Eight-year sunset clause pushes carbon tax exemption to the finish line at ag committee

On November 14, the House of Commons Standing Committee on Agriculture and Agri-Food approved  Bill C-234 — a private member’s bill that would exempt natural gas and propane used on farms for drying grain and heating barns from the federal carbon tax.

Dave Carey, vice president of government and industry relations at the Canadian Canola Growers Association (CCGA), and co-chair of the Agriculture Carbon Alliance (ACA) joined RealAg Radio host Shaun Haney to discuss the milestone on Tuesday.

The bill still needs to be formally referred back to the House of Commons for the third reading later this week, says Carey, and then approved by the Senate, which is the final stage in the lawmaking process.

The bill is not perfect, Carey says, with one of the hang ups being that commercial grain dryers aren’t covered by the exemption. The bill essentially extends the existing exemptions for on-farm gasoline and diesel.

“It’s not an omnibus government-style bill. It’s a surgical change to an act — one act — and we can only change one particular act,” he explains. “And we’re in the minority government. Ben Lobb was cognizant of this as he crafted the bill and provided drafting instructions that this is a bill that will only receive support from opposition parties like the Bloq, NDP, and Green Party — all three of which have voted in favour of the bill, and are vocally supportive if this was for on farm production.”

Part of the compromise in moving the bill forward included a “sunset clause,” with the committee landing on an eight year timeframe.

John Barlow, Foothills MP and Conservative shadow minister for agriculture supported the sunset clause and that amendment, which was a compromise to revisit the bill in eight years time. As Carey notes, the sunset clause was supported by most, as they understood it was what was needed in order for the bill to continue through.

In 2030, the carbon tax will be significantly higher than it is today, making this bill even more important. Because the clause involves an order in council provision — which means the day of coming into force in eight years time, the government of the day would introduce a motion into the House of Commons regarding Bill C-234.

“There will be a discussion, debate, and a decision will be made on ‘what do we do with this bill?’ Because there is an order in council provision, it would allow the government of the day to decide ‘do we extend that bill? Does it need another five, ten years, or are there other viable alternatives available?'” Carey explains.

Check out the full conversation between Dave Carey and RealAg Radio host Shaun Haney, below: