Agriculture Committee on March 9th, 2021

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I come from a province where we have our own provincial carbon tax, so we are not subject to the federal carbon tax. In fact, our carbon tax was set up by a conservative government. Our “conservatives” like to call themselves “liberals”, but that's just how B.C. operates.

Looking at existing provincial precedents, in B.C. propane is still subject to the carbon tax, but it's free from the motor vehicle tax. Were you looking at any provincial precedents in other jurisdictions to help give you some insight on how to develop this bill?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

We did look to B.C., particularly with respect to the exemptions that were given. That gave us inspiration as well. As I said, we got support from the NDP—thank you very much, Mr. MacGregor—and from the Green Party. We really cast this as a common sense agriculture solution that I believe will actually give additional resources to farmers so they can help fight climate change.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I've spoken to a lot of farmers and received a lot of correspondence on Bill C-206 and, as you said, there is pretty much near unanimous support for the bill.

I see that the government is concentrating on making investments in clean technology, energy efficiency, fuel switching and other technologies on the farms. I think that's great, but it's going to take some time for these to come into effect. It seems to me that Bill C-206 can act as a bridge until these technologies make themselves available. Wouldn't you agree with that?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Yes, a hundred per cent. I could not agree in any stronger terms. The farmers and the stakeholder groups we talked about all want to fight climate change. Everyone here wants to fight climate change. However, there just isn't an economically feasible alternative right now.

Certainly, let's fund innovation. I would support the government, and I support your saying that, but right now we have farmers in very difficult times. They're desperately needing a break, and this could be a small break that might save the family farm.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Yes, and I think our committee's next study is going to provide a lot of great testimony on that and, hopefully, some great recommendations.

That uses up my time. Thanks so much, Mr. Lawrence.

Thank you, Chair.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. MacGregor.

We'll go to the five-minute round.

Mr. Epp, I guess you'll share your time with Mr. Lehoux.

You have five minutes. Go ahead.

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

Thank you, Mr. Chair.

On behalf of the farmers in Chatham-Kent—Leamington and everywhere else, thank you to my colleague MP Lawrence for bringing this bill forward.

I'm going to pick up on some comments you made earlier.

Minister Bibeau was at committee earlier and did testify. It was stated that the average carbon tax charges to farms were between $210 and $819 per farm, or very insignificant numbers. That was with the assumed backstop of $50 per tonne. Yet the Federation of Independent Business has estimated the cost at $14,000. That was based on the PBO report, which you've touched on.

Are these shifting numbers due to shifting practices in the agriculture sector, or is this more an increasing awareness? Can you comment on the discrepancies, please?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

This is one of the achievements of this private member's bill, as I've said. It's that we've been able to change the dialogue.

Initially, the Minister of Agriculture kept saying that this is an insignificant or not a big cost, but the stakeholders—and I have to give it to them—and the farmers came out in unison and said, yes, this is a big impact. Right? Every stakeholder group that I know of is supporting this legislation, because they know what impact the carbon tax is having on farmers.

It's an inequitable distribution. It's part of the economics of being a farmer that often they are price-takers and, unlike other industries, they can't just push it down the lane. As everyone in the agriculture committee knows, the margins are very thin. Farmers have to work enormous hours just to pull in an income.

Whether we're talking about APAS or CFIB, they have all said that this is tens of thousands of dollars in costs for farmers. In a very tight market and a very difficult year of the pandemic, wouldn't it be great if we could extend a bit of a break to our farmers?

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

The greenhouse sector is a huge one in my riding. I know they have a partial exemption on their fuels, but they actually burn natural gas, scrub their emissions and recycle CO2 back into their greenhouses.

Can you comment on how the whole carbon tax regime takes this into account?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

The key is that we're equitable and we're fair to our farmers. To be generous, I think maybe it was an oversight in the original Greenhouse Gas Pollution Pricing Act that farmers weren't dealt with equitably.

I'm sure that farmers, as we return money back to their pockets, will not only reinvest in their community, but they will also invest in agriculture innovation, of which farmers have been drivers.

Thank you for the excellent question.

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

Thank you.

I'll cede the rest of my time to my colleague, Monsieur Lehoux .

[The Chair, Liberal, Pat Finnigan]

You have the floor, Mr. Lehoux.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I'd like to thank my colleague Mr. Lawrence.

There were two interventions before mine, those of my colleagues Mr. Perron and Mr. MacGregor, who spoke about alternatives. It's very important to talk about this when we want to remove propane and barn heating. It has to be exempt now.

I don't know your point of view on that, Mr. Lawrence. In Quebec right now, we can't ask for that. One of the alternatives might be electricity that could be used much more extensively. Right now, the problem is affecting electricity with three-phase power in the regions so that farmers can get affordable electricity at a lower price. That isn't the case right now and it won't be the case until we have alternatives.

