Greenhouse Gas Pollution Pricing Act
Bill to Amend--Twelfth Report of Agriculture and Forestry Committee--Debate Adjourned
October 31, 2023
Moved the adoption of the report.
He said: Honourable senators, I rise today to speak to the twelfth report of the Standing Senate Committee on Agriculture and Forestry on Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act.
I am pleased to advise that we held seven meetings. We heard from 24 witnesses and received 21 written briefs. I would like to add that, in comparison, the other place only held five committee meetings on this bill.
As an overview of what happened during those seven meetings throughout our study, I offer the following:
Three amendments were proposed, and only one was adopted during clause-by-clause consideration. The amendment adopted — put forth by Senator Dalphond — limits the bill to grain drying equipment only by excluding the heating and cooling of barns, greenhouses and other structures.
Upon presentation of this amendment, a point of order was raised by my Canadian Senators Group colleague Senator Burey, deeming that amending Bill C-234 in this manner was destructive to its original principles and goals, and was, therefore, out of scope. After debate on the point of order, I, as chair, ruled in favour of the point of order. However, the chair’s ruling was defeated in a vote of 5 yeas; 7 nays; and 2 abstentions. The amendment was then debated, voted upon and adopted: 7 yeas; 6 nays; and 1 abstention.
The report also now includes four observations, with a fifth observation being withdrawn, as it was very similar to one that was approved.
Honourable colleagues, I will now remove my committee chair hat, and assume my perspective as a senator appointed to this chamber because of my agricultural background. As you know, I take every chance that I can to highlight this very important industry, and so now I am wearing my proverbial farm hat.
I will begin by saying that presenting this report is a challenging task for me. I’m highly disappointed — as the chair and as a lifelong “agvocate” — that I must table this report, and now have to speak against it.
Colleagues, as I have said, there were two parts to this bill — farm heating and cooling, and grain drying — and now there is one. The amendment adopted in this report by our colleague from the metropolis of Montreal effectively removes half the bill by excluding the heating and cooling of buildings and structures.
I believe, as does the industry, that this amendment changes the initial intent of the bill, which was to provide carbon tax relief for farmers. The bill, as it now stands, establishes an unjust precedent within our industry. Our farmers work tirelessly to produce food that feeds our nation and the world, and they are facing increasingly challenging circumstances.
We heard over and over again in committee how much the industry needs this carbon tax relief, especially as we move into the colder months when farmers will be required to heat their barns, greenhouses, et cetera. Climate change, labour shortages, trade disruptions and the lasting effects of the COVID-19 pandemic have taken a toll on our agricultural sector. Additionally, agricultural commodities are already facing a rise in costs of production for things like inputs, supplies, machinery and transportation.
As a nation, I believe that we must do everything in our power to support our farms and ensure they can continue to thrive in the face of these significant challenges. Removing the heating and cooling of barns and other structures does the opposite of this.
While some alternative, greener options may be available for the heating and cooling of barns, the current challenges faced by the industry do not allow for producers to have the capital to afford these greener options, as they require astronomical investments usually amortized over 20 or more years.
The transition to more sustainable and environmentally friendly practices in agriculture is a goal we all share, including the industry. However, we must also understand that this transition requires time and significant investment to build the necessary infrastructure, and to scale up emerging alternative technologies.
Moreover, witnesses during the Standing Senate Committee on Agriculture and Forestry proceedings underlined that emerging technologies, which would provide alternatives, are at least eight years away from commercial viability. Let me repeat that — alternatives are at least eight years away from commercial viability.
Bill C-234 includes a sunset clause to re-evaluate its context in eight years, ensuring justification for such an exemption. As a side note, colleagues, one of the other amendments voted down by committee aimed to reduce this sunset clause to three years, even though we heard loud and clear in committee that three years wasn’t long enough for such technology to become viable.
