Moved second reading of Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act.

He said: Honourable senators, I rise today as the Senate sponsor of Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act, which was introduced in the other place by member of Parliament Ben Lobb on February 7, 2022.

This bill was recently passed through the other place with the support of the Bloc Québécois, the Conservatives and the New Democratic Party, along with a few Liberal MPs. It is truly a cross-party effort and is a much-needed piece of legislation.

The objective of this bill is quite simple, and that is to create additional on-farm exemptions from the carbon tax for critical farming practices such as grain drying, heating and cooling livestock barns and greenhouses, steam flaking and irrigation.

When the Greenhouse Gas Pollution Pricing Act, or GGPPA for short, was adopted in June 2018, the bill imposed a fuel charge on fossil fuels like gasoline and natural gas. The fuel charge is applicable in all provinces and territories which do not have their own federally approved carbon pricing systems. This currently includes Alberta, Saskatchewan, Manitoba, Ontario, Yukon and Nunavut. On July 1 of this year, the Atlantic provinces will be added to that list as well.

Under the GGPPA, gasoline and diesel fuel used by farmers in eligible farming machinery such as trucks and tractors is already exempt from the carbon tax. In addition, the act provides an exemption for up to 80% of the carbon tax for natural gas and propane used to heat an eligible greenhouse.

But what the current legislation does not include is an exemption for natural gas or propane used for on-farm activities such as grain dryers and heating barns. This was a critical oversight which Bill C-234 seeks to correct.

Colleagues, as we all know, natural gas is a transition fuel. As Liberal MP Kody Blois, member for Kings—Hants, Nova Scotia, said in the other place:

 . . . at the time the Greenhouse Gas Pollution Pricing Act was developed, it seems as though there was not necessarily a lot of thought given to grain drying and, particularly, to barn heating for livestock. That is exactly what this bill tries to do. It would extend to what a number of policy-makers feel was a small oversight at the time of the original drafting of the legislation that brought the carbon price into force.

As senators know, the purpose of the carbon tax is to provide an economic incentive through a price signal to encourage people to shift their energy consumption from fossil fuels to other sustainable energy options. However, when it comes to agriculture, this poses a number of problems.

The first is that farmers have no viable sources of alternative energy for their agricultural practices. This is widely recognized, as noted by New Democratic Party Member of Parliament Alistair MacGregor at the House Standing Committee on Agriculture and Agri-food. He noted that:

We realize that a price on carbon is there to incentivize a change in behaviour, but it doesn’t work very well if there aren’t commercially viable alternatives available.

This is the first fundamental reality which underscores the importance of Bill C-234: The law currently penalizes farmers for something over which they have no control. They cannot shift their energy use away from fossil fuels because alternatives are not yet available. This makes the current situation punitive and fundamentally unfair.

It is recognized, however, that the current lack of renewable energy options for farmers could change. Research and development is already under way to develop renewable energy sources for farm production including biomass, geothermal, hydroelectric, solar and wind power. Although these options have not yet reached the stage of development where they are workable options to replace the farm use of fossil fuels, that day will come.

For this reason, the bill includes an eight-year sunset clause. On the eighth anniversary of Bill C-234 coming into force, the changes made to the Greenhouse Gas Pollution Pricing Act by this bill will be automatically repealed, reverting the legislation to its current state. If, however, the government of the day believes they should not be repealed, then the legislation allows both houses of Parliament to debate and vote on a proposed extension. This would remove the need to relitigate a similar piece of legislation if at the time it’s found that an exemption from the carbon tax on farm fuels is still needed.

The second reason the carbon tax imposes significant problems on farms is because farmers are price takers, not price makers. This is a long-standing and well-understood reality. Farmers must sell their production at the prevailing market price, and they have no control over that price. If their expenses are increased, they cannot pass those on. They must simply absorb them. This is the reality that farmers face today because of the lack of sufficient agriculture exemptions in the Greenhouse Gas Pollution Pricing Act.

Bloc Québécois Member of Parliament Yves Perron put it this way:

Without an alternative, if we impose a tax on these processes at this time, it would simply increase production costs and reduce farmers’ profit margins since they have no other options.

