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Greenhouse Gas Pollution Pricing Act

Motion in Amendment--Vote Deferred

December 7, 2023


Hon. Yuen Pau Woo [ + ]

Therefore, honourable senators, in amendment, I move:

That Bill C-234, as amended, be not now read a third time, but that it be further amended, in clause 2 (as amended by the decision of the Senate on December 5, 2023):

(a) on page 2, by replacing line 23 with the following:

“into force on the day that is the third anniversary”;

(b) on page 3, by replacing line 6 with the following:

“third anniversary of the day on which this Act”.

The Hon. the Speaker [ + ]

I just wanted to mention that on debate, I have Senators Ringuette, Lankin, Dalphond, Wells and Plett.

Honourable senators, I rise today to speak to Senator Woo’s amendment. I hope you have verified the facts that I previously highlighted regarding the climate change costs to our economy and our health care system, among many other costs inherent to carbon emissions — because I have more facts tonight.

At the outset, I want to say that I have always been a strong supporter of farmers all my life, whether in the Legislative Assembly of New Brunswick, in the House of Commons or here. The increasing farm operation costs by carbon pricing on natural gas and propane are marginal. According to the Parliamentary Budget Officer, or PBO, the cost of heating and drying fuels for the average Canadian farmer, including the carbon pricing, represents 0.8% of their overall expenses — not even 1% of total operating expenses.

I would say that given the cost of carbon emissions on our GDP, this less than 1% is truly very marginal to the cost of climate change damaging everyone, including farm operations. It’s like the chicken and the egg question.

Do we marginally increase costs to reduce farmers’ emissions and their spiralling greater costs of climate change events? To me it is clear. The sooner we reduce emissions, the sooner we reduce climate change events and costs to all of us, including and particularly our farmers.

Honourable senators, our PBO has issued two different reports on carbon pricing. The first one was on June 15, 2023, in which he estimated the foregone revenue from carbon levy to the agriculture sector that is the current exemption for gas and diesel. For this year alone, the exemption for the agriculture sector is $595 million, and it will reach $1.562 billion by 2030. That means that the cumulative current exemption from this year to 2030 amounts to $8.622 billion.

It is unfortunate that our Agriculture and Forestry Committee did not investigate this PBO report during their hearings. This exemption represents 97% of total fuel used by our farming sector. You will agree that this exemption for farmers is very generous compared to all the other economic sectors of our country — particularly, I would say, for the farmers in Quebec and B.C.

The other PBO report, of September 15, 2023, provided the cost estimate for carbon pricing by Bill C-234. Some people referred to this report many times in this debate, saying that the cumulative cost to farmers would be $1 billion. The exact number in the PBO report is $979 million. But what I find somewhat disingenuous is that this is only half the equation. They completely sidetracked the 90% rebate associated with the above carbon pricing for propane and natural gas.

In fact, when you remove the 90% rebate from the carbon pricing on propane and natural gas, the actual cumulative rebate over the same period reaches $881 million. Therefore, if you take the cumulative cost of $979 million less the cumulative rebate over eight years, it is equal to $97.9 million. That is $122,375 per year for all of Canada’s farmers.

Considering that in Canada — notwithstanding Quebec — there are 151,805 farm operations, that represents an average net cost of $806 per farm per year. These are the facts as per the PBO report. Do not be sidetracked by not looking at the entire picture.

Again, honourable senators, I will try to separate facts from myths regarding the arguments that have been heard so far.

The Greenhouse Gas Pollution Pricing Act created different schemes of charging for emissions as per the economic sector that you operate in. There is one for us, individual consumers. There is one for the industrial gas emissions based on carbon dioxide tonnes that can be part of the trading system for industry and another one for other operations, such as farm and commercial fisheries.

The act also provided for the provinces to create their own scheme — which was the case for my own province, until July 1 — that would relate to their own emissions situation and targets, as Quebec and B.C. did.

Last week, I had many conversations with farmers in my area who grow grain as part of their rotation crop. They confirmed the costs of a silo for grain drying at $200,000, a combine around $700,000 to $1 million. A 500-horsepower tractor is $600,000. A potato harvester is $2 million. Given the price of these other pieces of farm equipment, all things being relative and equal, a grain dryer in these operations is a very low-cost piece of required equipment.

