Carbon tax revenue from natural gas and propane use on farms projected to hit $60 million per year

A new report from the Parliamentary Budget Officer projects how much money would be removed from the federal government’s coffers if a carbon tax exemption were granted for on-farm use of propane and natural gas for drying grain and heating barns.

The PBO analysis estimates an exemption, as proposed in Bill C-206, would cost the federal government $235 million over the next five years. The annual amount is projected at $9 million for the remainder of the 2020-2021 fiscal year, then rising to $47 million in 2021-2022, and around $60 million per year for the subsequent three years.

Citing the report, Conservative agriculture critic Lianne Rood once again asked Agriculture Minister Marie-Claude Bibeau in Question Period on Monday about the possibility of removing the carbon tax on propane and natural gas used on farms.

“I can reassure my colleague that we are very aware of what our farmers need. We also have very important environmental obligations,” said Bibeau. “When it comes to the price on pollution, we have granted exemptions for farm fuel. We have granted exemptions for greenhouses too, and we are monitoring this file closely together with our Environment Canada colleagues.”

In June, the federal minister said her department calculated the average cost of the carbon tax on grain drying in 2019 at between $200 and $800 per farm, or 0.05 per cent to 0.38 per cent of total farm operating expenses, depending on the province. Digging into Agriculture and Agri-Food Canada’s analysis, the department derived those numbers based on estimated total carbon taxes on grain drying of $33 million in Alberta, Saskatchewan, Manitoba, and Ontario.

The PBO analysis was published last week to provide MPs with background information regarding Bill C-206, a private member’s bill introduced by Conservative MP Philip Lawrence back in February. The bill, which would remove the carbon tax from fuels commonly used for drying grain and heating barns, has been reinstated following the prorogation of Parliament this summer, and is currently at the second reading stage in the House of Commons.

Leave a Reply

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.

 

Register for a RealAgriculture account to manage your Shortcut menu instead of the default.

Register