This, colleagues, is the current reality on farms which are located in federal backstop provinces and territories. Farmers and ranchers require propane or natural gas to dry their grain, irrigate their land and heat or cool their barns and greenhouses in order to feed Canadians and drive our export market. Yet, they are unable to pass the cost of the carbon tax on to consumers and are left to absorb the additional expense.

In April 2022, the Parliamentary Budget Officer estimated that the cost of the carbon tax on natural gas and the propane used in the agricultural sector in Alberta, Saskatchewan, Manitoba and Ontario would cost agricultural producers $235 million from 2020-21 to 2024-25. Over the next 10 years, this total will reach $1.1 billion. This has been corroborated by studies completed by numerous agricultural organizations.

The Agricultural Producers Association of Saskatchewan calculated the carbon tax at $50 per tonne to cost farmers between $13,000 to $17,000 annually, the equivalent of a 12% decrease in net income. At $170 per tonne, they estimated the carbon tax will cost a grain farmer $12.52 per acre by 2030.

The Keystone Agricultural Producers reported that Manitoba producers paid $1.7 million in carbon taxes related to drying grain in 2019. Examples include a producer growing 250 acres of corn spending $33,664 on propane to dry their crop with the carbon tax adding another $1,043 to their fuel bill, and a chicken farmer heating a barn from October 24, 2019, to January 21, 2020, spending $5,935 on natural gas with the carbon tax adding another $1,300 to their fuel bill or 22.16%.

The Grain Farmers of Ontario have noted that, under the current legislation, the tax credit returns less than 20% of the carbon tax cost. They estimate when the carbon tax reaches $170 per tonne some farmers could pay between $50,000 and $70,000 just in carbon taxes.

The Canadian Canola Growers Association calculated that the carbon tax would cost their industry $52.1 million in 2022 at $50 per tonne, and $277.9 million in 2030 at $170 per tonne. The cumulative cost of the carbon tax to the industry from 2022 to 2030 would be $1.429 billion.

Colleagues, input costs are the greatest expenses on Canadian farms. Farmers and ranchers are already judicious in their use of natural gas and propane on farms. Carbon surcharges on these fuels only serve to reduce the financial resources available for producers to invest in efficiencies that mitigate costs and reduce emissions, such as a more efficient grain dryer, precision agriculture equipment, solar panels, LED lighting, heat exchangers for barns or anaerobic digesters, to name a few.

Remember colleagues, in southern Alberta in particular, where farms are plentiful, it can get to minus 40 in the winter and plus 40 in the summer. It can be used not only for heating but also for cooling, especially when livestock are involved.

It is a well-known fact that farmers have a record of being environmental stewards and innovators. They have adopted new technologies and proven their ability to continually lessen their environmental footprint while increasing production and maintaining their competitiveness, without a carbon price incentivizing them to do so. However, without the changes introduced by Bill C-234, the carbon tax will extract hundreds of millions of dollars from the agriculture sector reducing the ability of farmers to invest in the capital-intensive innovations and technologies that drive sustainability and productivity gains.

This was an unintentional impact of the Greenhouse Gas Pollution Pricing Act, and Bill C-234 seeks to rectify this oversight.

This is not the first time the Senate has had an opportunity to address this unintentional impact. In 2018, the carbon tax was brought in under Part 5 of the Budget Implementation Act, in Bill C-74. It was the Senate that was able to conduct a more in‑depth study in how this affected agriculture. Unfortunately, this was not addressed as the legislation was pushed through the Finance Committee very quickly in the context of an omnibus bill.

Subsequently, our House and Senate colleagues similarly sought to correct this omission through Bill C-206, which was put forth by MP Philip Lawrence. As some of you may recall, it was also attempted by our former colleague the Honourable Diane Griffin. Her bill sought to amend the Greenhouse Gas Pollution Pricing Act to modify the definitions of “eligible farming machinery” and “qualifying farming fuel.”

