OFA is pleased that Bill C-206, which was introduced by MP Philip Lawrence, has passed its second reading on February 24, 2021. This Bill would amend the current wording in the Greenhouse Gas Pollution Pricing Act to include natural gas and propane as qualifying farming fuels that would be exempt from the federal fuel charge, also known as the Federal Carbon Tax. OFA supports broadening the agriculture exemption from the Federal Carbon Tax.
Farmers are largely unable to recover the cost of the Carbon Tax from the marketplace. The Federal Carbon Tax negatively impacts the ability of Canadian farmers to compete in domestic or international markets. The Federal Carbon Tax reduces the financial capacity of farm businesses to make efficiency improvements that would reduce energy consumption and carbon emissions.
The need for a broader agricultural exemption is made more urgent given the Federal government has pledged to more than triple the price of carbon by 2030. Under the proposed Healthy Environment and Healthy Economy (HEHE) Plan, the Carbon Tax will increase by $15 per tonne CO2eq per year starting in 2023 until the tax hits $170 per tonne in 2030.
In October 2020, OFA submitted a letter to MP Philip Lawrence supporting Bill C-206 and its efforts to help expand the agriculture exemption. Read the letter here.
Bill C-206 has now been referred to the Federal Standing Committee on Agriculture and Agri-Food. The Standing Committee is expected to hold public hearings and consider any needed amendments to the Bill. The Bill currently calls for an amendment to the definition of a qualifying farm fuel. OFA believes that a change is also needed to the definition of eligible farming machinery to explicitly allow for natural gas and propane to be used to generate heat for livestock barns and in grain drying. OFA intends to make this recommendation to the Standing Committee.
OFA thanks MP Philip Lawrence for supporting Canadian farmers and urges the Standing Committee to schedule hearings on Bill C-206 as soon as possible.