Bill C-234

An Act to amend the Greenhouse Gas Pollution Pricing Act

This enactment amends the Greenhouse Gas Pollution Pricing Act to expand the definition of eligible farming machinery and extend the exemption for qualifying farming fuel to marketable natural gas and propane.

Greenhouse Gas Pollution Pricing Act

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

I have too, and it was going on during the parliamentary secretary's speech as well.

Could I ask the hon. members to take their conversations to the lobbies, please? We would like to respect the speeches being made in the House.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, what I was saying is that it is an incentive. For an incentive to lead to a transition, there needs to be a possibility for change.

If I decided to buy a sports utility vehicle with a V8 engine to drive home from my work when I do not need it, it would make a lot of sense to tax the vehicle to encourage me to buy an electric vehicle or a smaller one. I would be in favour of such a measure.

However, I would not support such a measure being applied to grain producers who absolutely have to dry their grain. To begin with, we have to look at the basic context of North American agriculture. We do not have the same climate as our competitors. At harvest time, the grain often has to be dried. If the grain is wet when harvested, there is no choice but to dry it; otherwise it cannot be stored. There is no other way to dry grain that is as efficient, as fast, and less polluting as with propane. That is what this measure is all about. I hope that my clarifications at the beginning of my speech reassured people about my party's intentions. The Bloc is in favour of taxing pollution. We are in favour of transition measures. However, in this case, we must also act wisely.

If we put a tax on fuel we will see real repercussions: Either we reduce our agricultural producers’ margin, which is already very small because they do not control the selling price of products sold on international markets, or we increase the sale price of the product.

This measure will not reduce pollution. We need to act where it counts. Where it counts is in oil, natural gas, deposits and new projects. Where it counts is in not approving the Bay du Nord project, for example. I want someone to promise me that the oil sands development will be scaled back because the Bay du Nord project was approved, but that is not what we are hearing. We need to act where it counts.

I spoke earlier about the bills that failed because the Prime Minister called an election. There was Bill C-206. The conversations in the House distracted me a bit, but I also wanted to mention that the bill respecting supply management was at the end of the process. We will also reintroduce that bill.

What Bill C-234 does is quite simple: It changes the definition. There are already exemptions for farming fuel because there is no alternative, and natural gas and propane are simply being added. We will not be polluting more because we are adapting this bill. We are going to ensure that we do not hike the costs of agricultural production. Agriculture is the basis for everything else. That is the big difference.

As members know, the bill does not affect Quebec directly. In Quebec we have a parallel system, the carbon exchange. In theory, farmers are exempted from the carbon exchange, but they still feel the indirect impact, because when they purchase fuel, part of the costs incurred by the major companies is passed on. There are claims for that, but that is managed by Quebec.

Nevertheless, our farmers in Quebec tell us that we need to pass Bill C-234 because it is the right thing to do. It is what our farmers need. Therefore, that is what we will do.

The principle behind our support is a fair transition. I could draw a parallel with products, for example, pesticides used in fields. My colleagues know that this is a sensitive issue, and that the Bloc Québécois was among those who reacted vigorously last July when there was a rather sneaky attempt to increase limits during the construction holiday in the hope that no one would notice. This issue is a very sensitive one for us.

However, before taking a product off the market, we need to make sure there is an alternative and look into what will happen after that. Sometimes we must act prudently, but we should still use common sense and go even further. What does going further mean? It could mean establishing the famous environmental partnership I keep talking about. What is this environmental partnership?

We are asking our farmers to make an effort to reduce their environmental footprint. That is fine. They are essential to us, and they almost always volunteer to do the right thing.

However, we will be asking them, for example, to stop farming a buffer strip they have been harvesting for 25, 30, 40, 50 years or more. We are asking them to give up part of their income for the common good. That is fine, since it is the right thing to do. What is not fine is imposing this burden entirely and solely on these farmers when the entire community benefits.

I think we need to provide direct support for these measures and compensate farmers fairly. This will provide a considerable incentive for our farms to improve their performance on the ground.

This is not my first time saying this in the House, but I am convinced that we need to trust our people and decentralize these funds. Some programs are well designed and make sense. Consider, for example, the on-farm climate action fund, which is a step in the right direction. However, we need to stop asking farmers to fill out huge forms when the government decides it needs them. We must decentralize these decisions.

For example, the amounts we would pay to compensate the non-use of a buffer strip or its reforestation would be deposited in an account, a bit like the AgriInvest program. That way, the entrepreneur, in this case the farmer, would have access to it for the next technological innovation. Two years later, the farmer could use that money to build a new stable using geothermal energy. That would be another innovation made at the right time, and we could provide compensation so he could have that money for the next innovation.

None of the farmers I have met want to pollute. They are the first victims of floods and droughts. Members will recall how bad things were in the west last summer. Farmers are aware of that and they have always been aware, long before these problems arose. They work on the land all week long. They understand the situation far better than we do. We need to trust them.

Let us make the compromise proposed in Bill C-234 and provide financial relief for our farmers for a limited time. Let us foster the transition.

[Richard Lehoux, Conservative, Beauce, QC]

Madam Speaker, I rise today to speak to Bill C-234, an act to amend the Greenhouse Gas Pollution Pricing Act. This bill was introduced by the hon. member for Huron—Bruce, whom I greatly respect.

I will point out that this bill was previously introduced in the House by my friend and colleague, the hon. member for Northumberland—Peterborough South, and that it was about to be passed before the Prime Minister called a useless election.

Bill C-234 makes sense, and it will provide our farmers with substantial financial support, making it possible for them to supply the products Canadians need. Canadian farmers and livestock producers need propane or natural gas to dry grain, irrigate their lands and heat their buildings and greenhouses in order to feed Canadians and stimulate our export markets.

The Greenhouse Gas Pollution Pricing Act unfairly penalizes Canadian farmers and livestock producers by increasing the price of carbon.

This tax, in addition to the general increase in food production costs, reduces farmers’ ability to invest in high capital intensive innovations and technologies that foster sustainability and productivity gains.

In my riding of Beauce, there are many different types of production. We have a high concentration of pork and poultry producers, to name only two.

I can say that the message is clear and that the farmers I have spoken to support this legislation. I would like to point out that our party also had the support of the Bloc Québécois and the NDP the last time this bill was debated in the House and put to a vote.

I just hope that with the advent of the NDP‑Liberal coalition, our friends in the NDP will not turn their backs on farmers and forget what we are talking about right now.

I would also like to point out to the House that all members of the Agriculture Carbon Alliance are in favour of this bill. This group is composed of Canada's largest agri‑food associations.

I think it would be extremely unwise of us to ignore the importance of this measure for our country's main food suppliers.

Canadians are being hit hard by the highest inflation rate in over 30 years, and the price of everything is skyrocketing.

The Conservative Party of Canada continues to look for ways to help Canadians get by. What better way to help Canadians than to lower the price of food in this country? That is precisely what this bill would do.

When farmers are hit with ridiculously high carbon tax bills, who will shoulder the increase in costs? The consumers, of course. They will be the ones to pay the consequences.

We must be able to find tangible ways to help reduce food prices, and this bill is one of those ways.

I am certain that my Liberal colleagues will be wondering what impact this will have on the environment. My reply is that I know what I am talking about, since I am a fourth-generation farmer on a family farm. Farmers are known as protectors of the environment and innovators. They have adopted new technologies and proven their ability to constantly decrease their environmental footprint while increasing production and maintaining productivity, without the need for a carbon tax.

Unfortunately, since there are no viable alternative fuel sources to heat and dry grain, the Greenhouse Gas Pollution Pricing Act as it stands will not achieve the targeted emission reductions in this area.

I would like to point out that the Parliamentary Budget Officer conducted a study on the effectiveness of the carbon tax and its reimbursement system. It was a scathing report that must have been shredded in many a Liberal office. In the House, I always hear that Canadians will end up with more money in their pockets. The Parliamentary Budget Officer’s study used a farm in Manitoba as an example; this farm received a mere 32% reimbursement on all of the carbon tax it would have had to pay in 2021.

Our agricultural industry in Canada wants to look to the future and find ways of being more efficient and greener, but it needs time to adapt and make the necessary changes. Placing a high carbon tax burden on our farmers will not help anyone.

The government always seems to find new ways of standing in the way of our farmers and livestock producers. I could give you a few examples. Our farmers are already facing difficult weather conditions and other problems over which they have no control, such as border closures in importing countries. The government has now decided that it should increase the carbon tax starting in April. The government also intends to cap the use of fertilizer. This is not to mention its 35% tax on fertilizers, which is crushing Canadian farming families.

In closing, Canada must be considered a world leader in livestock production. There are so many things going on in the world right now, including the war in Ukraine, tensions between numerous countries, heat waves in India and Pakistan and conflicts in Afghanistan. Canada should be able to provide food assistance to these countries, but our farmers can barely stay in business because of the tariffs and taxes imposed by the government. That is ridiculous.

As I have said many times in the House, Canada must use its agricultural and agri-food sector as an economic driver to move our country forward. There is nothing in the 2022 budget for agriculture, just the same old announcements.

Can we now expect the Liberals to block this bill as well? They often show great imagination when it comes to finding ways to slow us down as a country.

I hope that my colleagues listening to me today understand the importance of this bill and the good that it can do, not only for farmers, but for young parents trying to put food on the table, seniors who have trouble making ends meet, and the many families in other countries we could surely be helping by providing food aid. Everything this bill does will have a positive impact on the people in our ridings across the country. I hope that, when the time comes to vote on this bill, all parties will come together and do what needs to be done.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Madam Speaker, it is always a privilege to rise in the chamber and speak on behalf of the residents of Chatham-Kent—Leamington and, indeed, on behalf of agriculture across Canada.

I am also pleased to speak to my colleague from Huron—Bruce's private member's bill, Bill C-234, which affects so many constituents, including our own family farm.

The bill seeks to amend the Greenhouse Gas Pollution Pricing Act by adding natural gas and propane to the list of qualifying farm fuels, and that is for the purposes of both grain drying and heating and cooling farm buildings.

I did have the opportunity to speak to this bill's predecessor, Bill C-206, in the previous Parliament where it was passed, only to die in the other place when the Prime Minister called the unnecessary election.

Our farmers are the first environmentalists and our farmers are great competitors. They can hold their own against anyone, but not with one arm tied behind their back. They cannot continue to be first-rate environmentalists when they are hamstrung by policies that their competitors do not face.

Before getting into the specifics of this bill, I wish to remark on four different framing points that will outline where I am going.

One, as I just stated, as individuals, farmers are environmentalists by nature and by necessity. The drive to leave the land in a better condition than when they found it is innate to every farmer that I know. Farmers are environmentalists by necessity. It is the condition of their land, the condition of their flocks and of their herd that supplies the farm family with a return on their labour, on their investments and on their inputs, so it is in their own self-interest to leave the vehicle of their own prosperity in better condition for the next generation.

Two, collectively, agriculture has a strong record of reducing its environmental footprint, be it through the adoption of low till or no till; be it through the refinement of working through nutrients, such as through the lens of the 4Rs, putting the right nutrient at the right place at the right time with the right amount; be it through more intensive use of cover cropping or rotational grazing. Farmers have largely done all of this without regulation and without additional taxation or without an additional government-imposed price signal. I will come back to that point in a moment.

Three, agriculture has a strong record of innovation, of adopting new technologies, such as the use of GPS technology on the farm, the use of variable rate technology in seeding and in crop protection products, robotics in our dairy sector, and climate controls and automation in our greenhouse sector. Believe me, as soon as a viable commercial alternative to fossil fuels is available in rural Canada, farmers will adopt it and quickly, without the stick or a price signal embedded in a tax. That leads me to my final framing point.

Four, by and large, farmers are price takers. They cannot effectively pass along cost-input increases to their buyers.

Let these four points set the stage for my remarks on Bill C-234. When we initially debated its predecessor, Bill C-206, the harvest from hell in 2019 had just occurred in western Canada. That really demonstrated the need for this carbon tax exemption. It was a particularly wet fall where, with frost and rainfall, et cetera, interrupting the harvest, the use of natural gas and propane was required to put the grain into a storable condition.

Farming in Ontario and in eastern Canada requires the use of grain dryers each and every year, particularly for grain corn, but also for soybeans, wheat, canola, oats, et cetera.

