Bill C-234 was conceived after the 2019 "harvest from hell" on the Prairies when farmers had to use more energy than expected to deal with a wet grain harvest.
A private member’s bill that would exempt certain agricultural activities from the federal carbon price is heading back to the House of Commons with a few changes.
The bill would amend the federal Greenhouse Gas Pollution Pricing Act to add natural gas and propane used to dry grain and heat livestock barns to the list of farm fuels — including gasoline and diesel — already exempt from the federal price on pollution.
The Standing Committee on Agriculture and Agri-Food finished its study of Bill C-234 in November, and it is expected to pass a vote in the House despite the Liberal Party’s opposition.
Over five committee meetings, NDP MP Alistair MacGregor and Conservative MPs made the case for the fuel exemption because farmers don’t have other commercially viable fuel options, particularly for grain dryers.
Ontario Conservative MP Ben Lobb tabled C-234, which is similar to a previous private member’s bill that died on the order paper when the last federal election was called. That bill was conceived after the 2019 “harvest from hell” on the Prairies when farmers had to use more energy than expected to deal with a wet grain harvest.
“I know that I’m going to vote in support of it,” said MacGregor, the NDP’s agriculture and food critic, in an interview.
The committee amended the bill to include a sunset clause that will end the exemption eight years after it comes into force, though there will be the option to extend the exemption if viable technologies are not available. Several of those who spoke to the committee, including National Farmers Union representative Glenn Wright, recommended such a clause.
Liberal MP and committee member Ryan Turnbull said the bill will disincentivize investment in developing alternative technology because it removes the carbon price from the equation. Instead of passing a bill that erodes the strength of the carbon price, the solution should be to increase access to financing for farmers to move to renewable energy, he said in an interview.
The NDP’s apparent decision to support the bill surprised Turnbull.
“I’m really shocked that a party that has been calling for the end to all fossil fuel subsidies is essentially supporting a fossil fuel subsidy,” he said.
Compared to heating livestock buildings and greenhouses, grain-drying technology is trickier because while climate-friendlier options exist, they are not widely available in Canada, Turnbull said.
“But we could solve that problem in another way rather than just exempting farmers, basically just saying, ‘OK, well, go ahead and burn fossil fuels for the next eight years.’ ”
Biomass-fuelled grain-drying technology looks promising, Turnbull and MacGregor both noted.
“What I heard very loudly and clearly at committee and from my meetings with various stakeholders is that it’s just not feasible at this moment in time and that they would appreciate a little bit of a break, especially when they are having some of those extreme weather events that are leading to very wet harvests for their grain,” said MacGregor, referencing the biomass technology, which he “would love to see us develop” in the coming years.
The problem is an eight-year exemption leaves no incentive to change or invest in new technology, Turnbull said.
MacGregor said the price signal from the carbon price is “absolutely crucial” to encourage people to change their operations, but said without options available to switch to, there won’t be results.
“C-234 is an important measure only for this interim period; the industry will understand that this is only for a set amount of time,” MacGregor said, adding that the sunset clause means the industry will get “a little break right now, but it’s not going to last forever.”
Since the 2019 harvest, the federal government has made some changes to help farmers. In December 2021, the federal government introduced a tax credit to return fuel charge proceeds to farming businesses in provinces that use the federal carbon pollution pricing system because they don’t have their own equivalent system in place: Saskatchewan, Alberta, Manitoba and Ontario.
A $50-million funding stream for the purchase and research of more efficient grain dryers was announced in 2021. The soon-to-be-launched $15-billion Canada Growth Fund will also be able to help mobilize resources to tackle problems like this, Turnbull said.
“Fossil fuels are some of the most volatile fuel prices on the planet and farmers are going to, naturally, I think, try and find a way to get off of them,” MacGregor said.
Natasha Bulowski is a Local Journalism Initiative reporter who works out of Canada’s National Observer. The Local Journalism Initiative is funded by the Government of Canada.
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