I also asked if they were drying on farms or commercially. Even with the low equipment costs of a grain dryer, they are using the regional commercial dryer in Grand Falls. My next question was: Why a commercial dryer? The explanation was the commercial dryers are on a need-to-use basis, as they also provide storage and shipping facilities.

With climate change, floods or drought — one never knows — the drying of the grain may or may not be required. It’s on an as‑needed basis. That’s the purpose of the commercial dryer.

Colleagues, that leads me to believe that the 60% to 65% of grain drying done in Ontario commercially is because it is most cost-efficient for the farmers. I cannot say regarding Manitoba, Saskatchewan and Alberta because I never saw any data pertaining to these provinces.

On the argument that there is no alternative to natural gas and propane, I was told by my farmers that the heat generated by cows either in a dairy farm or a beef-raising operation is minimal because of the heat that the animals generate themselves within that quarter.

I will also state — and Senator Mockler could confirm this — we have a local milk producer who, over 12 years ago, installed a biomass operation from the methane his operation generated, along with other farm waste, to generate electricity. He generates so much electricity that not only does it cover his operations, he is also selling it to the New Brunswick grid. This has been happening for 12 years in the small community of Saint-André, New Brunswick. There are alternatives.

If you want to reduce your operation costs, your climate change costs and reduce emissions, the current carbon pricing and rebates for farmers is balanced to incentivize cleaner technologies that are available. The rebates, designed to return 90% of the pricing, compensates farmers for the cleaner technologies they already have invested in, like my milk farmer in Saint-André.

The Fall Economic Statement announced that we will have upcoming legislation regarding clean economy investments as follows: carbon capture utilization and storage; clean technology; clean electricity for non-public and for public-owned entities; an investment tax credit to support using biomass to generate heat and electricity — these credits will be between 15% to 30% of the cost of going to biomass. These are upcoming measures that will benefit farm operations using their biomass.

In conversation with the New Brunswick chicken producers and transformers, they tell me that, if they have a three-year pause — and with this new tax credit to convert to biomass — they can convert their operation’s energy needs to biomass within 12 to 18 months. So it is possible, colleagues.

Moving on to another cost question, how do our carbon pricing emissions compare to other countries? In 2023, the European countries are charging €100 per tonne of carbon dioxide, which is equal to $147.64 Canadian. For the U.K., the latest information I could acquire was from 2021, but it was equivalent to $141.60 Canadian. That was two years ago. For comparison then, Canada’s 2023 carbon pricing per tonne was set at $65. The Canadian carbon pricing is 44% less than in the EU, where we have trade agreements, and 46% less than in the U.K.

Honourable senators, I hope that I have not bored you with all my fact-finding research. It was important to me, important for my own knowledge and for my own opinion-making on this bill, and it was important to share with you because we don’t all have that time. I understand that.

For all the above reasons, and as a compromise — and considering the major biomass program in the Fall Economic Statement — the three-year period amendment proposed by Senator Woo is a reasonable and reasoned amendment that certainly makes common sense to me and the farmers in my area. If we don’t do this, we’re only saying, “Don’t go to biomass; don’t use new technology; don’t look at the future; stay behind.” I urge you, senators, to adopt Senator Woo’s motion.

Thank you.

Hon. Pierre J. Dalphond [ + ]

Colleagues, I rise to speak briefly in support of Senator Woo’s amendment. He expressed arguments in favour of this amendment in a very clear manner and I thank him. I would like to add that, in my view, his proposal makes even more sense today than at committee where it was defeated by a tie vote.

Why? Because, since the end of our committee study, many important developments have occurred that call for this amendment in addition to the valid arguments that Senator Woo raised at committee and earlier tonight. I recognize I’m not an expert in agricultural finance. He is the expert. I defer to him. But I thought the arguments were quite convincing.

