“Alberta strongly opposes the federal carbon tax exemption on heating oil, as the federal government is no longer creating minimum national standards that apply evenly across the country, and is instead creating a regime that favors one region and fuel type over others,” the provincial government said in a statement.

Last year, Prime Minister Justin Trudeau’s Liberal government announced a three-year exemption for home heating, measures he said were intended to relieve affordability concerns.

The move drew widespread criticism from a number of provincial premiers, who said it unfairly benefited voters in Atlantic Canada where home heating oil is more widely used. Climate advocates argued it undermined the carbon pricing policy.

The court challenge from Alberta’s conservative government, which frequently clashes with the federal Liberals on climate and energy issues, is the latest attack on consumer carbon pricing ahead of a federal election due to take place within the next year.

Opposition Conservative leader Pierre Poilievre, whose party is polling far ahead of Trudeau’s Liberals, has vowed to “axe the tax” if elected.

Canada’s carbon price is currently C$80 a tonne, and will increase by C$15 every year until it reaches C$170 a tonne in 2030.

—Reporting by Nia Williams in British Columbia

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The Canada Carbon Rebate for Small Businesses was announced in this year’s federal budget, and while details are still scant, it will return a portion of the price on pollution through a refundable tax credit.

The Canada Revenue Agency estimated the retroactive payments total $2.5 billion, beginning in the 2019-20 fuel charge year until the 2023-24 year.

A spokesperson said the payment amounts and when they will be made are still undetermined, but it’s critical that taxes be filed on time to qualify.

Technically, those taxes had to be filed June 30, but Ottawa implemented a two-week extension.

CRA said the rebate will equal the number of people employed by the eligible “Canadian-controlled private corporations” multiplied by the payment rate. The employees must have received T-4s.

To be eligible, the business must have employed at least one person in a designated province in the calendar year, had 499 or fewer employees throughout Canada and filed its taxes.

There is no application for the rebate; it will automatically be calculated and issued.

The designated provinces include Saskatchewan, Manitoba and Ontario for all fuel charge years, Alberta for 2020-21 and beyond and the four Atlantic provinces for 2023-24.

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A tax was first proposed in February by government-commissioned experts to help Denmark reach a legally binding 2030 target of cutting greenhouse gas emissions by 70 per cent from 1990 levels.

The centrist government late on Monday reached a wide-ranging compromise with farmers, industry, labour unions and environmental groups on policy linked to farming, the country’s largest source of CO2 emissions.

“We will be the first country in the world to introduce a real CO2 tax on agriculture. Other countries will be inspired by this,” Taxation Minister Jeppe Bruus of the centre-left Social Democrats said in a statement on Tuesday.

While subject to approval by parliament, political experts expect a bill to pass following the broad-based consensus.

The deal proposed taxing farmers 300 Danish crowns (C$58.77) per tonne of CO2 in 2030, increasing to 750 crowns (C$146.92) by 2035.

Farmers will be entitled to an income tax deduction of 60 per cent, meaning that the actual cost per tonne will start at 120 crowns and increase to 300 crowns by 2035, while subsidies will be made available to support adjustments in farm operations.

The tax could add an extra cost of 2 crowns per kilo (2.2 pounds) of minced beef in 2030, Minister for Economic Affairs Stephanie Lose told public broadcaster DR. Minced beef retails from around 70 crowns per kilo (C$13.71) at Danish discount stores.

New Zealand this month scrapped plans to introduce a similar tax after facing criticism from farmers.

But while Danish farmers had expressed concerns that the country’s climate goals could force them to lower production and cut jobs, they said the compromise makes it possible to maintain their business.

“The agreement brings clarity when it comes to significant parts of the farmers’ conditions,” the L&F agriculture industry group said.

—Additional reporting by Alison Withers and Stine Jacobsen

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Finance Minister Chrystia Freeland made little mention of agriculture in her speech following the tabling of the budget this afternoon, though she touched on issues like carbon pricing and green technology.

However, chapter three of the budget, titled “lowering everyday costs” features three sections on reducing costs for farmers.

The first, “Lower Costs and Fairer Treatment for Farmers” announces that the government will be launching consultations on interoperability in June.

“This is part of broader work the government is undertaking to support the right to repair and interoperability,” the section reads.

The section “Interest Relief for Farmers” proposes $64 million in funding to Agriculture and Agri-Food Canada “to support a $250,000 interest-free limit on Advance Payments Program loans for the 2024 program year.”

Finally, “Protecting Farmers from the Costs of Climate Change” reads that “the federal government is committed to working with industry partners, such as the Canadian Cattle Association, to explore avenues to ensure farmers get support quicker and more efficiently in times of need.”

