Federal ministers promise carbon tax rebates as Conservative bill to exempt on-farm propane and natural gas passes 2nd reading


A Conservative MP’s private member’s bill that aims to exempt propane and natural gas used on farms from the federal carbon tax was approved at second reading in the House of Commons on Wednesday night.

MPs from the Conservative, New Democrat, Bloc and Green parties voted in favour of Ontario MP Philip Lawrence’s Bill C-206, sending it to the House of Commons agriculture committee with a 177 to 145 vote. Francis Drouin was the lone Liberal to support the bill.

Several farm groups, including Grain Growers of Canada, Grain Farmers of Ontario, and the Western Canadian Wheat Growers Association, have fully supported Lawrence’s bill, welcoming the effort to exempt fuels used for grain drying from the carbon tax.

However, the Liberals have decided to argue the bill won’t achieve its intended outcome with grain drying due to a technical issue with the wording of the bill.

“Bill C-206 does not provide relief for the fuel costs of grain drying, as it does not add grain drying as an eligible farming activity,” states Agriculture Minister Marie-Claude Bibeau and Environment and Climate Change Minister Jonathan Wilkinson, in an email shared with RealAgriculture late Wednesday.

As it stands, the Greenhouse Gas Pollution Pricing Act defines “eligible farming activity” as “the operation of eligible farming machinery on a farm for the purposes of farming.” The subsequent definition for “eligible farming machinery” includes “an industrial machine or a stationary or portable engine.”

“That would include a grain dryer 100 out of 100 times,” said Lawrence, responding to Liberals’ claims about the bill’s wording in the House of Commons earlier this week.

Given their explanation, it’s not clear why Bibeau and the other Liberal MPs chose to vote against the bill rather than send it to the committee where an amendment could have been made to clear up any confusion around definitions.

Meanwhile, Bibeau and Wilkinson now say they plan to roll out rebates for users of natural gas and propane.

“We are committed to new rebates for on-farm fuel use such as grain drying, in order to both support our food producers and also encourage new investments in sustainable technologies, that go beyond existing exemptions for farm fuels and rebates for greenhouses,” say Bibeau and Wilkinson, without providing any further details on how the rebates would work.

The government will also make grain drying and barn heating a priority focus under a new $165 million agriculture clean technology fund, say Bibeau and Wilkinson, while also referring to a separate $185 million “Natural Climate Solutions for Agriculture Fund” to be announced in the coming months.

Bill C-206 was originally introduced in February 2020. It will now be reviewed by the House of Commons agriculture committee after which it could be brought back to the House for a third and final vote. It would then need to go through the Senate approval process before becoming law.

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