First, on October 26, the Prime Minister announced a three‑year exemption on the price on carbon for home heating oil. Though it is often described as “the Atlantic exemption,” we know now, thanks to Senator Ringuette, that it will affect more households in Ontario and elsewhere in Canada than the Atlantic provinces overall. Like I said in my third reading speech, I was rather puzzled by this announcement when it was made. After some research, I now understand that at current prices, it can cost four times more to generate the same amount of heat with oil compared with natural gas, and that the price of oil has increased significantly over the last few years — contrary to the price of natural gas, which went down. Finally, this expensive source of energy is mostly used by low-income households.

As Senator Ringuette previously illustrated, this exemption is not targeted at one region — it’s targeted at a group of people who are using a product where the price went through the roof over the years and who are financially unable to adopt an alternative without some assistance.

It is also very important to remember that it is a three-year exemption and not an eight-year one, and without the easy extensions we find in Bill C-234.

As to the second development, since our committee study, the government has repeatedly said they’re not open to further exemptions to the price on carbon. The government has also reaffirmed its strong commitment to the policy of a price on carbon and to doing whatever is necessary to meet Canada’s undertaking under the Paris Agreement. We also know that the Bloc Québécois and the NDP share a commitment to Canada’s climate plan and reject an “axe-the-tax” approach. This position does not exclude some exemptions to deal with dire situations, if proven.

Third, on November 6, the House of Commons defeated a Conservative motion calling for an exemption for all home heating fuel. Senator Woo referred to it briefly. Why should we have a bill that provides an exemption for heating all kinds of barns and farm buildings, including for those farmers operating in supply management systems that guarantee them a good income, while refusing a similar exemption for all home heating? I think it’s a good question. As I asked at third reading, are cows and hogs more valuable than humans?

Furthermore, it would be illogical to adopt a bill that proposes exemptions for heating all kinds of farm buildings for a minimum of eight years while there is only one exemption currently, which is for homes using heating oil and limited to three years. I don’t see the logic behind eight years for farm buildings but three years for the poorest people in the country using that type of heating system.

Fourth, last week the House of Commons defeated another Conservative motion. That one more or less ordered us to pass Bill C-234 without amendments in the midst of our review. Conservative MP Adam Chambers stated to the media, just before entering the Conservative caucus, that senators should go back to “. . . what they’re good at, which is being invisible . . .” Obviously, he ignores the new reality of this place. We don’t intend to be invisible, sir, and we are ready to do our constitutional duty of providing sober second thought in connection with all kinds of bills, whether from the Conservative Party or the government.

But we are also mindful of our role to propose amendments when we consider it appropriate, while leaving the final say to the elected MPs. This is the proper functioning of Canada’s Parliament. To quote the late Senator Shugart, “We are very familiar with the fact that our role calls for some restraint.”

In the end, the return of Bill C-234 to the other place will invite all MPs, including Liberals and ministers, to revisit the issue of exemptions and put in place a coherent approach in matters related to them.

Incidentally, this is also the goal of the motion tabled two days ago by our colleague Senator Bellemare. In her speech on Bill C-234, she urged all of us — including the provinces, the federal government and all stakeholders — to act together in the pursuit of solutions to the climate crisis. We can only get through that crisis, which is linked to our own survival, by acting together — not by threatening to not implement laws that have been federally adopted by this Parliament, or having states that are becoming rogue provinces and provinces that are becoming rogue states by refusing to implement laws that were constitutionally adopted.

If we have the will and can work together, as she suggested in her motion, then we can expect to meet our undertakings under the Paris Agreement. We will have a coherent policy and a strict price on carbon, with exemptions designed to give relief to those who are in absolute need of it, with a multiplicity of programs put forward by the federal government and the provinces to assist everybody in a green turnaround. That’s the only way we can do it.

I know some farmers need assistance. I know they are oversubscribing to all of the programs that have been put forward so far by Agriculture Canada. I know they are willing to embrace changes because, as Senator Cotter said, they are the stewards of the land. They want the land to survive, they want to survive and they want to help keep us properly fed. But we all have to work together and not try to seek out how to escape the burden carried by others. We should all be sharing the burden and working together to achieve these goals. Thank you very much. Marsee.