Colleagues, here we are today with an opportunity to correct a lapse in the law that is now affecting the core of our agriculture system and, essentially, our food supply. Canada’s farmers sit at the heart of an agri-food system which contributes nearly $140 billion to our economy annually and provides one in nine Canadian jobs. Agriculture is an international success story in terms of productivity and innovation, but requires a policy environment that enables our farms to thrive.

This bill is not about whether you like the carbon tax. Although Conservatives are opposed to the carbon tax in principle, the NDP, Bloc Québécois and the Green Party fully support it. Yet all these parties voted in favour of this bill, along with a number of Liberal members including the chair of the House Standing Committee on Agriculture and Agri-food, the committee that studied this bill.

This bill is not about politics, it is about Canadian farmers. It’s not about removing the carbon tax or diminishing its effectiveness. It’s about making sure the carbon tax is equitably applied and does not harm our agriculture industry.

Colleagues, the scope of this bill is narrow and targeted. It expands the existing list of “eligible farming machinery” to include property used for the purpose of providing heating or cooling to a building or similar structure used for raising or housing livestock or for growing crops and drying grain. Secondly, it expands the definition of “qualifying farming fuel” to include marketable natural gas and propane.

These are reasonable, moderate and necessary changes, and are badly needed and broadly supported across the agricultural sector. Here’s what agriculture organizations from across the country have had to say about the need and value of Bill C-234.

The Agriculture Carbon Alliance, known as the ACA, is a coalition of 15 national farm organizations representing more than 190,000 farm businesses. I was shocked that there were that many farm businesses in Canada. Agriculture Carbon Alliance members include members of the Canadian Canola Growers Association, Canadian Federation of Agriculture, Canadian Cattle Association, Grain Growers of Canada, Canadian Pork Council, Chicken Farmers of Canada, Turkey Farmers of Canada, Fruit and Vegetable Growers of Canada, Canadian Hatching Egg Producers, Canadian Forage and Grassland Association, National Sheep Network, National Cattle Feeders’ Association, Dairy Farmers of Canada, Canadian Seed Growers’ Association and Mushrooms Canada.

The Agriculture Carbon Alliance said:

As a national coalition of industry-wide farm organizations, we are focused on prioritising practical solutions to ensure our farmers and ranchers can remain competitive and utilize the tools available to them where no alternative fuel sources exist. . . . This Bill will provide economic relief for our members, freeing up the working capital they need to implement environmental innovations on farm.

By adopting policies that enable producers to remain competitive, they will be able to further their investments in the sustainability of their operations, which will augment the sector’s potential to further lower emissions and sequester carbon.

The Canadian Federation of Agriculture stated:

Producers across Canada are working every day to improve the sustainability of their operations. This continuous improvement is reliant on the commercialization of new viable on-farm technologies that come with significant capital expenses. This proposed legislation helps ensure farmers have the capital needed to make those investments and continue to realize the sector’s potential as climate solutions-providers.

The Chicken Farmers of Canada stated:

Canadian chicken farmers constantly advance our operations in order to improve bird health and welfare, and to ameliorate environmental stewardship and sustainability on the farm. Through the implementation of good production practices, chicken farmers are taking steps to ensure that our sector is environmentally sustainable for decades to come. We look to our partners in government and in the House of Commons to provide legislative and financial support for farmers so we can keep feeding Canadians.

The Canadian Pork Council stated:

Having barn heating costs subject to the carbon price is especially challenging for producers given that they are responsible for the welfare of their animals. In Canada’s climate, producers have no choice but to manage the temperatures in barns to ensure the care of our animals.

The Grain Growers of Canada:

Canada’s grain farmers welcome the introduction of this bill and appreciate the exemptions included for critical on-farm activities — including grain drying. Through this relief from the carbon tax, our farmer members would have additional capital to invest in innovative technologies and sustainable practices that reduce emissions.

Canadian Hatching Egg Producers stated:

Canada’s hatching egg farmers represent an important segment of the poultry industry. Our farmers work hard to be at the forefront of innovation for sustainability while striving for efficiency at every opportunity. Bill C-234 will provide necessary support on farms to help alleviate financial pressures and ensure capital is available to reinvest in our farm operations . . . .

