Farmers and rural residents will get breaks on what they’ll have to pay under a carbon pricing scheme announced by the federal government.
But as of yet, those promises of relief are vague.
The federal government announced the measures in late October for provinces unwilling to implement their own carbon pricing scheme.
The government also promised to send 90 per cent of the revenue from the carbon pricing directly back to residents of the province in which it is collected.
Why it matters: Farmers and rural residents use more carbon-based fuels than people living in cities due to greater need for heating and transportation and fewer options and as such will see a greater impact of carbon pricing.
The four provinces where the Greenhouse Gas Pollution Pricing Act (GGPPA) will include Ontario, New Brunswick, Manitoba, and Saskatchewan. Other provinces have come up with their own carbon pricing system. The Ontario Conservative government recently cancelled Ontario cap and trade system for pricing carbon.
The price per tonne of carbon will be $20 starting in April 2019 and will rise $10 per tonne in April each year until it reaches $50 per tonne in 2022.
Farmers expressed concern on social media and some farm groups also said they didn’t like the plan, despite some exemptions for farmers. Some questioned why farmers still aren’t credited for the amount of carbon their crops sequester.
The Canadian Federation of Agriculture said some of farmers’ concerns were addressed in the proposal released Oct. 23, but that increased investments were needed for farmers having to deal with the policy.
“Proposals on carbon pricing have become highly political in recent years, and CFA is focused on finding constructive solutions to help farmers — without getting engaged in partisan disagreements,” said CFA President Ron Bonnett.
“The government recognizes that particular groups or sectors require targeted relief from the fuel charge – in particular because of the small number of alternative options they may have in the face of carbon pollution pricing,” said a government backgrounder targeted at farmers, fishers and rural residents.
Here’s how the government says how relief from fuel charges will work for farmers.
- The relief is provided “up front” using exemption certificates, so the fuel can be delivered without the fuel charge applying.
- A distributor can deliver gasoline or diesel fuel to a farmer or a farm if the fuel is to be used “exclusively in the operation of eligible farming machinery and all, or substantially all of the fuel is for use for eligible farming activities”.
- Farmers don’t have to be registered to receive the relief from the payment.
- Eligible equipment includes trucks or tractors, vehicles not licensed to be operated on a public road, industrial equipment or a portable engine. It’s unclear yet if that would apply to grain drying equipment.
- Greenhouse operators will qualify for 80 per cent relief from the fuel charge on natural gas and propane. The greenhouse has to be a commercial grower of plants and the building has to be “all or substantially all” used for the growing of plants to qualify.
- The relief is limited to the heating or and production of carbon dioxide in a commercial greenhouse with the “reasonable expectation of profit”.
Rural residents could also qualify for an increase in the payment that comes back to them by the government, especially based on the lack of alternative transportation options.
The CFA expressed concern that the greenhouse provisions only focused on heating and not on cooling.
It also requested that heating and cooling be included for any building used for agriculture production. The backgrounder only referred to greenhouses, but poultry and hog barns are heated and many other livestock buildings now use focused areas of heat or cooling, such as in calf barns and in lambing hospital rooms.
The Ontario Greenhouse Vegetable Growers said that it was pleased that the government recognized the “unique nature of greenhouse farming” by specifically targeting relief from the carbon pricing scheme to greenhouse growers.
The rebates for the general public will arrive next June, just in time for the next federal election.
Conservative Party Leader Party Andrew Scheer, who has yet to unveil his own climate change plan, dismissed the tax as “an election gimmick.”
– With files from Reuters