Bill C-234 would reduce carbon tax collected from farms by nearly a billion dollars by 2030: PBO report

The bill that would remove the federal carbon levy from natural gas and propane used on farms would result in nearly a billion dollar reduction in carbon tax collected from farmers by 2030, according to a new report published by the Parliamentary Budget Officer.

The PBO issued updated analysis on Friday of Bill C-234, which would remove the federal carbon levy from on-farm uses of natural gas and propane, such as grain drying and barn heating, for a minimum of eight years.

The report provides updated estimates on the amount of carbon tax revenue the government would forgo — and farmers would no longer have to pay — if the bill is implemented.

The annual figure rises from $76 million in 2023-24 to $162 million in 2030-31, coinciding with the Trudeau government’s plan to increase the price on carbon emissions from $65 per tonne in 2023 to $170 per tonne by 2030.

Altogether, the cumulative total from 2023-2030 adds up to $978 million.

An earlier PBO analysis estimated that carbon taxes collected from on-farm propane and natural gas in 2022-23 totalled around $50 million, when the federal levy was set at $50 per tonne.

After recieving final approval from MPs in the House of Commons prior the summer break, the Senate’s Standing Committee for Agriculture and Forestry is scheduled to begin its analysis of the private member’s bill on Thursday, Sept. 21, with Senate sponsor Senator David Wells and House of Commons sponsor MP Ben Lobb appearing as witnesses.

Earlier this week, Conservative Shadow Minister for Agriculture, John Barlow, told RealAgriculture he’s hopeful the bill will receive Royal Assent by the end of October or early November.

There have been multiple legislative attempts at removing the carbon tax from on-farm uses of propane and natural gas dating back to February 2020. Bill C-206 — the predecessor to C-234 — made it to the final stages in the Senate in 2021, but died before crossing the finish line when Prime Minister Trudeau called a federal election.

Related:

Senate politicking makes Bill C-234 a longshot to pass before summer break

Farm groups urging Senate to avoid stalling on Bill C-234

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