Canadian Canola Growers Association:

Canola farmers are committed to a sustainable future and have established production goals to support that commitment. I have made investments on my farm to retrofit my natural gas grain dryer, making it more energy efficient. While this is an important step, farmers today simply do not have viable fuel alternatives available for drying grain, which is why Bill C-234 is so important.

That’s from Mike Ammeter, Chair of the Canadian Canola Growers Association.

The Canadian Cattlemen’s Association:

Beef farmers and ranchers are continuously looking at ways to environmentally improve operations and further contribute positively to Canada’s climate change objectives.

Colleagues, you see a trend in all of these. They want to take these savings and make their systems better. He went on to say:

Bill C-234 will provide the much needed exemptions for critical farming practices including heating and cooling of livestock barns and steam flaking.

The Fruit and Vegetable Growers of Canada said:

Canadian fruit and vegetable growers are committed to being a part of global climate solutions and the sustainability of their operations. We believe the support for farmers found in Bill C-234, will incentivize continued innovation, and recognizes that farmers need a range of feasible fuel and energy options. Ultimately, this will benefit the entire food value chain, including Canadian consumers.

Colleagues, Bill C-234 is critically necessary for Canadian farmers who are essential to our food supply and security and also builds on the multi-party support that Bill C-206 received in 2020 and 2021. I ask for your support, colleagues, for this legislation at second reading, and look forward to hearing directly from stakeholders at committee. Thank you.

Thank you, Senator Wells, for your speech. You make some important points about the unique nature of agriculture in relation to the use of fossil fuels. The value of a carbon tax is greatest when it has few exemptions. My question with respect to the issue of agriculture being price takers is that prices go up and they go down, of course. Sometimes world prices go up to a point where there are windfall profits for farms, and sometimes they go down to the point where farms are at jeopardy of going bankrupt.

The traditional remedy for these kinds of problems in economics is price and income support. Why don’t we look to that kind of protection, if I can put it that way, rather than fiddling with a carbon tax and creating a carve out that might distort incentives away from our combined and collective goal of reducing carbon emissions?

Thank you for that question, Senator Woo — it’s a good one. I don’t look at this as a carve out. This is an expansion to the exemptions that were provided in an earlier act. I think there was an oversight and, in fact, the chair of the House Agriculture Committee noted that, that this was an oversight. In fact, he supported this bill in the House.

This is also part of a program for farmers. I don’t think they want subsidies. Perhaps they will take them, but I think they just want a business that works for them and, where eligible, expenses at times when there are alternative fuels or alternative processes, they will use those. Right now, there are no alternative fuels or processes besides natural gas and propane, which are both, as you know, considered transition fuels.

They want to get better, but that’s why there’s a sunset clause on this. It would have to be considered to be renewed; it’s not ongoing. It automatically cancels after eight years.

Canadian farmers, growers and ranchers want to get better. They’re part of the solution in the environmental debate. I think this exemption simply expands where an oversight occurred in the earlier legislation.

Thank you for the explanation. An expansion of an exemption is another word for a carve out, of course, but I appreciate that that’s what you’re looking for.

Your argument that increasing or preserving the margins of farmers so they can spend surpluses on innovative and less carbon-intensive technologies has a logic to it, but the point is that you need some kind of incentive for them to do that. There’s no guarantee that farmers will use the surpluses, fungible as they are, for that particular task.

Again, there are other tools by which we can incentivize farmers to use geothermal and solar and whatever else might appear, and this is through the means of direct incentives for those technologies.

Why are we not considering these other pathways that, on the one hand, are consistent with the universality of a carbon tax, recognizes the fluctuations, incomes and prices that farmers inevitably face, but also focus on incentives for specific carbon‑reducing technologies that may be available in the years ahead?

Thank you for the question, Senator Woo. I’m sure those incentives are already there for migrating to alternative sources of fuel that have carbon neutrality, like geothermal, solar and wind, but we’re not there yet. We may be there in some small-scale operations, but we’re not there on an industrial scale.