Hon. David M. Wells [ + ]

Honourable senators, I was going to ask Senator Ringuette a question because she spoke so glowingly about how farmers are so well off that you’d think they love the carbon tax. I was going to ask her if she had ever met a farmer who wanted and enjoyed the carbon tax. During this whole process, for months upon months, I’ve heard from farmers, ranchers, growers and grain dryers who don’t want the carbon tax. I haven’t heard one — and I’ve had a lot of outreach — who said, “You know what, Senator Wells? I love the carbon tax. Let’s keep that going.” Perhaps I should have asked some farmers from New Brunswick. I would have had a different response, certainly.

We also heard from Senator Woo, who gave great credit — and rightfully so — to Senators Arnot and Cotter, who gave great speeches — probably the best speeches on this topic. You would think that he was using those two great examples to support his cause. Of course, they are against his cause. They are against the carbon tax on farmers, growers and ranchers.

Colleagues, I want to go back to how we got to eight years on this bill, which was introduced here in the Senate some months ago. I mentioned it in one of my earlier speeches — again, I don’t remember which one — but it was suggested by NDP member Alistair MacGregor at the Agriculture Committee in the other place. The proposal in the original bill was for 10 years, and he suggested it go down to 8 years. There was no debate at committee on that in the other place, and they all agreed that eight years was fair.

Aside from what the other place voted, with four parties in majority and one party in some, now we’re hearing from Senator Woo that not 10 years, not 8 years, but 3 years is fair.

I’m going to comment on two things there. One — and I know I spoke about this before — I was at a canola event. I spoke to one farmer there, and I brought it up here in the chamber. They have a farm about an hour north of Ottawa. They were excited because they were going to buy their own dryer to dry their own grain, rather than send it to just south of Ottawa, in North Gower. They would save on trucking. They would save on batch amounts having to go, versus doing it on their own farm, when they needed it. It would also increase employment on their farm. And, finally, they wouldn’t be paying the carbon tax that commercial dryers pay. They would be exempt from the carbon tax. Perhaps under this bill, they will be still, but it holds the same for farmers and ranchers and growers who do barn cooling and drying and have greenhouses.

They were excited because they wouldn’t have to pay the carbon tax. They could control the flow of their drying, rather than batch by batch, and they wouldn’t have to pay trucking charges. There were significant savings, even more than just savings on not having to pay the carbon tax. They were talking about a 12-year payback period. I said, “How long will it take?” They said, “It will take us 12 years, but we’re excited about doing it.” Colleagues, I don’t know if they would be as excited today.

Senator Wells [ + ]

My next point addresses again some of the statements in one of the speeches. Senator Ringuette said that 90% of the carbon tax payout was rebated. I know this is false because I’ve seen the bills from farmers. One of them said to me — and I know I mentioned this in one of the amendment debates — that they had a carbon tax bill of $153,000 in one quarter. Their rebate was $53,000. I would take the carbon tax over that rebate any day.

Of course, we know, if the carbon tax were exempt on propane and natural gas, there wouldn’t be a rebate. There would be no double-dipping, as suggested by some others in earlier speeches.

Colleagues, we know the rebate is unfairly applied because it doesn’t just go on fuels on-farm; it goes on all costs. Even ranches that don’t use propane or natural gas, which do not have exemptions — let’s say they use dirty oil or diesel — they would get the exemption, but they would also get the rebate. There’s a clear inequity and an unfairness in that.

Senator Woo, in his amendment, has anchored the three years to the announcement that the Prime Minister made some weeks ago on homes that heat with oil. You know what? That would make sense if that were the only comparator. But someone heating a home with oil — which we know is very few in Canada, but a lot in my province of Newfoundland and Labrador. In fact, my previous home was heated with oil. That was our only choice unless we changed out our system.

Farms that heat with oil have an exemption. Farms that heat with propane and natural gas do not have the exemption. That was the essence of the bill that came to us. I don’t think it’s fair to make the comparison. You can anchor it to what you want, but I don’t think it’s a fair anchor when you’re talking about homes that heat with oil in a very small part of the country — well, a large part of the country but a small percentage of the country. The more fair comparison is to compare it with other farms. Why wouldn’t you anchor it to other farms?