The industry clearly supported the eight-year sunset clause amended to the bill in the other place. In the absence of viable alternatives for heating and cooling, the amendment, which removed half the bill, doesn’t just impact farmers’ and ranchers’ competitiveness — it jeopardizes their future efficiency and sustainability by forcing them to bear tens of thousands of dollars in carbon taxes. The net result is limited available capital for farmers to invest in their operations and continue lowering their carbon footprint through, for example, innovation.
The carbon tax both delays and prevents investments in critical efficiencies that would improve the sector’s environmental performance.
As I said previously, we are only weeks away from winter, when farmers across this country will begin adding more heat to their barns, greenhouses and other structures. This is a crucial period in the agriculture sector because of the coming cold weather. During this time, drying crops properly at the correct humidity level is required to prevent commodities from spoiling.
Furthermore, heating barns for broiler chickens, egg layers, young dairy calves, hogs and more is necessary to keep farm animals healthy through winter — so it is an animal welfare issue as well. Yet this amended bill removes the heating and cooling of these structures from a carbon tax exemption, essentially eliminating half the bill.
Colleagues, this is not the first time a bill with similar intent has been presented in Canada. Numerous attempts have been made in both chambers to provide relief for farmers from the carbon tax, underscoring the importance of this issue to our nation — and significant concerns regarding it. In fact, this is the second bill to pass the other place and come to our esteemed chamber of sober second thought, and this may very well be the second time the industry will fail to benefit from these measures, even though their duly elected officials voted for and passed similar bills twice.
I have heard, colleagues — and I expect you have all heard as well — from hundreds of Canadians, consumers, farmers, producers and numerous others in the last week or so who are extremely disappointed with this report, and that the bill has been gutted and its basic intent removed.
Representatives from the Canadian Cattle Association said:
On behalf of Canada’s 60,000 beef farms and feedlots, including the 7,500 seed stock breeders, we request your support for Canadian agriculture by voting against the proposed amendments and allowing the bill, in its original form, to be tabled at third reading and passed into law without delay.
A representative from Grain Growers of Canada, which represents over 65,000 producers, said:
I am asking for you to reject the proposed amendment from the committee which would exempt the heating and cooling of buildings. This would not only further delay this crucial piece of legislation, especially as we approach the winter season, but it also does not acknowledge the current technological realities.
Larry Davis, a cash crop farmer in Ontario, said:
Not only does this amendment change the intent of the bill which had received multi-party support in the house, it also jeopardizes the bill’s passage by adding considerable delays and sending it back to the house.
Honourable colleagues, this is a small fraction of what I have heard from people across our great country over the past week. It’s evident that our agricultural sector has been greatly let down by this report. Further, they have been let down by our honourable colleagues who never attended one meeting of the committee to hear from witnesses about the need for this exemption, but instead were parachuted into the committee for clause-by-clause consideration only.
Farmers, ranchers and processors must maintain their competitiveness within Canada’s economy. The carbon tax disproportionately affects them, despite their role as stewards of the land and an essential part of this nation.
Moreover, the sector plays a crucial role in preserving Canada’s environment and the fight against climate change. In fact, many farmers have been actively employing various carbon‑sequestration methods to enhance farmland productivity, protect the land and continue to produce the great food we all get to eat 365 days a year. Yet we continue to look only at the sector’s carbon footprint and not the contributions that farmers and producers make to return and sequester carbon and contribute to climate change mitigation.
In the Standing Senate Committee on Agriculture and Forestry, we have heard testimony that many in the agricultural sector are already actively engaged in the fight against climate change. For example, Paul Maurice, a farmer in Tiny, Ontario, said:
We run a 35,000-bird broiler operation. We also cash crop 900 acres of corn, soybeans, cereal grain and hay in Simcoe County, Ontario. I acknowledge that we are all part of the problem but we, in the agricultural sector, are doing our best to be part of the solution and not the culprit, as many would have us believe. The best management practices that we implement in our operations far outweigh the carbon footprint that so many believe we create. The sequestration of carbon within our crops, and subsequently into our soils, seems to be a story that is put aside. As farmers, we are always looking for production efficiencies to remain competitive in our domestic and global agricultural marketplace.