Canada, among most countries, is a world leader in industrial farming. These are industrial-scale operations that don’t yet enjoy the benefit of geothermal and all the other things that may occur in the future through innovation, investments or other technologies, but this is what we have. The carbon tax is relatively new, and the industry has not caught up to it.

One day, it would be great if these industrial processes were carbon neutral. In regard to on-farm, I still push back on your claim that this is a carve-out because the system already exists where there are exemptions. This is just adding to those exemptions. We will agree to disagree.

This is further assistance for the ranchers, growers and farmers to reach where they need to be.

Thank you for sponsoring this bill, Senator Wells. It’s such an important bill for people in my province of Saskatchewan and farmers all across Canada.

Canadian farmers are stewards of the land; they are extremely innovative in environmentally friendly practices, and they have been for decades. This is partly a result of their desire to preserve the land, but another part of the reason is to keep costs low. I was looking back at a 2020 tweet that I put out about grain drying and agriculture, and I used the example of Kenton Possberg from Humboldt, Saskatchewan, who had sent me his grain drying bill — his SaskEnergy bill. For the carbon tax, he was billed almost $3,000 for one month of grain drying his crop; GST was added to that amount. I have heard that this was not even that exorbitant of a figure compared to some other farmers’ experiences. That was a few years ago.

Despite their promises to cap the carbon tax, the Trudeau government’s carbon tax has continued to increase, and it will continue to do so. The cost now is even much higher than at that point.

I also want to mention that food inflation has led to higher prices at the grocery store for all Canadians. At a time when so many Canadians are struggling to put food on their table and food bank usage is at an all-time high, Canada’s farmers need this carbon tax exemption in this bill in order to help their farming operations be more viable.

I would like you to explain further so that all Canadians understand how this impacts them, as well as how Canadian consumers need this exemption to make food costs at their grocery stores much more affordable.

Thank you for your question, Senator Batters. If I make this an argument over the ills or gains of the carbon tax, then I will quickly lose the argument in this room.

Yes, obviously, providing farmers with a better margin on their work would be better for the farmer. Senator Woo mentioned that prices increase and prices decrease; that is true. It seems that for our plates, right now, the prices are increasing. I don’t know if the farmer benefits from those increased prices because the prices are increasing for the farmer, as well as for growers and ranchers — when I mention one, I mean them all.

This is simply for on-farm equipment like barns — where cattle have to live in the winter and the summer — for drying grain, as well as for all of the necessary things for which there is currently no alternative machinery and no alternative fuel. That is the essence of the bill. It is to provide that, and to provide time for the farmer, rancher and grower to come up to speed by purchasing, developing and innovating technology. This “carve‑out,” as Senator Woo so incorrectly puts it, gives them time to do it.

I guess I was just reinforcing the point you made that farmers are price-takers, not price-makers. If they have increased costs because of the carbon tax increasing, as well as GST on the carbon tax and all of that, they have to pass that cost along in order to remain a viable operation. The cost, of course, is passed on to the consumer at the grocery store because groceries do not fall out of the sky. Groceries come from farmers, generally, at one point or another.

As a result, given that grocery store prices are continuing to increase — perhaps inflation is flattening a little bit, but it is still a very high rate — could you tell us a bit more regarding how the food that farmers produce, whether that be grain, cattle or chickens, results in higher costs at grocery stores?

Thank you again, Senator Batters.

In regard to farmers, ranchers and growers being price-takers, their markets are commodity markets. For the price of hogs, wheat and all of these things, they have no say like in the grocery store. The grocery store owner might charge a specific price for a can — whatever it is — because they have the choice to do that. The farmer has no choice. Any price differential wouldn’t happen in that year; that would happen in the next year. But when you look at it, there are so many things globally that account for a price, such as droughts in different areas of the world and flooding in other areas; there are so many things. The farmer gets what the farmer gets. They do not have a great deal of choice.

It is absolutely passed on to the consumer. The consumer is the one who pays for the end product regardless — which gives even more credence to the necessity for farmers to have as much margin as they can in order to invest in things that they know they will need to invest in. It is only becoming more costly; it is not becoming less costly, especially with the price of fuel and the price of equipment — this goes directly to that — for which there are no other alternatives, both in fuel and equipment.

