Not in this legislation, no.
Evidence of meeting #152 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was provinces.
A recording is available from Parliament.
Evidence of meeting #152 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was provinces.
A recording is available from Parliament.
11:25 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
Not in this legislation, no.
11:25 a.m.
Liberal
The Chair Liberal Wayne Easter
There would be one exception, though, under current law. That is where GST is rebated to various users, such as farmers, fishermen, etc. They have their full GST rebated, and it would apply.
11:25 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
My colleagues can speak to that in more detail. There are existing obligations and arrangements with respect to collecting and returning GST. Those are not affected at all, but they are all completely outside of this legislation, as my colleagues explained.
11:25 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Will the carbon tax proposed in this legislation achieve Canada's obligations to reduce greenhouse gases under the Paris Accord? Will we meet our targets?
11:25 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I will come back to the response I provided to your colleague, Mr. Albas, which is that the carbon pricing across Canada will make a significant contribution to reducing emissions in Canada. As such, it is considered to be a foundational measure within the pan-Canadian framework, but it is not the exclusive measure. It is not the only measure the federal government or the provinces are relying on to reduce emissions and to attain the Paris target.
11:25 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
How many million tonnes in annual emission reductions does Paris require Canada to achieve?
11:25 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I don't know. I can get you that number before the end of this hearing. That will be a reduction relative to a baseline of 2005. That's how we established the target. The study we released last week indicated that pricing across Canada by 2022 will result in emission reductions of approximately 30 megatonnes. The federal government and the provinces have committed to collectively reviewing where we go with carbon pricing after 2022, so it's not possible beyond very broad generalities to predict what additional contribution carbon pricing might make between 2022 and 2030.
Again, it is a foundational measure designed to change behaviour, reduce emissions, and thereby make a contribution. It is not the exclusive method of attaining our target.
11:25 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
You say after 2022 there could be additional measures, when the price would go up to $100 or $200 a tonne.
11:25 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
The future of carbon pricing is going to be for the federal, provincial, and territorial governments to determine before 2022. If nothing changes, and in particular if nothing changes in this legislation, then the carbon price we've established in this legislation for 2022 would remain in place, and that's $50 per tonne.
A legislative change would be required to change the price. Similarly, provinces with their own pricing system will need to make legislative or regulatory changes.
11:30 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Has someone on your dais been able to find the annual reductions we are required to achieve under Paris?
11:30 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I'm asked this all the time. I should have the number. I will get it. Maybe we can—
11:30 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I will respond. I'm not trying to duck the question.
11:30 a.m.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I just need a few minutes to check my numbers.
11:30 a.m.
Liberal
The Chair Liberal Wayne Easter
—and come back to you.
It was also in the documentation that somebody mentioned yesterday.
Mr. Poilievre, do you want to think about for awhile? We'll go to this side and come back?
11:30 a.m.
Conservative
11:30 a.m.
Liberal
The Chair Liberal Wayne Easter
Yes.
Mr. Sorbara, then Mr. Dusseault. Then we'll back to on Mr. Poilievre.
May 8th, 2018 / 11:30 a.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Chair. Welcome, everyone.
Yesterday during our finance committee meeting, I had wanted to get some clarification. We know this legislation pertains to a backstop where a carbon pricing system does not exist in a province or territory. But for farms and farmers, whom we support fully, can you just outline the exemption with regard to fuels used on farms, if you may, please.
11:30 a.m.
Director General (Legislation), Sales Tax Division, Tax Policy Branch, Department of Finance
Sure.
I may go into a bit of details here—
11:30 a.m.
Director General (Legislation), Sales Tax Division, Tax Policy Branch, Department of Finance
—but these are detailed rules.
In the case of a farmer, a registered distributor—the person who would normally pay the fuel charge—can deliver gasoline or light fuel oil. In the case of farmers, that is essentially diesel. They can deliver that to a farmer if the farmer certifies four things. It's basically an exemption certificate. If an exemption certificate is presented—whose conditions I'm going to describe—the fuel distributor doesn't have to pay the fuel charge on the fuel that is delivered to the farmer. Therefore, the carbon priced is not built into the selling price of the fuel.
The farmer needs to certify that essentially he's a farmer, that the fuel is being delivered at a location that is a farm, that the fuel is exclusively for use in the operation of eligible farm equipment, and that substantially all of the fuel is for use in eligible farming activities. As I said, if these conditions are met, the fuel distributor will be allowed to deliver the fuel without the fuel charge applying.
The concepts of farmer, eligible farm equipment, and eligible farming activity are defined terms within the legislation:
farmer means a person that carries on a farming business with a reasonable expectation of profit.
eligible farming machinery means property that is primarily used for the purposes of farming and that is
(a) a farm truck or a tractor;
(b) a vehicle not licensed to be operated on a public road;
(c) an industrial machine or a stationary or portable engine; or
(d) prescribed property; but does not include
(e) a vehicle that is an automobile as defined in subsection 248(1) of the Income Tax Act;
(f) property that is used for the purpose of providing heating or cooling to a building or similar structure; or 20
(g) prescribed property.
eligible farming activity means
a) the operation of eligible farming machinery on a farm for the purposes of farming;
(b) the operation of eligible farming machinery for the purposes of going from a location at a farm to another location at a farm; or
(c) a prescribed activity.
This is essentially how the exemption certificate works for farmers. I'm also going to add more information here.
Under this legislation the general rule is that if you're entitled to use a exemption certificate, you have to register with the CRA and produce monthly returns. In the case of farmers, that requirement has been removed. They do not have to register with the CRA.
11:30 a.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Okay.
Is this exemption certificate an annual thing that the farmers will have to complete? Or, once they have received it, and there's a change in their business conditions, they will have to inform the CRA?
It's great to hear about the exemption for our farmers.
Will they have to renew this annually? Or will this be something they're given and until there is a change in their business and CRA is informed, then they will have to go back.
11:35 a.m.
Director General (Legislation), Sales Tax Division, Tax Policy Branch, Department of Finance
On the exemption certificate, the CRA will likely publish a model with the information that is required. It is a piece of paper that the farmer is going to fill out. Essentially it works for every delivery of fuel the farmer will receive. He will have to present the certificate.
You can foresee that in an ongoing relationship with a fuel supplier, the exemption certificate may be on record at the fuel distributor. Basically he's just asking whether the farmer will use the exemption certificate when he wants delivery of a particular fuel.
11:35 a.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
I just want to clarify something. In terms of vehicles, you said that as defined in the Income Tax Act, if a farmer has a Ford F-250 pickup truck, which can be used to drive around town but also to deliver vegetables, fruits, or whatever they're growing and working hard at, that vehicle will still be exempt, because it is used for work purposes but can be used for non-work purposes on an evening or weekend.