In her speech, Freeland highlighted the Canadian carbon rebate, which she said in French will be “delivering hundreds of dollars to Canadians every three months.”

“Eight out of 10 Canadians get back more than they pay in the provinces where the federal price on pollution applies,” she continued.

“We are delivering on our promise to return carbon pricing proceeds to small and medium-sized businesses.”

She said that the Canada Carbon Rebate for small businesses will “soon return over $2.5 billion directly.”

The budget’s primary focus is housing, though it also involves the launch of a new national school food program and the first phase of a national pharmacare plan.

On housing, Freeland said the government would be focusing on “making life cost less.” with a plan to build nearly four million news homes by 2031.

“It begins with building more homes at a pace and scale not seen since after the Second World War,” Freeland said.

The budget also includes an outlined electric vehicle supply chain investment tax credit, which will “introduce a new 10 per cent … tax credit on the cost of buildings used in key segments of the electric vehicle supply chain.”

Freeland said this is “to attract companies investing across the electric vehicle supply chain.”

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Denmark, a major pork and dairy exporter, could become the first country in the world to levy an emissions tax on farming, a move that has broad political backing in the country, after New Zealand last year pushed back such a tax to the end of 2025.

A carbon tax on farmers could help Denmark achieve its legally-binding 2030 target of cutting greenhouse gas emissions by 70 per cent from 1990 levels.

But such a measure would also mean higher costs for farmers and as a consequence reduce production by as much as one-fifth, a government-commissioned group said in a report on Wednesday.

A tax of 750 Danish crowns (C$147) per million tons of carbon dioxide (CO2) emitted would have the biggest impact. The group also considered lower taxes of 375 crowns and 125 crowns.

“These models are based on something very disappointing, namely that climate reduction can only come by reducing production,” Peder Tuborgh, CEO of dairy producer Arla Foods, told Reuters.

Tuborgh said new technologies had helped Arla’s 9,000 farmers in Denmark, Sweden, England, Germany and Benelux reduce emissions by 1 million tons in the last two years.

“There is an innovation path,” he said. “We would like to continue that journey, rather than having to shut down our production.”

More than half of Denmark’s land is farmed, with agriculture accounting for about a third of the country’s carbon emissions, according to Danish climate think tank Concito.

The agriculture sector has become a political battleground as the European Union strives to meet its net zero emissions target by 2050. Farmers across the bloc have been protesting for weeks, saying they are facing rising costs and taxes, red tape, and excessive environmental rules.

The scenarios laid out by the government advisors would reduce agricultural production by between six per cent and 15 per cent, with cattle and pig production falling by around 20 per cent under the harshest taxation scenario.

“It will be relatively dramatic if we chose to go down that path,” Jais Valeur, CEO of Europe’s biggest pork producer Danish Crown, told TV2.

“It’s key that we encourage our best farmers to become better so that we can lead the way for a sustainable transition,” he said.

–Reporting for Reuters by Isabelle Yr Carlsson, Louise Rasmussen and Stine Jacobsen.

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The PBO provides independent economic and financial analysis to Canada’s Parliament.

Initially, the bill proposed to exempt fuels used in grain drying, barn and greenhouse heating from the price of carbon for eight years. The PBO projected farmers would have saved $115 million in carbon taxes by 2026 if this version had passed.

The current, heavily amended version, will reduce those savings to $26 million.

This doesn’t include any carbon price rebates farmers might receive.

The Senate amended the bill to remove exemptions for heating buildings and to reduce the bill’s sunset clause to three years from eight.

The original bill passed 176 to 146 in the House of Commons in early 2023. It is again under debate in the House, where Conservative MP Ben Lobb put forward a motion that the bill be stripped of its amendments and returned to the Senate.

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“We are very hopeful that Members of Parliament will continue to show their support for farmers and that they won’t flip flop and change their vote,” said Dave Carey, co-chair of the Agriculture Carbon Alliance.

Bill C-234, which would amend the Greenhouse Gas Pollution Price Act, was once again the subject of debate as Parliament resumed today. Conservative MP Ben Lobb tabled a motion to essentially reject the Senate’s amendments to the bill.

In an email exchange, Carey explained that if this motion is carried, the amendments made in the Senate would be eliminated. However, the bill would return to the Senate for another reading.

Late last year, the Senate voted to amend Bill C-234 to remove greenhouse and barn heating from the proposed exemptions, and to reduce the bill’s sunset clause to three years from eight. This left only the proposed exemption for fuels used to dry grain.

If the motion passes, Carey said he doubted the Senate would try to amend the bill again.

“That would raise a legitimate question of constitutionality and the role of the Senate,” he said.

