CPA Public Affairs
May 2019

CPA wants changes to federal carbon tax

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The CPA has petitioned for changes to the current version of the Greenhouse Gas Pollution Production Act in relation to agricultural applications of propane and power in remote communities. 
The GGPPA introduced a federal carbon tax on agricultural applications of propane in the provinces of Saskatchewan, Ontario, Manitoba and New Brunswick. The tax took effect on April 1. CPA President Nathalie St-Pierre filed a submission to the Department of Finance on April 16, in which she noted that the new carbon tax can’t be considered an environmental policy if carbon-intense fuels such as gas and diesel are given preferential tax treatment over low-emission propane.
The changes recommended by the CPA would level the playing field for propane in the agriculture sector and better reflect the federal government’s own stated intention of lowering GHGs.
 “We believe the exclusion of propane to be a conspicuous oversight, especially considering the stated objective of the government’s reasoning for the introduction of the carbon levy is to reduce GHG emissions,” wrote St-Pierre. “We also believe that the activities for eligibility are very narrow in focus. Propane represents a significant input for all agricultural sectors in Canada and if propane is not included and if the farming activities do not include property that is used to heat or cool a building, this will have a major impact on farmers across Canada.”
Agricultural stakeholder groups such as the Canadian Federation of Agriculture, the Ontario Federation of Agriculture, Keystone Agricultural Producers (Manitoba), the Agricultural Producers Association of Saskatchewan and the Agricultural Alliance of New Brunswick agree that the limited allowance for propane exemptions in agriculture applications do not go far enough. CPA’s recommended changes to the GGPPA with respect to agriculture include:  
  • Adding the word “propane” to the GGPPA so that propane can be delivered to a farm without the application of the carbon tax, as it does with gasoline and diesel;
  • Expanding the exemption for propane delivered to greenhouses from 80% to 100%; and
  • Adding propane as an eligible fuel and remove the exclusivity for farm machinery so that the act expands to include fuel used for heating hatcheries, barns, etc. as eligible farming activities.
The CPA also filed recommendations regarding supplying power to remote communities. The Department of Finance noted that the federal government has heard, “that, in some cases, marketable natural gas is also used to generate electricity for remote communities… In order to ensure that these remote communities can generate electricity from cleaner fuel sources, it is proposed that relief of the fuel charge also be provided to marketable natural gas (in addition to light fuel oil) delivered to remote power plant operators.”
In her submission, St-Pierre noted that “It's astonishing to CPA members that low-emission propane would not be actively considered in the same respect as natural gas for supplying electrical generation to remote communities.”
Unlike natural gas, the propane transportation infrastructure has been in place for decades. Members of the CPA are delivering propane to communities in Nunavut and other areas in Canada’s Far North. CPA’s recommended changes to the GGPPA with respect to supplying power to remote communities include: 
  • Adding the word “propane” to the proposed regulatory refinement suggested by the Department of Finance. It should henceforth read, “Expanding the previously announced proposed fuel charge for remote power plant operators that generate electricity for remote communities to also include relief for marketable natural gas and propane.
  • Modifying section (2) qualifying power plant fuel means a type of fuel that is light fuel oil or marketable natural gas or propane.
St-Pierre indicated that she looks forward to an early opportunity to further discuss the CPA’s recommendations with senior Finance Department officials and the minister’s office.

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