Senate amendments to Bill C-234 cut carbon tax relief to farmers by $910 million, according to PBO estimates

(Sharon Drummond, Flickr, CC BY-NC-SA 2.0)

The Senate’s amendments to Bill C-234 in December could result in farmers paying $910 million more in carbon tax, according to updated analysis by the Parliamentary Budget Officer (PBO).

After several weeks of contentious debate, a narrow majority of Senators voted to limit the proposed carbon tax exemption for natural gas and propane used on farms to grain drying, excluding barn heating and other on-farm applications. The Upper Chamber then passed a second amendment to reduce the minimum number of years the exemption would be in effect from eight to three.

On Tuesday, the PBO published an updated estimate on the impact the amendments to C-234 would have on federal carbon tax revenue if the latest version of the bill passes.

When compared with a scenario where C-234 does not become law, passage of the amended bill would result in a $69 million reduction in carbon tax proceeds for the government, the PBO determined.

The version of the bill passed by the House of Commons last year that included the longer eight-year sunset clause and barn heating was projected to reduce federal carbon tax revenue by $979 million over the next eight years — a $910 million difference.

If only the Senate’s first amendment — to remove the exemption for the heating and cooling of livestock barns and greenhouses — had passed, the bill would still have provided $251 million in relief for grain drying. In other words, the first amendment removed the exemption for an estimated $728 million in carbon taxes to be paid for heating and cooling livestock barns and greenhouses.

The second amendment, which shortened the timeline from eight to three years, further reduced the carbon tax relief from the bill to a total of $69 million.

The PBO says it assumes the government will “correspondingly reduce fuel charge proceeds returned such that there is no budgetary impact,” referring to the Return of Fuel Charge Proceeds to Farmers Tax Credit, which ranges from 0.14% to 0.186% of eligible expenses, depending on province.

It’s also not clear how the PBO accounted for GST that’s paid on the federal carbon levy.

Conservative MP Ben Lobb introduced a motion in the House of Commons in late January to reject the Senate’s amendments to C-234. The Conservatives are expected to bring Lobb’s motion back for debate again during Private Member’s Business on Feb. 14, but MPs that support the motion have no way to force a vote as long as Liberal members opposed to the motion are willing to stand up and speak to it.


C-234 back in the House of Commons, as MPs debate motion to reject Senate’s amendments

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



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