Mr. Speaker, the federal fuel charge is generally not paid directly by consumers of fuel. Rather, the federal fuel charge is generally paid to the Canada Revenue Agency through monthly returns filed by producers or distributors of fuel. These returns only account for aggregate amounts. Typically, once the fuel charge has been paid by a fuel producer or distributor, there is no further reporting of who finally directly bears the cost of the federal fuel charge.
The Greenhouse Gas Pollution Pricing Act, or GGPPA, provides significant up-front relief for farmers from the fuel charge. Notably, the GGPPA provides farmers with relief from the fuel charge for gasoline and light fuel oil (e.g., diesel) used in tractors and other farm machinery. The relief is provided through the use of exemption certificates when certain conditions are met. As the fuel charge is ultimately not paid by the registered distributor upon delivery when an exemption certificate applies, there is no reported amount of this relief.
In addition, recognizing that many farmers use natural gas and propane in their operations, the Government of Canada recently implemented a refundable tax credit to return a portion of fuel charge proceeds directly to farming businesses operating in backstop fuel charge provinces, currently Ontario, Manitoba, Saskatchewan and Alberta, starting in the 2021-22 fuel charge year. The credit aims to help farmers transition to lower-pollution ways of farming, while also maintaining the price signal to reduce emissions.
It is estimated that farmers will receive approximately $100 million in the first year with this amount increasing to approximately $122 million for the 2022-23 fuel charge year. Amounts returned for the 2023-24 fuel charge year and beyond are expected to increase further as the price on pollution continues to rise. Actual amounts returned will depend on the number of farmers claiming the credit and their eligible expenses. As this is the first year of implementation, further information on the actual amount returned through the return of fuel charge to farmers tax credit will not be known until the following fiscal year.