When we studied Bill C-206 in the previous Parliament at committee, we did look at alternatives to fossil fuels. In many parts of our economy, electrification is a potential alternative, but given the obvious nature of agriculture being situated in rural Canada and the lack of our grid capacity, this is simply a non-starter.

We also looked at a second option, and that was the use of crop residues as a fuel source. That means gathering them after harvest and then burning them in heaters. While there are some prototypes being trialed, they are simply not available at scale.

Even more problematic with this approach, crop residues are incorporated into the soil or are left on the surface, and they become organic matter for our soils. They sequester carbon and they increase soil organic matter levels, which help both with crop production and our climate goals.

The voluntary adoption of reduced or eliminated tillage provided improvements in soil moisture retention, a reduction of soil erosion and, of course, an increase in carbon sequestration, all without the imposition of a tax. This is something that was not acknowledged in the Greenhouse Gas Pollution Pricing Act.

It does not make sense to apply a tax to reverse the environmental improvements that the farmers put in place voluntarily. However, the question remains, does it make any sense at all to apply such a tax on fossil fuels to increase the agricultural community's focus on reducing the use of fossil fuels? The answer to that is no, for several reasons.

There simply are not commercially viable, scalable alternatives to using natural gas and propane available today, but because there are not viable alternatives, the demand for fuel tends to remain unaffected by price. That makes these additional fuel charges simply an additional tax and an inefficient policy to lower carbon emissions. This very fact was confirmed by the Parliamentary Budget Officer.

The recent budget, which has been alluded to in other speeches here this evening, did put some more funds into the agricultural clean technology fund to upgrade present drying systems to a higher efficiency, but these funds only have the potential to update 500 of the 50,000 grain dryers across Canada. That is 1% of them.

Also, as opposed to granting an exemption from paying the carbon tax, they have proposed in Bill C-8 a rebate program to maintain, in their words, a “price signal” to the farm community to change their ways even though there are no viable alternatives.

I explored with several of my constituents the impact of these two approaches. My riding is a large rectangle and in the northeastern corner, Ron and Francine Verhelle farm with their family. This past year, they needed 89,670 litres of propane to dry their almost 7,000 tonnes of corn. They paid over $5,550 in carbon tax. If the 2022 conditions on their farm are the same, they are anticipating that cost to go up to almost $7,000 this year. Under the Liberal plan, the eligible farm costs on their farm would have to be over $3.2 million using the planned $1.73 per thousand in eligible farm expenses in order for that rebate to recoup their carbon tax cost. Farm input costs are definitely skyrocketing, but fortunately they will not be that high or no farmer will be in business this coming year.

Paul Tiessen and his family farm just down the road from my home farm. They are a third generation grain farm and their total natural gas bill for 2021 to dry 107,000 bushels, or just over 2,900 tonnes, of corn this past year was $10,010, of which almost $2,500 was a carbon tax. Under the Liberal proposal that would have been in place for 2021 rebating back $1.47 per thousand in expenses, they would only get a fraction of their carbon tax cost returns from this past crop.

My final point is simply to call for basic fairness in the marketplace. Our Canadian grain competes directly with American grain. It is priced off of the Chicago Board of Trade. No customer of grain will pay more for Canadian grain because it incurs a carbon tax, not if they can source it from the Americans.

The Greenhouse Gas Pollution Pricing Act did exempt gasoline and diesel fuel on the farm for this very reason and Bill C-234 is looking to correct the oversight regarding natural gas and propane for grain drying and barn heating and cooling.

Surely if the government cannot control its spending ways, it does not have to use farmers' bank accounts as a cashflow mechanism to finance its own spending. Making farmers pay this carbon tax in the fall and then having them file their taxes the following spring to apply for a rebate, all that does is return a portion of their costs plus now incurring all the administrative costs on the farm and the administrative burden on government to manage this program.

In fact, this past budget estimated that cost for the government alone to be $30 million. What does that do? All that does is serve to increase the size of government and not add any additional value to our climate goals.

In conclusion, I would again urge all members of the House to support passing a bill that removes the potential of being at cross purposes for lower greenhouse gas emissions. Please support the removal of a tax where the users have absolutely no viable options and please support basic inherent market fairness.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Madam Speaker, I would like to thank all the speakers who have presented this evening. I would especially like to thank my colleagues from Chatham-Kent—Leamington and Beauce. They are both farmers and are very familiar with the costs of operating a farm and making a living at it.

The member for Chatham-Kent—Leamington highlighted pretty much everything I wanted to talk about, but the key point I would like to highlight, in addition to that, is that we still have an outstanding issue with the fertilizer tariff in this country. That is going to add another $100 per acre to the corn crop and other crops, in addition to all the other issues we have. In addition to the carbon tax that farmers are paying to dry their grains and heat their barns, this is another tariff that has not been dealt with by the government. It is our belief that on March 2 there should be tariff relief for farmers on that. It is millions of dollars and they need the help now.

The member made another good point when he talked about how the fall economic update from the Liberal Party highlights the carbon tax rebate. It is $1.47 per $1,000, and as I said in my first speech, I thought it was $1.47 per $100. If we calculate it at $1.47 per $1,000 and $1.73 per $1,000 of eligible farm expenses, it is a slap in the face to farmers.

I welcome the Liberal member who spoke earlier today to come to my riding, the ridings of the members of Chatham-Kent—Leamington and Beauce or any rural riding. She should talk to some farmers, get in the cab of a tractor or combine, stand around while the grain is being dried in the fall and see what it is like. She would have a whole new appreciation for the programs she is trying to create.

Farmers get no credit for the carbon they sequester on farms through their crops, the fall crops they plant for cover crops, the grasslands, the hay and the hay lands. They also do not get any carbon credit for the sequestration that takes place on their ethically managed woodlots. There are thousands of acres in my riding and hundreds of thousands of acres of ethically managed woodlots across the province of Ontario and beyond. They get no credit for that.

The idea is that a farmer is somehow a huge emitter, contributor or whatever, but we should be embracing these individuals. We should be looking to them to learn some of the best practices that have been in place in this country for over 100 years. That is where we need to begin the discussion. We need to cut this unnecessary tax on farmers' natural gas and propane to dry their grains and heat their livestock barns.

We do not want farmers to walk away from their livestock barns because they can no longer afford to heat them. We want them to be able to keep those barns warm to keep the chicks warm when they are first moved into the barn, or keep the hog barns warm when the weaners are at a very young age and very small. That is what we want to do, so I would ask all members of Parliament, particularly the Liberals, to reconsider this and take a long look at what we are talking about. They can maybe replay the tapes and see.

I would like to thank all the farmers across this country for what they do day in and day out. Right now, they are in the cabs of their tractors in my area planting corn, thinking about soybeans and trying to get things right, but they are facing huge costs for fuel and fertilizer. What is it for? It is to feed the country and the rest of the world. That is what we have to keep in the backs of our minds when we are looking at all this stuff.

I would like to thank farm groups, farm families and the complete supply chain that works 24 hours a day this time of year to keep crops growing. Let us look at agriculture, the environmental good it does and the economic good it does. It is the number one economic driver in the province of Ontario, so let us support it. Farmers are a line of credit, as the member for Chatham-Kent—Leamington said, for our GST and HST rebates. They are the government's line of credit in AgriStability, and now with this new program, they will once again be the government's line of credit.

I humbly ask for support. Let us get the bill to committee. Let us have some farm groups come. Let us have some farmers come and explain the pain they are feeling right now and the relief Parliament can provide them.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

The question is on the motion.

If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.

The hon. member for Chatham-Kent—Leamington.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Madam Speaker, I respectfully ask for a recorded division.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

Pursuant to order made on Thursday, November 25, 2021, the division stands deferred until Wednesday, May 18, 2022, at the expiry of the time provided for Oral Questions.

The hon. parliamentary secretary to the government House leader.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I believe if you seek it, you will find unanimous consent to see the clock at 6:30 p.m. so that we can continue with the business of the House.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

Is it agreed?

[Some hon. members]

Agreed.

The House resumed from May 11 consideration of the motion that Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act, be read the second time and referred to a committee.

[The Deputy Speaker, Chris d'Entremont]

It being 3:21 p.m., pursuant to an order made on Thursday, November 25, 2021, the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-234 under Private Members' Business.

(The House divided on the motion, which was agreed to on the following division:)

Vote #96

[The Deputy Speaker, Chris d'Entremont]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Agriculture and Agri-Food.

(Bill read the second time and referred to a committee)