As I’ve mentioned, farmers are finding carbon-reducing strategies and innovative new ways to produce food for Canada and the world. For example, carbon waste is being used to generate biofuels through the construction of things like anaerobic digesters. This innovation is being used by dairy farmers and others across the country, yet they are not being recognized for these innovations.
Farmers are progressive, determined and interested in engaging in innovative new technologies for the advancement of the industry. Farmers understand the importance of innovation and progressiveness in their fight against climate change. But this cannot be supported by limiting their fiscal capacities and forcing them to bear the burden of an unfair tax on their livelihoods.
Bill C-234, in its original state, offers a practical solution that would provide relief for farmers without compromising our environmental goals. This exemption would have had a significant positive impact on Canadian agriculture. It would have helped reduce input costs for farmers, thereby making it easier for them to invest in new technologies and infrastructure that will improve their efficiency and competitiveness — and lower their carbon footprint. It would also have encouraged the growth and development of the agriculture sector, which is essential for our country’s economic and social well-being, especially as our population continues to grow. We need farmers to be able to grow, innovate and expand to continue to feed Canadians and the world.
Furthermore, the exemption in the original bill would have been in line with this government’s commitment to support small businesses and rural communities. By exempting fuels used for farming, the government would be acknowledging the unique challenges faced by these groups and seen to be taking steps to address them. However, the current report before us, which removes exemptions for the heating and cooling of buildings, structures and greenhouses, threatens to undermine these objectives.
The bottom line is that it’s farmers who are being pinched. It’s farmers who are going into this winter and will be hundreds of thousands of dollars in the hole while trying to keep their farms and families afloat to feed you, me, our families and the world.
If a business owner’s bottom line is affected, he or she will do all they can to cut costs to prevent bankruptcy. How can we expect our farmers to see their costs increase and their bottom lines threatened without them passing along those cost increases to the consumer? Except farmers can’t do that, because they are price takers, not price makers.
Colleagues, I am sure you heard the announcement last week by the Prime Minister that they are doubling the pollution price rebate rural top-up rate and implementing a three-year pause to the federal carbon price on deliveries of heating oil in all jurisdictions where the federal fuel charge is in effect. As a senator who raises issues and concerns related to rural communities, I was very happy to hear this announcement and know it will help many rural Canadians as they struggle to pay their bills, heat their homes and put food on their tables.
Yet our farmers — who, of course, are also located in rural areas — will not receive this benefit when heating and cooling their farming facilities.
This would have been, and still is, a critical exemption that farmers need now that would help them survive and continue to feed us all.
Why are we burdening ranchers and growers with taxes, sometimes reaching tens of thousands of dollars — in some cases much more — and limiting their ability to adopt technology in the future? Why are we hindering our national food security and food sovereignty? Why are we causing farmers this grief and further delay?
Colleagues, having said all this, as a senator that many of my honourable colleagues come to with questions about agriculture, I turn to you now and respectfully request that you vote down this report. Vote it down for our farmers. Vote it down for your local producers. Vote it down to ensure that the increased costs don’t cause our food to continue to skyrocket and cost more. Whatever your reason, I ask that you vote this report down, return the bill to its original state and return it unamended to the other place post-haste so our farmers don’t have the burden of this carbon tax now.
With that, I’ll take off my agriculture hat and say thank you to the Library of Parliament analysts, the clerk and all the committee staff for their help.
Honourable senators, I rise today at report stage as the Senate sponsor of Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act. I wish to thank the committee and its chair, Senator Black, for their important work on this bill.
Although it’s not uncommon to speak at report stage, it is important to do so at this particular point in the life of Bill C-234 as we’re dealing with an amendment from the committee designed to alter the spirit and intent of the bill and essentially kill the bill. An amended bill must go back to the other place, where the government can control the placement and pace of the bill’s progress and let it languish and, therefore, not become law.
However, after hearing all the arguments, I’m hopeful that senators will understand this bill is aimed at helping our food producers, and it respects the intent of the carbon tax. A vote against the report, which is what I’m asking the chamber to do, would allow the original, unamended bill to be reviewed and debated by the full chamber, where any amendments can be introduced and debated by all at third reading.
Farmer Roger Chevraux said it best:
I am a 4th generation farmer, and my family farm has been in operation for over 110 years. Together with my son, we farm 5,000 acres near Killam, Alberta, where we grow canola, wheat, and malt barley.
This proposed amendment excludes livestock farmers, ranchers and greenhouse growers and, if passed, would return the bill to the House of Commons, killing the bill and the much-needed financial relief it provides.
Farmers, ranchers and growers are simply asking for natural gas and propane — which are lower carbon fuels used on farms, essentially for barn heating and cooling — to receive the same carbon tax exemptions that are in place for gasoline and diesel.
Colleagues, the objective of this bill is straightforward. It’s intended to correct a legislative oversight by creating on-farm exemptions from the carbon tax on lower emission transition fuels used for critical farming practices such as grain drying, heating and cooling livestock barns and greenhouses, steam flaking and irrigation. The tax affects Canada’s farmers, ranchers and growers who rely on two key transition fuels, propane and natural gas, where there are currently no other viable alternatives.
This is not a carbon tax debate. We want to ensure farmers are motivated to eventually go to non-carbon fuel. The people that work the land are also the key stewards of the land, and they want to be as respectful to the environment and business-efficient as possible. To get there, farmers, ranchers and growers should be encouraged to use cleaner fuel like propane and natural gas. The ironic thing about the existing tax exemption is that higher emission fuels — including gasoline and diesel — are exempt and the lower-emission fuels — propane and natural gas — are not. It doesn’t make sense to put a behavioural tax on a product to which you want the behaviour to shift.
Colleagues, if we want to move away from the most carbon-intensive fuels, like coal and diesel, and transition to zero-carbon fuels like solar, wind, hydro, tidal or some other non-carbon fuel, there must be steps in between to get us there. These steps include lower emission fuels like gasoline and even less emission-intensive fuels like propane and natural gas. That’s what we are talking about here.
Since I’ve taken on this bill as Senate sponsor, I have visited a number of farms and ranches. One poultry farmer I met in Alberta told me he is doing everything he can already to make his business less costly and more efficient. He has eight poultry barns, and he needs to keep a very specific temperature range in those barns. It’s a poultry barn, colleagues, so that’s chickens; if it goes above that range, the chickens will die in about 15 minutes. If it goes below, they will survive a few hours, but that’s it.
Therefore, these aren’t choices. They are things they have to do, and the only way they can do them with the technology available now is to heat their barns in the winter, when it can be minus 30 or minus 40 degrees Celsius, or cool them in the summer, when it can be plus 30 or plus 40 degrees. This farmer has already done so many things, like insulating his barns, putting up heat shields on the sun side of the barns so the sun is absorbed by the shield and has less impact on the barns and building with concrete. They are doing everything to lower their use of fuel and to keep their animals alive.
Having barns removed from the exemption is the entirety of the amendment, versus grain dying, which is also important, but a different sector of the business from keeping your cattle alive and keeping your chickens and hogs comfortable and alive in the summer and winter where in Canada we have those extremes.
The other critical issue with farms is that, by their very nature, they are remote and rural. There is not always a ready supply of whatever fuel you might want except for something like propane, which is delivered to the site in a tank. Many farms, which are rural and remote, don’t have access to natural gas. The goal is not just about shifting behaviour, which Canadians are already doing, it’s also recognizing the practical challenges faced by farmers, ranchers and growers and ensuring a smooth transition to cleaner, more sustainable energy sources.
