous U.S. subsidies could give farmers in that country a "competitive edge" over their Canadian counterparts in export markets. However, she warned that lump-sum payments are only temporary fixes that will not solve the underlying problems of rising input costs.
Sauser said her members would prefer to see long-term solutions, such as improvements to business risk management programs and an extension of the Canada-United States-Mexico Agreement (CUSMA).