Senator Wells, would you take a question?

I certainly would, Senator Quinn.

Thank you so much for a very informative speech. It underscored the importance of the issue being dealt with. In regard to the people that I have been meeting with from the various associations that I have talked to, the one thing that has stood out to me — in relation to other discussions that have happened here around the agricultural industry — is food security. You alluded to food security in your speech, and it resonated with me. I’m somewhat concerned that the farming industry — as price-takers — is continuing to face challenges such that the next generation has less interest in taking over, or becoming involved in that business, which backs into the question of food security.

I would suggest that we could wait to see what other approaches could be taken, but given where we are in our particular point in history within the agricultural business — with food security and the prices that my honourable colleague just talked about — does it not make sense that this oversight be corrected through the expansion of the exemptions? I agree that this is the right language.

At some point, I will have a great discussion with Senator Woo about carve-outs — maybe over a roast beef or something.

In any case, I want to get your opinion on this question: Should we not be concerned more about food security, as well as the ability of the current generation and the next generation to enter into the business?

Thank you, Senator Quinn. That is an excellent question. It is a trend that we’re seeing. There are fewer family farms because it’s hard to make a go of it on that small scale — on the family farm scale, or even the small industrial scale. We do see, especially across the Prairies — and we see it within the fishing industry in Atlantic Canada as well — the larger companies that have economies of scale buying up smaller farms, or smaller operations, because they can have a better margin. However, it is still difficult. I cannot think of anything in the food supply chain that is decreasing in price; nothing comes to mind.

It is a really important point. If there are fewer and fewer farm operations, it becomes closer and closer to monopolistic tendencies where the consumer will have no say in the price. They will simply be in a position to take it or leave it, whether it’s the consumer or the value-added consumer companies that put value into grain or cattle.

I agree with you; it is untenable, and any time you increase the price of something that is already on dangerous ground, it doesn’t make it any better.

Would Senator Wells agree to take a question?

Absolutely.

Thank you, senator.

I have two questions, but I will wait for the second round for the next one.

The first question is about the — if I read the bill properly — carve-out, to use an expression, which I think is rather proper. The carve-out is good for 8 years, but it can be extended by the government afterwards if it believes that it should be extended for another 8 years or 10 years or 20 years.

Don’t you think it would be better if the bill also provided that the government could reduce the eight years, which has been provided here, if next year or two years from now there are technology advancements that make it interesting to use another technology and, instead, use something else based on solar power or wind power, other than natural gas or propane, to dry the grain, for example?

Thank you, Senator Dalphond. That is an excellent question, and, of course, any government can do anything it wants, as long as it has the will of the chambers.

This is established at eight years in this bill. Of course, the government can extend it, but a government can also repeal it or make an amendment to make it six years or make it any number of years.

I didn’t hear what you said, but any amendment can be made to any existing legislation.

Senator Wells, will you take one more question from me?

I will, Senator Cotter.

Thank you.

I thought this was an important bill for you to bring forward, and I think we are all appreciative of it, particularly for farmers who have real challenges in producing food for Canadians and the world market.

I appreciated your observation that this was really not a political point, although, with the greatest of respect, I thought Senator Batters evolved it a little bit in that direction, as she has on occasion done here.

Let me make a statement, which is that your point about price takers also means, in some respects, that they have to take the price in the market, and they are not the ones driving up grocery store prices, because that is part of what they take rather than influence.

One of the strategies around carbon pricing is to try to incentivize people to make other choices. It is clear that is a real challenge for farmers in this context, but removing this from the carbon pricing regime does kind of disincentivize that direction. Whether you are enthusiastic about carbon pricing or not, it is trying to use market-based tools to incentivize.

Do you have suggestions? Are there other options that can generate that kind of incentive in this area so that we will actually end up with successes, say, adopting this but doing some other things that can inspire hog producers and grain farmers in their initiatives?

Thank you, Senator Cotter, and you are right. There are other things that can be done. There could be a rebate on equipment that is done towards moving away from technology that requires fossil fuel. There are also programs for that.