Colleagues, the process of amending this bill sends it back to the other place where it will die. That’s the purpose of the amendment. The amendment didn’t have to be on barns — it could have been a change in the bill’s name. That would have been an amendment and would have achieved the same result. But the amendment that did get through, with a number of abstentions and vigorous debate, was removing barns from this whole equation. That’s fine for grain dryers, but it’s not fine for the farmers and ranchers of Canada who need to keep their animals comfortable and alive.
Another farmer I visited in southern Alberta told me that when the carbon tax reaches $170 a tonne, it will cost him half a million dollars per year just on the carbon tax — money that could be spent getting better or newer technology or testing solar cooling on one of their barns. This is the effect of additional costs and brings with it no benefit to the farm and no benefit to the environment. The government is calling it a market signal. Farmers, ranchers and growers believe that the only signal this sends will be higher costs to them and higher prices for the consumer. If there is an exemption for diesel and gasoline for internal combustion engines that drive heaters and coolers, would that not also be a market signal?
Colleagues, farmers, ranchers and growers are listening to this debate. They fully understand what transpired at committee and what is at stake at this stage of the Senate legislative process, and they understand the purpose of the amendment. As Ontario farmer Merv Erb said after hearing the news of what happened at committee:
I saw what happened at committee with Bill C-234. So here we are — with wet corn, facing atrocious drying costs. It might be a harvest nightmare like 2018/2019 all over again. Bill C-234 would have offered much-needed and critical relief. And now the Senate is gutting the bill.
As the bill’s Senate critic, Senator Dalphond, asked at committee, given that the price of natural gas and propane is currently lower than in previous years, why would a farmer still need a break on that fuel? Well, the price of oil 10 years ago was over $100 a barrel. Four years later, it was less than $30. Should a farmer then switch to oil, given the lower price? Today, the price is $83 per barrel. If Bill C-234 is a question of fairness, then it shouldn’t be anchored on a fluctuating variable like spot price. It should be anchored on fairness.
I want to be clear on why I’m voting against the committee report. If the report is voted down, it doesn’t kill the bill. It just says that the report that came from the committee, including the amendment, is not accepted by the chamber. Bill C-234 will go to third reading as an unamended bill, and any amendments, including this amendment that passed at committee, can be proposed at third reading for consideration by the full Senate. That’s our process. It’s fair, and we can all be part of the discussion. If this amendment on removing barns from the exemption is deemed worthy, then please vote that way.
Colleagues, by voting for the report, you’re allowing this amendment to pass, which will cost farmers, ranchers and growers a billion dollars that would or could otherwise be invested in the sustainability and efficiency of their operations, in expansion and in hiring more people — all the things we wish for in any business.
Colleagues, we often hear in this chamber that our job is to make bills better. That is our job. If this report passes and the bill is amended, we’ll have failed in our commitment to do just that. Killing it by process does not make this bill better.
Would Senator Wells take a question?
Of course, Senator Dalphond.
Senator Wells, you said that if the report is adopted, that changes nothing; amendments can be moved at the third reading. If the report is adopted, you could move a motion to have this amendment removed from the bill, so why do you want to kill it at the report stage and not debate it fully, as we normally do, at third reading? Then we will all have the opportunity to take part in the debate.
As the sponsor, you would then have 45 minutes to explain and convince colleagues that your amendment is worth receiving and should be adopted. That is when we, as critics, will have 45 minutes to explain why it shouldn’t be adopted.
Why don’t we debate according to normal rules? That will not prevent you from bringing an amendment. If this report is adopted as is, it doesn’t preclude you from bringing an amendment. I don’t understand.
Thank you. Let me explain.
The opportunity to defeat a report, and the amendments that came with it, at committee is part of the normal rules — you would know that. This is one avenue we can take. I think, if your amendment is valid and worthy of consideration by the chamber, it should be debated on that merit. If you would like to bring that amendment back at third reading, where everyone can have a chance to debate and discuss it, I think that’s the appropriate place to do it.
