Policy TRACKER: Carbon tax rebate, MELT licencing and more
By Shannon Sereda, Senior Manager of Government Relations and Policy | Alberta Wheat and Barley Commissions
Carbon Tax Rebate
On December 14, 2021 the Government of Canada provided their fiscal update in which they released details related to their earlier promise to provide a rebate on carbon taxes paid by farmers in the provinces that are under the federal government carbon pricing backstop, which includes Alberta, Saskatchewan, Manitoba and Ontario. Farming operations in these provinces that incur total farming expenses of $25,000 or more, are eligible for a carbon tax rebate which will be determined through a tax credit. Here are the highlights from The Fiscal Update 2021-Tax Measures:
• Recognizing that many farmers use natural gas and propane in their operations, and consistent with the federal budget 2021 commitment, the government proposes to return fuel charge proceeds directly to farming businesses in backstop jurisdictions via a refundable tax credit, starting for the 2021-22 fuel charge year.
• For the purposes of calculating this tax credit, eligible farming expenses are amounts deducted in computing income from farming for tax purposes, excluding any deductions arising from mandatory and optional inventory adjustments and transactions with non-arm’s length parties.
• The credit amount in respect of an eligible farm business for an applicable fuel charge year would eligible for every $1000 in farming expenses incurred (from above) multiplied by a payment rate that has been specified for the fuel charge year as follows: $1.47 for 2021, and $1.73 for 2022.
• Consistent with the general treatment of business tax credits, businesses can claim these refundable tax credits through their tax returns that include the 2021 and 2022 calendar years.
The Alberta Wheat and Barley Commissions are undertaking an evaluation to better understand the impacts of the rebate on a typical grain farm related to the direct costs paid by farmers in carbon tax. Through our national organization Grain Growers of Canada, we support the continued work to re-introduce legislation seeking an exemption of all farm fuels from the carbon tax. Stay tuned for the outcome of our ongoing analysis.
Changes to Experience and Equivalency Class 1 MELT Program Eligibility Criteria
On December 16, 2021, Alberta Transportation announced that the student eligibility criteria for the Experience and Equivalency Class 1 MELT Program have expanded to drivers holding an Alberta Class 1 or Class 2 driver’s licence. This change, requested by industry, increases the number of drivers that take the abbreviated, less expensive Class 1 MELT (fees capped at $4,000) to help them obtain a Class 1 driver’s licence. This is an expansion from the initial program which was limited to existing Class 3 drivers. More information on the program can be found here: Experience and Equivalency Class 1 Program.
The Alberta Wheat and Barley Commissions together with Team Alberta, continue to meet on a regular basis with Alberta Transportation to address transportation issues larger related to: barriers to Class 1 licencing and Mandatory Entry Level Training (MELT), driver shortages and other ongoing issues. In July of this year, Minister Rajan Sawhney took over the transportation portfolio.
Next Agricultural Policy Framework – the Guelph Statement
The Federal Provincial Territorial meetings in November 2021 wrapped up with the release of the Guelph Statement which provides the vision for the next agricultural policy framework out to 2028 and will replace the current Canadian Agricultural Partnership in March of 2023. The priorities are outlined below:
• tackling climate change and environmental protection
• targeted investment in science, research and innovation
• supporting growth for the domestic and global marketplace
• value-added food processing,
• enhancing ability to respond and mitigate risk including business risk management (BRM) programs
The Guelph Statement seems to indicate a balance in approaching competitiveness and productivity together with climate action, but famers need to better understand how risk management programs and strategic initiative funding will be integrated with economic growth goals and reconciled against past practices, continuous improvement and costs associated with providing ecological goods and services for the public good. Alberta Agriculture, Forestry and Rural Economic Development (AFRED) have indicated that they will be undertaking consultations to advance program details for strategic priorities (set by the province) and changes to BRM programs. The commissions will work closely between government and our farmers to provide meaningful input into this process.