+ RMA Rural Municipalities
of Alberta

Resolution 16-22F

Exemption of Natural Gas and Propane for Agriculture Under the Greenhouse Gas Pollution Pricing Act

November 9, 2022
Expiry Date:
December 1, 2025
Active Status:
Parkland County
3 - Pembina River
Sent to Government
Vote Results:

WHEREAS the federal Greenhouse Gas Pollution Pricing Act (GGPPA) applies fuel charges to natural gas and propane used in agriculture operations, with the exception of greenhouses; and

WHEREAS the cost to Canadian farmers as a result of of the GGPPA’s fuel charges for natural gas and propane are estimated to be $235 million dollars by 2024; and

WHEREAS the private Member’s Bill C-234, An Act to Amend the Greenhouse Gas Pollution Pricing Act,  which will provide relief for the fuel charge, was given second reading in the House of Commons; and

WHEREAS federal programs such as the Agricultural Clean Technology Program and tax rebate programs were aimed at providing relief to farmers from the fuel surcharges for natural gas and propane; and

WHEREAS these programs have proven difficult to access and are oversubscribed, or do not cover the actual costs expended by farmers; and

WHEREAS the GGPPA’s fuel charges to natural gas and propane  place Canadian farmers at a competitive disadvantage in comparison to international competitors  who are not subject to fuel charges;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate to the Government of Canada to amend the Greenhouse Gas Pollution Pricing Act to include natural gas and propane as exempted fuels for agricultural production.

Member Background:

Greenhouse Gas Pollution Pricing Act S.C. 2018, c.12. s. 186

Under the Greenhouse Gas Pollution Pricing Act (GGPPA), adopted on June 21, 2018, the Government of Canada  imposed a fuel charge on fossil fuels like gasoline and natural gas that applies in Alberta. The purpose of the GGPPA is to reduce greenhouse gas emissions by ensuring that carbon pollution pricing applies broadly throughout Canada.

As a result of the repeal of the Alberta carbon levy in May 2019, the Government of Canada implemented the federal fuel charge in Alberta as of January 1, 2020.The GGPPA exempts fuels used in tractors, trucks and other farm machinery from the fuel charge. Natural gas used for activities such as grain dryers and heating barns are not exempt from the fuel charge.

In 2021, the Parliamentary Budget Office estimated that the Government of Canada was collecting fuel charges on natural gas and the propane used in the agricultural sector in Alberta, Saskatchewan, Manitoba and Ontario at the following rates:


2020-2021 2021-2022 2022-2023 2023-2024 2024-2025
$9 Million $47 Million $59 Million $60 Million $60 Million


Through the fuel charge, farmers in the major agricultural production areas of the country will lose $235 million in revenue from 2020-2021 to 2024-25.

Legislative Support

In 2021, Conservative Member of Parliament Phillip Lawrence introduced a private Member’s bill, Bill C-206: An Act to Amend the Greenhouse Gas Pollution Pricing Act, to exempt natural gas and propane used in  farming operations from the carbon tax. Note: these fuels are already exempt for greenhouse operations.

Bill C-206 passed third reading in the House of Commons on June23, 2021, and in the Senate, it passed first reading before the Senate recessed for summer break. Because the bill had not passed all three readings in the Senate, the bill died when the federal election was called.

In February 2022, Conservative Member of Parliament Ben Lobb reintroduced legislation exempting propane and natural gas from the carbon tax for farmers.  Bill C-234: An Act to Amend the Greenhouse Gas Pollution Pricing Act, passed first and second readings in the House of Commons in Spring 2022 and was sent to the Standing Committee on Agriculture and Agri-Food in June 2022. For this legislation to become law, the House of Commons must pass a third reading and the Senate must pass it into law. The Liberal Members of Parliament have consistently voted against the legislation.

Funding Relief for Farmers

As part of the federal budget for the year 2021, the Government of Canada announced that it would return a portion of the proceeds from the price on pollution directly to farmers in Alberta, Saskatchewan, Manitoba, and Ontario beginning in 2021-22. It is estimated farmers would receive $100 million in the first year. The tax rebate is not based on the carbon tax paid, instead is rebated based on expenses incurred. The tax rebate does not cover the costs paid by farmers.

Budget 2021 also committed $50 million for the purchase of more efficient grain dryers for farmers across Canada under the Agricultural Clean Technology program. There were no funding programs to assist other uses of natural gas and propane such as heat for barns.

The Agricultural Clean Technology program was closed in the fall of 2021 due to oversubscription.


Recently, the Agricultural Service Board Provincial Committee passed resolution 5-22: Exemption of Natural Gas and Propane for Agriculture Under the Greenhouse Gas Pollution Pricing Act, advocating for the Government of Canada to remove the carbon tax from fuel used in agriculture production. The response from the Government of Canada to the resolution was insufficient. The Government of Canada reiterated their position that the tax rebate program will cover the carbon tax farmers are paying, which does not cover the cost of the tax.


Government of Canada

https://www.canada.ca/en/environment-climate-change/services/climate- change/pricing-pollution-how-it-will-work/alberta.html


https://www.canada.ca/en/department-finance/news/2018/10/backgrounder- targeted-relief-for-farmers-and-fishers-and-residents-of-rural-and-remote- communities.html

https://agriculture.canada.ca/en/agricultural-programs-and-services/agricultural- clean-technology-program-adoption-stream/applicant-guide#a1.4

https://www.budget.gc.ca/2021/report-rapport/p2-en.html#313 Parliamentary Budget Office

https://www.pbo-dpb.gc.ca/en/blog/legislative-costing-notes–notes-evaluation- cout-mesure-legislative/LEG-2021-049-M–bill-c-206-extension-exemption- qualifying-farming-fuel-to-marketable-natural-gas-propane–projet-loi-c-206- elargissement-exemption-qui-applique-au-combustible-agricole-admissible- inclure-gaz-naturel-commercialisable-propane

https://pbo-dpb.s3.ca-central- 1.amazonaws.com/artefacts/5b5b9f57e13225c0aa8015d196d36357877d3bb222 66c71e464604b3b7e18576

RMA Background:

2-22S: Negative Impact of Carbon Tax on Rural Albertans

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) conduct a rural impact analysis on the federal carbon pollution pricing system to determine how the system is negatively impacting rural Albertans and rural municipalities and share the analysis with the governments of Alberta and Canada; and

FURTHER BE IT RESOLVED that the RMA advocate to the Government of Canada for the amendment to the Greenhouse Gas Pollution Pricing Act to halt carbon tax increases on fuel.

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