Bill to Exempt Farmers From Carbon Tax in Jeopardy After Senate Amendment

The Senate of Canada building and Senate Chamber in a file photo.(Sean Kilpatrick/The Canadian Press)

After a tight vote, the Senate has decided to amend a Conservative bill that would further exempt farmers from the carbon tax, signalling its probable return to the House of Commons where the Liberal government could put it to rest through procedural manoeuvres.

“Regrettably, the passage of this amendment means that the bill will be delayed and will most likely never see the light of day, as it is now required to return to the HoC [House of Commons] for further debate,” Sen. Don Plett, who leads Conservatives in the Upper Chamber, said in a social media statement.

Senators passed an amendment with a 40-39 vote on Dec. 5, weakening Bill C-234, a private member’s bill from Tory MP Ben Lobb. The amendment was tabled by Liberal-appointed Sen. Pierre Dalphond.

The legislation seeks to exempt farmers from paying the carbon tax on propane and natural gas used to heat or cool barns, or to dry grain. Farmers are mostly exempt from the carbon tax applying to other fuels or applications.

The amendment passed by the Senate has removed the exemption for propane and natural gas and only keeps the drying grain application.

Bill C-234 cleared the House of Commons in March, receiving support from all major opposition parties.

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The bill could have received royal assent with a vote in third reading, but objections from senators have prevented the legislation from becoming law. It is expected the bill will be sent back to the House of Commons where the Liberal government controls the legislative agenda.

Amendments to the bill could also give the NDP and the Bloc Québécois a chance to revisit their earlier support of it. Both parties are strong proponents of the carbon tax and the Bloc has recently opposed a Tory motion asking the Senate to vote on the bill pre-amendment.

Conservatives say that completely removing the carbon tax on farmers will help to lower food prices.

The Parliamentary Budget Officer said in a September analysis that Bill C-234 could save farmers $979 million through 2030.

The Bank of Canada Governor Tiff Macklem said in October inflation would drop 16 percent if the carbon tax was removed altogether.

The Conservatives have long made “axing” the tax a rallying cry and a central policy proposal, but they upped the pressure after Prime Minister Justin Trudeau declared a three-year carbon tax exemption on heating oil.

“We’ve heard clearly from Atlantic Canadians through our amazing Atlantic MPs that since the federal pollution price came into force ... certain features of that pollution price needed adjusting to work for everyone,” said Mr. Trudeau in announcing the measure on Oct. 26.

This has been interpreted by the Conservatives as a “carve-out” for the region to save the Liberals’ political fortunes as the Tories gain momentum in the polls, as well as an admission that the carbon tax indeed hurts Canadians’ finances.

The Liberal government has repeatedly maintained that most Canadians receive more from climate incentive payments than they shell out on the carbon tax.

Privilege ‘Breached’

Political wrangling over the carbon tax and Bill C-234 has been relentless.

Conservative Party Leader Pierre Poilievre said in mid-November he would launch a “full-on campaign” to pass the bill and that he would press “Liberal senators” to pass it. There are no Liberal senators per se, and the government has defended exercising pressure on them.

Environment Minister Steven Guilbeault confirmed on Nov. 14 he had been having a “conversation” with “half a dozen” senators over Bill C-234, but said his actions were not lobbying.

Meanwhile tempers have flared in the Senate with Conservative senators expressing displeasure about delays surrounding the bill.

Senate Speaker Raymonde Gagné ruled on Dec. 5 that the privilege of senators had been breached when Sen. Plett confronted some of his colleagues on Nov. 9. Debate on Bill C-234 had been cut short on that day with Conservative senators not being recognized.

Sen. Raymonde Saint-Germain claimed there were “attempts of intimidation” on that day.

“Senators, in the Senate Chamber, felt threatened and insulted and intimidated,” said Speaker Gagné in her decision. “That is a violation of the rights of Parliament, of the Senate, and of individual senators.”

A motion has been tabled to refer the matter to the Standing Committee on Ethics and Conflict of Interest for Senators.

Sen. Plett apologized two weeks after the event saying he had lost his “cool,” but disputed the matter constituted a breach of privilege.

The Canadian Press contributed to this report.