By Chantal Wagner

Begins January 1, 2020

Federal carbon tax – what producers need to know before the new year

Dec 19, 2019 | 4:43 PM

Though the Kenney government repealed the provincial carbon levy in June of this year with Bill 1, the federal government is imposing a new carbon tax in Alberta.

But what do farmers need to know and what’s the cost?

Tom Steve, General Manager of the Alberta Wheat and Alberta Barley Commissions says farmers need to submit a one-time farm fuel exemption certificate.

“They need to fill out a Canada Revenue Agency form to be able to be exempted from that fuel tax which is coming in very soon on January 1, 2020.”

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Forms must be filled out before December 31 of this year and be provided to your farm fuel retailer.

“So when you have that first delivery of fuel to your farm in January if you haven’t filled out that CRA form you’re going to be taxed. We have estimated for example on a 15,000-litre fuel tank on a farm that would be an $800 touch, so people need to get those forms in,” he said.

Steve says producers are entitled to that exemption for marked gasoline and diesel used to fuel their tractors and trucks on the farm.

However, farmers will still be taxed on propane and natural gas for grain drying, which will be an additional cost for Alberta farmers on January 1 next year.

According to Steve, “That’s been a huge cost with the harvest conditions we’ve had in Alberta for the last few years. Maybe not so much in the dryer areas, but there’s more and more grain drying going on and that is not exempt.”

The Alberta Wheat and Barley Commissions have urged the Government of Canada to exempt all fuels used for farm-use from the federal carbon tax – including propane and natural gas for grain drying. But that request has been rejected so far.

Steve adds the federal Agriculture Minister has indicated she will consider that exemption but needs more information.

He says data is being compiled, “Just as an example, last year (2018) we calculated the cost of grain drying in Alberta was upwards of $45-million a year to Alberta farmers. And of that cost, up to $5-million were being paid in carbon levies because that was under the old NDP carbon tax. So it’s a significant amount of money.”

There are no calculations for 2019 yet, but Steve estimates those numbers to be much higher; being the poor harvest conditions this year.

Many farmers are still running their grain dryers every day trying to get their grain in condition to get to market, according to Steve.

Meantime, the Alberta government is challenging the new federal carbon tax constitutionally with talks that started this week. No ruling has been issued yet.

For the federal carbon tax exemption form, producers can contact their farm fuel retailer.