Private members bill working its way through Parliament would exempt grain drying, but heating fuel remains unclear
Carbon tax relief may be coming soon for Canadian farmers who use propane or natural gas to dry grain.
But it remains to be seen if that relief will also be extended to grain farmers and livestock producers who use propane and natural gas to heat barns and other essential farm buildings.
Last month, Bill C-206, An Act to Amend the Greenhouse Gas Pollution Pricing Act, passed second reading in the House of Commons.
The private members bill will now go to the House of Commons ag committee for further study.
The bill’s intent is to add propane and natural gas used to dry tough or damp grain to the list of farm fuels exempt from the federal carbon tax.
It’s unclear if the bill, as currently written, would extend the exemption to fuels used to heat barns and other farm buildings.
Philip Lawrence, the Ontario MP who sponsored Bill C206, hasn’t ruled out the possibility that an exemption could be extended to farm heating fuels.
But expanding the scope of the bill to include heating costs could potentially result in the loss of support from other political parties, he added.
During second reading, Bill C-206 received support from MPs across the political spectrum including Conservatives, New Democrats, Greens and Bloc Quebecois members.
“We’re exploring that (the possibility of exempting farm heating fuels) with our stakeholders,” Lawrence said.
“But we do have to be cognizant of that fact that if we expand (the bill’s scope) too widely, we may lose support from some of the other opposition parties.”
Carbon taxes collected on farm heating fuel represents a significant cost for many producers.
John Barlow, a Conservative MP from Alberta’s Foothills constituency, said last year that one producer in his riding — the owner of a large poultry farm — paid more than $50,000 in carbon taxes to heat his poultry barns for a single year.
“When the carbon tax in 2022 goes to $50 a tonne, that $50,000… will be closer to $100,000 a year,” Barlow said in the House of Commons.
“We are not talking nickels and dimes here. We are talking about the difference between ensuring this operation is viable or going bankrupt.”
It’s also unclear whether a federal carbon tax rebate program, as proposed last month by federal agriculture minister Marie-Claude Bibeau, would offer tax relief on farm heating fuels.
“We are committed to new rebates for on-farm fuel use such as grain drying, in order to both support our food producers and encourage new investments in sustainable technologies…,” Bibeau said.
If given a choice, most Canadian farmers would prefer a program that offers tax exemptions to one that offers federal rebates, Lawrence said.
On the surface, administering an exemption would appear to be simpler than administering a rebate, he added.
“We need to go through committee and I’m sure there will be lots of challenging questions asked about the implementation (of Bill C-206) and how it will be administered, so those are some of the details that we’ll have to work out, and I’m confident we will,” Lawrence said.
“I hope and look forward to the continued support of …the other opposition parties,” he added.
Discussions with legislative counsel and ag industry stakeholders are taking place to see what else might be included in the proposed legislation.
Lawrence said it’s reasonable to expect that C-206 will reach the third and final reading in the House of Commons before the end of the calendar year.