House passes bill creating carve-outs for farmers in Canada's carbon pricing scheme

A field of wheat is pictured near Cremona, Alta., Tuesday, Sept. 6, 2022. THE CANADIAN PRESS/Jeff McIntosh

OTTAWA -

A private member's bill that would create specific carve-outs for farmers in Canada's carbon pricing scheme has passed in the House of Commons.

The bill would exempt farmers from paying for emissions from natural gas and propane they use for certain activities performed on their farms, such as drying grain, preparing feed, irrigating and heating barns.

It passed with the support of Conservative, NDP, Bloc Quebecois and Green Party MPs, with a few Liberals, including agriculture committee chair Kody Blois, joining the opposition parties to vote in favour.

The private member's bill introduced by Conservative MP Ben Lobb in February 2022, which would not exempt farmers from the carbon price for activities performed off-site, will now be debated in the Senate.

Farmer groups have said they are facing rising production costs, and the proposed law would give them critical financial relief from rising costs.

The Agriculture Carbon Alliance, which was created by industry groups in 2021 in response to the federal Liberals' climate policies and advocates for sustainable farming, celebrated the bill's progress on Thursday.

"This legislation will provide farmers with the resources to invest in innovative and sustainable on-farm practices, while ensuring the stability of our food supply," said Dave Carey, the group's co-chair, in a statement.

The executive director of one of its members, the Grain Growers of Canada, said the law will offer significant relief if it is passed.

"As long as we don't have an alternative to fossil fuels, then there is no sense in punishing Canadian farmers for growing food," Erin Gowriluk said.

Not all are celebrating the law's advancement, however.

Tim Gray, executive director of the advocacy group Environmental Defence, said the law would weaken the government's response to climate change.

"Exempting these high-emission activities from carbon pricing for farmers will only further encourage other sectors to demand similar treatment," he said in a statement.

"This is already a problem as many industries, especially the oil and gas sector, have successfully lobbied for, and achieved, favourable treatment, which allows them to pay a much lower carbon price than others, regardless of their lack of actual degree of being energy intensive and trade exposed."

Agriculture Minister Marie-Claude Bibeau maintains that the federal government is helping farmers reduce their carbon footprints and ease financial burdens through a $3.5-billion sustainable agricultural partnership with provinces.

The federal carbon price already features an exemption for gasoline and light fuel oil costs used in tractors and trailers.

But farm groups have long contended that further exemptions are needed, and have at times disputed the federal government's characterization of how much the carbon price is costing producers, especially when it comes to drying grain. Grain must be dried before it can be stored and sold, particularly during wet harvests.

The bill that will now be debated in the Senate would only carve out exemptions for farmers who dry grain on their properties, and would not apply to off-farm activities. The law also includes a sunset clause that would allow a government to add, remove or renew the exemptions in eight years.

A previous bill introduced by a Conservative MP and widely supported by farm groups, which would have carved out similar exemptions, died on the order paper prior to the 2021 federal election.

Bibeau responded to farmers' concerns at the time by announcing dollars to help producers make their own grain-drying operations more environmentally sustainable.

The federal government says it is now spending $37.1 million on 99 grain drying projects as part of its $495.7 million Agricultural Clean Technology program.

Gowriluk said that Russia's invasion of Ukraine has had an impact on the way that federal politicians discuss agricultural policy, arguing that the conversation to focus on what Canada can do to help internationally.

A significant part of that is to "grow as much as we possibly can," she said.

"There's an increasing recognition from Canadian politicians that this isn't easy, and if there's anything they can do to alleviate the burden, and help keep farmers in the green rather than the red, then they're prepared to step up and do that."

Though it is rare for private member's bills to make it all the way through Parliament, minority government situations can create more collaboration between parties.

A second private member's bill focused on the Liberals' climate policy passed in the House of Commons during the same sitting this week, with support from Liberal MPs and ministers.

Green Party Leader Elizabeth May proposed the law, which would require the government to develop a national strategy to address environmental racism within two years of its passage.

A previous version of the bill, introduced by former Liberal MP Lenore Zann, also died on the order paper in 2021 prior to the election.

May acknowledged this week during debate about the bill that the law will require the government to play ball.

"It will then need to have the support from the government of the day and the support of the finance minister to fund the programs, so that communities of colour, Indigenous communities and poor communities are not left without access to environmental justice," she told MPs.

This report by The Canadian Press was first published March 30, 2023.