Honourable senators, I rise today to speak to you as the Deputy Chair of the Standing Senate Committee on Agriculture and Forestry, as a senator from Alberta and as someone who is deeply concerned about the impacts of climate change on the province and the country I love. The last three years have driven home to us as never before that climate change isn’t some hypothetical, existential crisis of the future; it is happening right now, in real time. Farmers, more than any other Canadians, are seeing the impact of the climate shift every day before their very eyes.
So when Bill C-234 first came before us, I was torn. It was obvious that farmers, under all sorts of economic and trade pressures, were being affected by carbon prices in a way few other small businesspeople were. It was small wonder they were seeking carbon tax relief to help them with grain drying and barn heating and cooling, especially when the government had already given an exemption for gasoline and diesel fuel used on farms. Why exempt diesel, for example, but not propane, a much cleaner fuel? You can see the logic in the argument behind Bill C-234.
But I am also a believer in carbon taxes. They are a transparent, straightforward way of incentivizing people to reduce fossil-fuel use. They are fairer than subsidies and rebates. They don’t pick winners and losers. They send a clear price signal — a signal we all feel in our pocket books. They change consumer behaviour in a way no righteous lecture, PR campaign or Senate speech ever could.
So I came to our committee hearings on Bill C-234 with an open mind. I had not yet decided whether I would support the bill or any amendments to the bill. I just listened to the expert witnesses. As deputy chair, I worked diligently to ensure that we had a balanced list of witnesses, not just farm lobby groups and environmentalists but also independent academic and engineering experts. I was grateful for the work that all the senators on the committee did to find those witnesses. Names were put forward by Senator Black, Senator Klyne, Senator Dalphond, Senator Woo and Senator Wells, as well as by me.
I listened, just as I always tried to do in my work as a journalist, without favour or prejudice. I asked tough questions, without bias, trying my best to understand the pros and cons.
I came to a conclusion: An exemption for grain drying makes sense. If newly harvested wheat or corn isn’t dried before storage, it runs the risk of rot and mould. We need to dry grain quickly and thoroughly. On Prairie farms, in particular, grain is harvested in huge volumes. Grain dryers are a necessity — not every harvest, but during wet years the ability to dry grain efficiently and completely is essential.
While grain-dryer technology is improving, there are no viable market-ready options other than heaters fuelled by natural gas and propane: there aren’t any now, and there probably will not be in three or five years from now.
I was also mindful of the words of one of our academic expert witnesses Dr. Nicholas Rivers, Associate Professor of Public and International Affairs at the University of Ottawa. He noted that the United States has not imposed such a carbon tax on its grain growers:
The Canadian carbon pricing policy offers rebates to large industrial emitters of traded goods, like cement or steel manufacturers, in order to counteract this competitiveness concern. Rebates to large emitters are based on output, like the amount of steel produced, while the carbon price is levied on emissions. This policy design ensures that large industrial emitters continue to face an incentive to reduce emissions, but are not placed at a disadvantage when competing internationally.
However, many farms are not covered by industrial carbon pricing rebates. There are some exemptions to the carbon price for fuels used on farms, but these exemptions currently do not apply to fuel used for grain drying or for heating buildings. This means that grain farmers face the full carbon price on fuel used for grain drying, and do not receive output-based rebates. However, like cement and steel, grains are an internationally traded commodity, and there are legitimate concerns that the carbon price puts Canadian grain farmers at a disadvantage relative to their international peers.
Given that Dr. Rivers is a supporter of carbon taxes, I thought that argument was particularly objective and informative.
So, despite my concerns — indeed, my fears — about the climate crisis, and despite my opinion that carbon taxes are sound public policy, I began to see that an exemption for grain drying made sense.
However, it was far less clear to me that an exemption for heating and cooling barns, outbuildings and other structures was equally necessary. There are all kinds of ways to heat and cool buildings, and there are all kinds of ways to make barns and other farm buildings more energy efficient; there are practical market‑ready options that farmers could deploy to reduce their costs. An exemption for grain drying was justifiable. Was an exemption for barns? To me, that case was much less clear.
