Updated fiscal cost of Bill C-234

On June 23, 2021, the Parliamentary Budget Officer (PBO) published a legislative note of the cost of the federal carbon tax exemption for marketable natural gas and propane used by eligible farming machinery as provided in Bill C-206, 43rd Parliament, 2nd Session.

On February 7, 2022, a related bill, Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act, was introduced in Parliament. The bill expands the list of farming machinery eligible for the federal carbon tax exemption to include: a) property used for the purpose of providing heating or cooling to a building or similar structure, including those used for raising or housing livestock, and; b) grain dryers.¹

The PBO has estimated the cost of C-234. Compared to the previous cost estimate for C-206, PBO has projected total marketable natural gas and propane use in the agricultural sector for Alberta, Saskatchewan, Manitoba, and Ontario based on:

• New projections of natural gas use in the industrial sector (by province) in Canada’s Energy Future Current Policies Scenario (EF2021) published by the Canada Energy Regulator (CER).²

• Projections of propane demand other than petrochemical demand included in the CER EF2021.³

The PBO continues to use the assumption that the total projected usage of natural gas and propane by farmers are eligible for the carbon pricing exemption, as a very small portion of these fuels have been assigned for personal use.

Bill C-234 costing

Breakdown

Alberta

Saskatchewan

Manitoba

Ontario

¹ Parliament of Canada, Bill C-234, accessed April 04, 2022

² The Current Policies Scenario includes policies publicly announced prior to August 2021. It therefore includes the increased carbon pricing under the Federal Strengthened Climate Plan.

³ Other demands of propane are used as a proxy for the total finale energy use of propane.