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Alberta puts brakes on use of purple gas

EDMONTON – Up to 10,000 people will lose access to tax-exempt purple fuels in the Alberta government’s latest attempt to cull non-producers from using the cheaper gasoline and diesel fuel.

The crackdown, which started in July, is aimed at stopping non-farmers from using marked fuels, which are exempt from some provincial taxes.

So-called purple gas is nine cents a litre cheaper than regular fuel at the pump. Purple diesel has 15 cents per litre taken off in provincial taxes.

The government started renewing permits for the program in July to weed out farmers who have retired, rented out their land or left the industry, said Dale Dowswell of Alberta Agriculture.

The department estimates about 10,000 purple fuel permits will disappear in the renewal, which takes place every four years, Dowswell said.

“Every time we’ve done a renewal of this program – and this is the third one – about 10,000 people drop off.”

He added the majority of those who don’t renew weren’t using purple fuel anyway.

In order to renew their permit to use the tax-exempt gas and diesel, farmers must produce agricultural goods worth more than $10,000 each year.

If the province suspects fraud, Dowswell said auditors will check income tax forms completed by the producer.

The government has also linked its database of marked fuel permit holders with the motor vehicles registry of farm plates as another check, Dowswell said.

“For a long time, the people that were being cancelled for farm fuel were still being offered farm plates.

“The program has always taken the view that only those with a fuel number could use a farm plate,” Dowswell said.

Under the purple fuel program, the Alberta government forgoes about $110 million annually in tax revenue it otherwise would have collected.

Alberta Transportation and the RCMP conduct random spot checks with dipsticks to see if tax-exempt gas – which is marked with a distinct purple dye – is being used for non-agricultural purposes, but Dowswell dismissed tales of widespread abuse as myths.

The renewals have created some minor glitches for major retailers who sell the tax-exempt fuels, such as the United Farmers of Alberta.

“Something this size, it cannot be pain-free,” said Kim Royal, who works in UFA’s head office in Calgary.

“But it has gone fairly smoothly. The only major concern is some farmers have not got their new (purple fuel) number yet. But for the customers who have not got their new number yet, the old one is still valid.”

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