So when it came time for us to make amendments, I thought long and hard. I knew that accepting Senator Dalphond’s amendment, which narrowed the scope of the bill to deal with grain drying, specifically, would slow the passage of the bill — perhaps dramatically, and perhaps fatally.
But it is not the job of the Senate to accept and pass private members’ bills without study and possible revision. If anything, private members’ bills require more thought and study, because they don’t always receive such scrutiny in the other place where partisan politics can play more of a factor than they sometimes do here. Just because a private member’s bill wins enough votes to pass in the other place doesn’t mean we should rubberstamp it here. We should hold it up to at least as much study and scrutiny as any government bill.
On the other hand, if I’m being blunt, I also worried that, if Bill C-234 weren’t amended and narrowed in scope, it might not pass in this chamber at all. I know there are many senators here who are passionately and philosophically opposed to any carbon tax exemptions. Theirs is a principled position, and one that I might have shared had I not heard all the expert evidence about the conundrum of grain drying. I was worried that, without the amendment, the bill might fail altogether.
So when it came time to vote on the amendment, I made a difficult choice and voted pragmatically in an effort to save the bill by amending it. After that, I voted against amendments that would have shortened the timing for the bill’s eight-year sunset clause and that would have made it harder to renew the exemption when those eight years were up.
Because of the even split of the committee, and because my name comes near the end of the alphabet, I ended up being the swing voter each time.
Of course, the operational definition of a compromise is that it leaves people on both sides unhappy. I heard from many who were upset with my decision, either because they felt I had betrayed farmers and perhaps fatally wounded the bill or because they felt I had betrayed my principles and the planet by voting in any way for a bill that rolled back taxes and could be a Trojan horse — a wedge in the door to end carbon taxes for good.
But, in the moment, I felt I had made the right decision. I was prepared to defend it, meeting with several of the key farm lobby groups last week to explain my thinking and to hear their concerns. I was fully prepared to stand by my decision until the news on Thursday, broken here in this chamber by Senator Housakos, of a special new carbon tax exemption announced by the government: one that gives rural and small-town residents a three-year exemption on the carbon tax for heating oil.
This tax exemption has been described as a national program to benefit all Canadian households. That is a bit of sophistry. First of all, the exemption only applies in jurisdictions that are part of the federal backstop.
According to Statistics Canada figures, in 2021, 40% of homes in Prince Edward Island relied on heating oil as their primary heating fuel. In Nova Scotia, it was 33%, and in Newfoundland and Labrador, it was about 17%. In New Brunswick, it’s closer to 8%. Fewer than 10% of homes in Ontario rely on oil as their primary heat source. In the Prairies? Well, in Alberta and Saskatchewan, the number is effectively zero, according to Statistics Canada.
I don’t mean to sound divisive and as if I’m pitting Canadians from some provinces against others. It’s the exemption that’s doing that by picking regional winners and losers and stirring up bad feelings across Confederation.
Now, how am I, as an Alberta senator, supposed to look Alberta farmers in the face and tell them that I took a principled stand against carbon tax exemptions when the government has pulled out the rug right out from under me?
In the government backgrounder on this new policy which comes under the headline, “Lowering energy bills for Canadians across the country,” we are told that the heating oil exemption will apply not just to heating homes but to the heating of buildings and similar structures, so long as they are not involved in industrial heating or, incidentally, grain drying.
It’s also unclear whether this applies to small businesses. The initial press release mentions small businesses. I have been trying for days now to get an answer to that question without any success. But does this mean that farmers in Prince Edward Island and Nova Scotia could use exempted fuel to heat their barns and outbuildings regardless of possible fire risk? It’s completely unclear.
I want to say again that I support carbon taxes. They are a simple, straightforward and transparent way to change human behaviour — a market solution for a market problem. I am not a climate change denier. I am not a carbon tax opponent. What I am is a very frustrated Albertan and a very frustrated deputy chair. How can we support having bespoke tax breaks for one region and not another? How can we adopt a system of carve-outs that pits one region against another? How can we maintain public confidence in the fairness of our carbon tax regime if we pick and choose exemptions willy-nilly?