You still think it's relevant to set aside the tax on propane and barn heating. Is that correct?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Mr. Lehoux.

Next time,

I will respond in French. I'm still working on my French.

The reality of the market right now is that farmers can't all switch over to other more sustainable ways of grain drying. I think would be great for the committee to study that. I would definitely be interested in hearing from some of the experts.

As Mr. MacGregor rightfully pointed out, right now farmers are in a difficult position. This provides a nice bridge to the future. Giving farmers this break of reducing the cost a little bit and helping them out a little bit has been done in other places, including in Canada.

The reality is that natural gas and propane are cleaner than diesel and gasoline. Some might say they're marginally cleaner, but they are. Why would we not include this exemption when it already exists for marginally dirtier fuels?

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lawrence.

Thank you, Mr. Lehoux.

Now, we'll continue with Mr. Drouin for five minutes.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Lawrence.

[The Chair, Liberal, Pat Finnigan]

Mr. Drouin, you have the floor.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

Thank you to Mr. Lawrence.

I supported your bill, but for different reasons. I had a made a commitment to farmers back home and I thought I would honour that commitment.

You had a chat with Mr. MacGregor with regard to paragraph (f) and paragraph (c) of eligible farming activity. Interpretation of the law and how somebody views that is important. Do you not see the conundrum that could create because of the lack of clarity that you present in your bill or section versus another section? Somebody could take the government to court—the David Suzukis of the world or other organizations—saying that the Government of Canada is wrong and the interpretation is wrong. They'd bring us to court and then they'd side on the particular heating and cooling aspect of the bill.

Did you have those conversations with certain groups when you drafted the bill?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

No. No one ever brought that up as a concern until Minister Bibeau did. Let me just be clear here in what the definition says. It says that the exemption is for eligible farming activity, which means the operation of eligible farming machinery on a farm for farming purposes. Then it says, “an industrial machine”.

No one would say that a grain dryer is not an industrial machine. No one would say that a grain dryer is not farming machinery. There's no other purpose. You're not going to go tanning in a grain dryer. This is a common sense understanding. As a lawyer, I can tell you, Francis, anyone can sue anyone for anything at any time. It's a matter of whether it has any weight.

As I said, I want the tone of this to be collaborative. If the government says to me, “You know what? We like your bill and we want to include grain drying in there,” I'm not going to object. Let's make the amendment, and if that is the difference between this bill passing and not, let's include it.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

We're discussing this bill, but at the time this particular act was presented, around two or three years ago, you and I and all Ontario MPs were not subject to lobbying on this because the government of the day had presented its own carbon pricing mechanism. Knowing that climate is different and weather is different from region to region, do you not believe that we should be asking the provinces to implement such a system as a carbon mechanism, especially now that the U.S. has signed on to the Paris Agreement, so that we don't have to bring an “Ottawa knows best” approach?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

That's not really within the scope of this bill. I appreciate the question. I guess what I can tell you, Mr. Drouin—and thank you for your support, by the way—is that the provincial minister of the environment did come out in support of Bill C-206, which of course will affect Ontario. The broader discussion of the carbon tax is really not within the scope of this bill. I'm happy to have a discussion with you at a later point.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

But it is the reason we're here, right?

To go back to your bill, there are rumours about your leader potentially announcing that he's supportive of a carbon pricing mechanism. We've talked about potential technologies being out there. I know our Minister of Environment has announced that there will be $170 per tonne, basically in 10 years, which sends a market signal to industry, to researchers, to innovators out there that yes, they can potentially present new technologies.

We've been back and forth in this country over carbon pricing for the past 15 to 20 years. At some point we have to move forward. I agree with the objectives of the bill, but we all have to play our part in this. Are you advocating for a complete exemption forever, or a partial exemption for the next 10, 15 or 20 years, until the market can adapt?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I'll stay squarely within the scope of this legislation. I do appreciate your attempting to get me to comment on things I should not be commenting on inside the scope of this committee. Well done.

With respect to this legislation, it is an exemption on natural gas and propane for qualifying farmers. The bill does not have a date as to when it will end, just like the greenhouse gas act, but what I would say is that this exemption will be more critical with the automatic escalators as the carbon tax increases year after year and gets higher and higher.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lawrence.

Thank you, Mr. Drouin.

Mr. Perron, you have two and a half minutes.

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

Mr. Lawrence, I'll continue along the same lines.

Obviously, we want to reduce greenhouse gas emissions in the medium and long term.

If the bill isn't passed, or if it is partially passed after being amended, what should we do with the money collected for the carbon tax?