Colleagues that brings me to my final point. On the CRA website — and I’ve talked about this before — it says exemptions are built into the carbon tax, into the carbon pricing program. In fact, on the CRA website, they call it the fuel charge relief. That’s another way to say an exemption on carbon tax. There are seven exemption categories under the fuel charge relief, from fishermen to other on-farm things, specifically for oil and diesel. There are seven.

Unfortunately, farmers who use propane and natural gas aren’t one of the seven. We wanted to add this. We had an initial proposal of 10 years; it went down to 8; and now it’s proposed to go down to 3. But for every other exemption category — except the one the Prime Minister announced last month — there is a note, and I’m reading right from the CRA website, which says, “A fuel charge exemption certificate does not have an expiry date.” It’s not 3 years; it’s not 8 years; it’s not 10 years. It’s for as long as there’s a carbon tax.

That is clearly unfair for anyone who has got a cap on how long they get the exemption. Why should it be different for a farmer than a fisherman? Why should it be different for someone who has a greenhouse versus a barn for keeping chickens warm in the winter and cool in the summer?

Colleagues, I will finish up there. Senator Dalphond also spoke about dire situations. The dire situations are those where people are losing money because they’re paying additional charges that may not have the desired effect.

Colleagues, if we are to be anything, let’s be fair. If we are to be anything, let’s ensure equitability for the people who grow our food. Thank you.

Hon. Donald Neil Plett (Leader of the Opposition) [ + ]

Honourable senators, I will be very brief, but I do want to say just a few words on the amendment. I will focus on the amendment, not like one of the previous speakers who spoke for 13 minutes, and I wasn’t sure whether she was speaking to the bill, whether she was speaking to the amendment or what she was speaking to. Then in the last minute and a half, she told us she supported this amendment.

Colleagues, I would encourage Senator Dalphond and Senator Woo, when they near their retirement age — I know they have a little bit of time left in the Senate — to offer to go and work in the agricultural industry. I’m sure every farmer in the country would love to hire them because they somehow know that all these problems the industry is having can be fixed, even though every expert in the country is saying it’s not possible. Yet here are Senator Woo and Senator Dalphond telling us that, listen, we know there’s technology out there, and it will be available for us in the next year and a half or two or three years. “If an expert is telling you it will take eight years and if a farmer is telling you it will take eight years, don’t believe them because we, in Montreal and Vancouver, in the cities, know exactly how long it will take, and it will take three years, so let’s reduce it.”

Amazing, gentlemen. Amazing. I really encourage you. I think there are people who would pay you millions to go out and advise them and consult with them and help them make the money that they so desperately would like to make.

But, colleagues, let me speak a little bit about the amendment. Indeed, Senator Woo, even though the amendment failed, has the right to make this amendment, as does Senator Dalphond. Even though his amendment failed twice, he still introduced it a third time. The third time’s a charm. I suppose if it had failed, maybe we would have had that one in some other form yet tonight.

Senator Yussuff seemed to indicate that although we had the right to make amendments, we should certainly defeat them here because they had been defeated somewhere else. I am certainly encouraged by the fact that Senator Yussuff will definitely be voting against this amendment because, indeed, it had been defeated at the committee. That’s really all the information Senator Yussuff needs.

Colleagues, the sunset clause in Bill C-234 was added at the committee stage in the House of Commons. It was initially proposed as a 10-year window and then reduced to 8 years after debate. Senator Woo now wants to change it from eight to three because he has the technology.

This amendment is ill-advised for two reasons: First, the amendment is not supported — some people would stop speaking now because they can’t speak when others are speaking, but I will just continue, and I will ignore the Leader of the Government and his partner while they continue to debate while I’m speaking.

First, the amendment is not supported by the evidence. There is no evidence provided at committee that indicated the sunset time frame should be changed from eight years to three years — none.

In fact, it was noted by Professor Lubitz, Associate Professor at the University of Guelph College of Engineering and Physical Sciences, that we’re looking at a minimum of six to eight years and perhaps longer. This is simply an associate professor at the University of Guelph College of Engineering. I’m not sure whether he has any information.

Obviously, he hasn’t talked to Senator Dalphond or Senator Woo or he would not have that opinion. Nevertheless, in response to a question from Senator Simons about whether certain technologies would be available within eight years, Professor Lubitz said, “For the technologies that are under development, it’s difficult to say.”