I’m not going to stand here and tell you how to vote on this report. I’m not even sure how I’m going to vote. I just know that I’m feeling pretty foolish right now, pretty betrayed and I wish I didn’t. Thank you. Hiy hiy.
Honourable senators, as a long-time journalist, I am not often shocked or surprised by what politicians say, but for a minister in the cabinet of this country’s government to state that if people in Western Canada voted Liberal, they, too, might be rewarded by a pause or a reduction in the punitive carbon tax — well, it’s beyond the pale, and it’s beyond what we deserve as citizens.
For those of us old enough to remember, it echoes the division and discord that came with the imposition of the National Energy Program or from the words of the Prime Minister’s father when he mused, “Why should I sell your wheat?” Well, at this rate, there won’t be much wheat, lentils or canola to sell.
Let me reiterate. This kind of politicking is divisive in the extreme. It’s unfair. It belies an ignorance about the diverse nature of this country — its rural communities, in particular. As Senator Simons pointed out, heat pumps don’t work when it’s minus 40, so we don’t use them. But that’s a debate for another day.
This report is a slap in the face to farmers and the entire agricultural sector who have pinned their hopes on some relief, as was offered by Bill C-234. That relief has now been snatched away by amendments here in this place which have the force and effect of gutting the bill and denying that much-needed relief.
We had a dry year in Saskatchewan, except that it rained and hailed for three days in late August when the crops were already cut. So now we need to dry the grain.
Farmers were partially exempt from the carbon tax on gasoline and diesel, but natural gas and propane — the fuels they use to dry their grain or heat their barns — were not exempted. This makes farming, food production, transporting, processing, marketing, selling and eating food more expensive.
Bill C-234 was passed with support from every single party in the other place, and I backed it wholeheartedly because compromising our food production should be non-negotiable. But the bill has been gutted, and so I can no longer support it. I urge everyone to vote against the report from the committee and reinstate the original intent of the bill because treating different regions differently because of how they vote is offensive.
It’s also a bit bizarre, I might say, that the government would undermine their core argument for climate policies. It’s their signature. They argued that this tax puts more money in our hands, that the rebates exceed the costs, but clearly not if they now agree that people need relief from the impact of the tax.
That’s what Bill C-234 was supposed to do, what it set out to do. Farmers are not asking for a handout. They put their money where their hearts and lives are. In my own province, for example, more than $11 billion is invested by farmers every spring to get their crops in the ground. This includes the cost of seed, treatment, fertilizer, labour and equipment.
Seeding is a megaproject when you consider the impact of all the component parts of that project, where the seeds come from, where the machinery is built and how the fertilizer is processed. This extends across and infiltrates every aspect of our economy. It’s impossible to overstate the value, not just to our province but to this country. And then comes harvest. Ditto. The economic impact is just as massive.
There are over 34,000 farms in Saskatchewan. That is 43% of the cropland in Canada, in this entire country. Saskatchewan generates more than $18 billion in international sales of that product, and they contribute over $82 billion just to the province’s GDP, never mind the country.
The Parliamentary Budget Officer provided an updated analysis of the exemption for qualifying farm fuel to natural gas and propane, and it shows farmers would save almost a billion dollars through to 2030 — one billion in taxes. That obviously makes our food more expensive in the middle of an affordability crisis. In fact, it makes life more expensive.
Colleagues, the cost of the carbon tax and the new Clean Fuel Standard — also a tax — to farmers is millions upon millions of dollars a year. These costs, of course, move along the supply chain as food makes it from farm to fork. And in the end, the consumer — each of us — pays more.
There are anxious farmers, consumers and businesses across this country who are counting on us, and we should do the right thing for every Canadian regardless of where they live or how they vote. Thank you.