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Preamble:
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.
Advocacy
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.
Sources
Government of Canada
https://www.canada.ca/en/environment-climate-change/services/climate- change/pricing-pollution-how-it-will-work/alberta.html
https://www.parl.ca/DocumentViewer/en/44-1/bill/C-234/first-reading
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.
Click here to view the full resolution.
Environment and Climate Change Canada
On behalf of the Honourable Steven Guilbeault, Minister of Environment and Climate Change, I am responding to your correspondence of November 29, 2022, concerning the Rural Municipalities of Alberta Resolution 16-22F: Exemption of Natural Gas and Propane for Agriculture Under the Greenhouse Gas Pollution Pricing Act.
The matter you raise is the responsibility of the Department of Finance Canada. I am therefore forwarding your correspondence to the office of the Honourable Chrystia Freeland, Minister of Finance, for consideration.
Development:
Bill C-234, an act to amend the Greenhouse Gas Pollution Pricing Act, passed third reading in the Senate on December 12, 2023. Although it has yet to receive royal assent, the bill was passed by the Senate with amendments but is yet to be passed as amended by the House of commons. The proposed amendments to the bill seek to remove clauses that would exempt carbon taxes from propane and natural gas used to heat or cool barns and livestock buildings and dry grain – extending the carbon tax exemptions available to farmers on gasoline and diesel. If this bill is passed with the proposed amendments, farmers and ranchers would no longer have such exemptions and would incur additional costs to maintain their livestock and/or crops. This resolution is assigned a status of Intent Not Met. RMA will continue to look for updates on the status of Bill C-234 and will continue advocating on the issues presented in this resolution.
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