The idea is not for the farmers and growers and ranchers to take the margin and run and go, “That’s great; we have this.” Each of the ones I quoted has said, “Our plan is to use this to invest in innovative technologies, something different.”

If it wasn’t the case, I wouldn’t say, as I did a number of times in my speech, that there are currently no alternatives that are market-ready in either equipment or fuel.

That natural gas and propane are transition fuels is very positive; it is not coal. If you said, “Okay, we won’t give you a benefit for using natural gas or propane,” if there’s still a penalty, they are going to choose the cheapest fuel they can, which, in many cases, is coal and oil.

Will Senator Wells take another question?

Absolutely, Senator Gagné.

Thank you.

I was raised on a farm, so I have a good idea of the challenges farmers face. I understand the complexities.

I was wondering, Senator Wells, if you are aware of the fact that Bill C-8 proposed and implemented a refundable tax credit for farm businesses operating in backstop jurisdictions starting in 2021-22.

There have been some concerns raised that with the adoption of this bill, Bill C-234, this would result in a double compensation of farmers that could result in further complexities, such as clawbacks. Therefore, I’m wondering whether you have any comments, and if you think the Standing Senate Committee on National Finance could lend its expertise or perspective on this matter.

Thank you, Senator Gagné.

Of course, you can’t double-dip on a benefit, whether it is a rebate or an exemption. If you are rebating, you can’t be exempted. If you are exempted, you can’t get a rebate, and that is built into the system. That is a policy decision by the Canada Revenue Agency. That doesn’t need to come through legislation. The ability for them to do that — by directive of their minister — is already there.

I think it is up to the will of the chamber if this goes to committee, and if it does go to committee, where might it go? If it is a question of taxation, it may go to the National Finance Committee. If it is a question of something specific to farms, it may go to the Agriculture and Forestry Committee. I don’t know; I would leave that to the will of the chamber.

But for exemptions and rebates, it is one or the other, and I think that is well recognized.

Senator Wells, will you accept another question?

Yes, Senator Dalphond.

There is only five minutes left.

My first question was really about the power granted to the Governor-in-Council to extend the date, but there is no such power granted to the Governor-in-Council to shorten it. You said, “Well, you can amend the law.” To amend the law is an interesting exercise.

My question is the following, and it follows on the questions from Senator Gagné.

We know that, based on the carbon tax, every year the government will make a calculation of what the farmers are going to pay for the tax on carbon in Saskatchewan, and that becomes the pool for Saskatchewan that is going to be divided, at the end of the year among the farmers of Saskatchewan, based on the costs of operating their farms, not the cost for propane and not the cost for natural gas.

Are you saying that if this bill comes into effect in June of this year, the amount that was set aside for the farmers of Saskatchewan in January and that has to be shared among the farmers will no longer be shared or that it will still be shared? And if it will still be shared, I don’t understand why the farmers have to gouge their price to get the higher price. They can get the tax back.

I want to understand the logic of the arguments, because I fail to understand it.

Thank you, Senator Dalphond.

I don’t think I said, and I don’t agree if you said, that the farmers will gouge the price up and that they will share in those spoils.

This is simply an expansion of the already-existing exemption for equipment or fuel that doesn’t exist. If you have a grain dryer, and it is powered by natural gas or propane, this would allow that to be exempted from the carbon tax. If there is something that does exist on an industrial scale — and we hope that exists within the eight years — then that would qualify.

I don’t know if this is answering your question. The other part is that we know that laws can be repealed. We spent the first two years of the Trudeau government repealing laws, and this can happen to that. We can amend it from eight years to six years, depending upon not just the available fuels but the available equipment on an industrial scale out there. I think farmers know best. I’m not a farmer, but I think they know best when they say, in consultation in the development of the bill with former Senator Griffin; MP Philip Lawrence; and MP Ben Lobb, who sponsored this bill — people who are familiar with the farming communities and heard from the ranchers, growers and farmers in developing this — that eight years seems a reasonable amount of time. If it is to be extended, that is the will of the chambers.

That is where I would go with that.