Professor Lubitz continued:

We mentioned the heat pump technology; we are looking at that. Others are working on biomass and other things as well. . . .

Senator Ringuette, of course, says that biomass will do quite fine.

Professor Lubitz continued, “One could argue some of these are close to being ready for small-scale, prototype, experimental use . . . .”

Perhaps it’s some garden operation close to where Senator Ringuette lives.

Professor Lubitz continued:

. . . but I think the big question is when will they be ready for large-scale deployment? I believe some of these will be ready within the eight-year window, but not in the next year or two. Our project will not reach that in the next year or two, but it has potential in the next six or eight years. . . .

Again, this is a professor:

Similarly, I’m not aware of other technologies that are ready for that large-scale deployment in the next year or two. It takes a long time to go through those steps to roll out and scale up. This is large infrastructure that takes a long time to build, test and build again.

Professor Singh, Senior Research Chair, Agricultural Engineering and Technology at Lethbridge College, echoed the uncertainty of Professor Lubitz by saying:

I don’t know if it takes three years or five years and if it’s available in a way that farmers can use. Maybe or maybe not. I’m sorry, I don’t have a clear answer . . . .

In their brief to the House of Commons Standing Committee on Agriculture and Agri-Food, the Agri-Food Innovation Council said the following:

Research and innovation on the use of [alternative] renewable and “clean” energy sources show significant promise in farming operations. [However, the technology is not at a point where it is viable for many farming operations. Further research and new innovations are needed to meet the needs of the agri-food sector.]

As alternative sources of energy sources are identified, it would be important to think about scalability, affordability, and adoption.

Does this mean that we will never get to the point where we’re able to replace propane and natural gas? No. But most experts indicate that we would need at least a decade before we are able to have workable, proven, affordable and “scalable” alternatives.

Colleagues, this amendment is not supported by any of the evidence. For that reason, it should be defeated.

In addition to not being supported by the evidence, this amendment is completely unnecessary. Obviously, nobody knows exactly when new technology will be available and scaled up to a place where it can be adopted by farmers at large. However, as soon as such technology is available, the sunset clause can be changed by a simple amendment passed by both houses of Parliament. This amendment is entirely presumptuous and arbitrary because it is not based on any evidence, and it is completely unnecessary.

It was defeated at committee for a very obvious reason: The experts are telling us it’s not a good amendment. The experts are telling us that when the technology is available, the government — both houses of Parliament — can make it available.

This is another attempt simply to kill a bill. I trust that, in the next day or two, you will finally have the opportunity to say “yea” or “nay” to the bill because I’m trusting that, after this, Senator Dalphond and Senator Woo will say, “Enough is enough. We’ve now messed this up long enough. We’ve completely gutted the bill with the previous amendment.” This amendment is unnecessary. You achieved your purpose to kill the bill with the previous amendment. You’ve destroyed farmers’ livelihoods. You’ve destroyed farm families and their livelihood. You’ve done that, so why continue with this charade?

Colleagues, let’s, at least, look at the evidence — not at what you like; not at what Justin Trudeau wants; and not at what my leader wants. Look at the evidence. Look at what farmers want. Vote for farmers. A vote against this amendment is a vote for farmers. Let’s, at least, do that on this amendment.

I ask you, colleagues, to defeat this amendment and move on to the main question at the earliest possible opportunity. Thank you.

Senator Dalphond [ + ]

Would Senator Plett accept a question?

Senator Plett [ + ]

No. Respectfully, I will not.

The Hon. the Speaker [ + ]

Are senators ready for the question?

The Hon. the Speaker [ + ]

Is it your pleasure, honourable senators, to adopt the motion in amendment?

The Hon. the Speaker [ + ]

All those in favour of the motion will please say “yea.”

The Hon. the Speaker [ + ]

All those opposed to the motion will please say “nay.”

The Hon. the Speaker [ + ]

I think the “yeas” have it.

The Hon. the Speaker [ + ]

I see two senators rising. Is there an agreement on the length of the bell? The vote will be deferred to the next sitting.

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