When the bill passed its third reading in the House of Commons in March 2023, it did so with support from the NDP, Bloc Quebecois, Conservatives and a few Liberal MPs. Today, alongside Conservative MPs, NDP MP Alistair MacGregor spoke in favour of the motion, as did Liberal MP Kody Blois. Liberal MP Kevin Lamoureux spoke against it.

Bloc Quebecois MP Yves Perron, speaking through French translation, said he is is in favour of Bill C-234 but said he was concerned that the bill would be embroiled in a ping-pong match between houses.

He suggested the bill should be passed as-is while it’s in the House’s grasp.

“We have a gain now on the grain drying. I think we should take it,” Perron said in an interview, adding that further work could be done afterward to get an exemption for building heating.

He cited the partisan environment exhibited in the Senate, which included accusations of intimidation during debate around the bill.

“If we send back the bill to the Senate, well, when will it come back?” he said.

Perron said he’s in favour of widespread carbon price exemptions for agriculture because of the need to compete with subsidized farmers in the U.S. and E.U.

The motion did not go to a vote today. Carey said he’s hopeful it could be voted on next Tuesday.

Proponents of Bill C-234 are concerned it will be endlessly delayed and die on the order paper.

“With the carbon price set up to increase this April again, we are urging the Liberals not to delay it and to let it go to a vote as soon as possible,” Carey said.

–Updated Jan. 30. A previous version referred to Yves Perron as leader of the Bloc Quebecois.

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Yesterday evening, senators read Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act, for the third time, and passed it.

The bill received two amendments in the Senate. On Monday, senators voted to reduce the bill’s sunset clause to three years from eight. Previously, senators amended the bill to remove barn and greenhouse heating from proposed carbon price exemptions in the bill.

Farm groups and government officials aligned with the bill have expressed concerns that, since the bill must now be returned to the House of Commons for further debate, it will be delayed until it dies on the order paper.

According to its online schedule, the House of Commons will rise for the year on Dec. 15.

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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Senator Yuen Pau Woo introduced the amendment on Dec. 7, saying it would align it with the deadline on the Liberal government’s heating oil carbon price exemption.

This is the second amendment to Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act. The first amendment removed fuels for heating barns and greenhouses from exemptions proposed in the bill.

Farm groups and government officials aligned with the bill have expressed concerns that, since the bill must now be returned to the House of Commons for further debate, it will be delayed until it dies on the order paper. Senators aligned against the bill have been accused of using delay tactics to try to kill a bill the Liberal government doesn’t like.

Today, the National Farmers Union (NFU) released a statement calling on political parties to prioritize and pass the bill.

In the statement, former NFU vice-president Glenn Wright said that while the NFU supports a price on carbon in general, farmers don’t have viable alternatives for drying grain.

“Because farmers are so climate-dependent—so vulnerable—it is in farmers’ interests that Canada and all nations reduce emissions as quickly as possible. Canada’s pollution-pricing system is a crucial part of that effort,” he said. “In this one case, however, because there are no alternative grain drying options for farmers, a temporary exemption is the right policy.”

He also said an amendment to remove an exemption on fuels for building heating creates a “pressing need” for financing and incentives for farmers to adopt more efficient heating options.

“The NFU recognizes that farmers can improve building efficiency and switch heating sources to clean technologies like heat pumps, but these renovations are capital intensive and farmers will need extensive financial support to decarbonize the heating of barns and greenhouses,” he said.

–updated Dec. 12 to add by how many years the sunset clause is reduced. 

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

–

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This would align it with the deadline on the Liberal government’s heating oil carbon price exemption, said Senator Yuen Pau Woo, who tabled the amendment.

Bill C-234 proposes exempting fuels for grain drying from the price on carbon. It was recently amended to remove fuels for barn and greenhouse heating from the proposed exemptions.

Senator Woo’s amendment, if passed, would reduce the bill’s sunset clause to three years from eight.

“In my view, Bill C-234 is not good public policy,” said Woo. “This is why I oppose it as much as I oppose the Liberal government’s exemption for home heating oil.”

“Unfortunately, we have no ability to debate the home heating oil exemption,” he added.

Senator David Wells, who sponsored the bill in the Senate, spoke in opposition to the amendment. He said that while in committee debates in the House of Commons, MPs had agreed to reduce the sunset clause from 10 years to eight.

“There was no debate at committee on that in the other place, and they all agreed that eight years was fair,” Wells said. “Now we’re hearing from Senator Woo that not 10 years, not eight years, but three years is fair.”

Debate adjourned before the amendment could go to a vote.

Meanwhile, Senators agreed to send earlier complaints of bullying to the Senate’s ethics committee for further examination. This relates to a question of privilege raised in late November by Senator Raymonde Saint-Germain, which alleged some Conservative senators attempted to intimidate colleagues into giving way on the bill.

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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