Updated fiscal cost of Bill C-234

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.

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:

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

$ millions 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31
Natural gas 47 62 76 90 103 116 129 141 153
Propane 9 12 15 18 21 24 27 30 33
Total 57 74 92 108 124 140 155 171 186
Carbon price ($ per tonne) 50 65 80 95 110 125 140 155 170

Breakdown

Alberta

$ millions 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31
Natural gas 11 14 17 20 23 27 30 33 36
Propane 1 2 2 3 3 3 4 4 5
Total 13 16 20 23 26 30 34 37 41

Saskatchewan

$ millions 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31
Natural gas 7 9 11 13 15 17 18 20 22
Propane 0 0 0 0 0 1 1 1 1
Total 7 9 11 13 15 17 19 21 23

Manitoba

$ millions 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31
Natural gas 0 0 0 0 0 0 0 1 1
Propane 2 2 3 3 4 4 5 5 6
Total 2 2 3 4 4 5 5 6 6

Ontario

$ millions 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31
Natural gas 29 39 48 56 65 73 80 87 94
Propane 6 8 10 12 14 16 17 19 21
Total 36 47 58 68 78 88 98 107 116

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.