Senator Batters: That tiny rural supplement is your government’s admission that rural Canadians are unfairly walloped by the carbon tax. While you give Atlantic Canadians a break on oil heating, this does nothing for those of us in the often bitterly cold West where we must heat with natural gas. In fact, you and your Trudeau government have stalled and gutted a bill to exempt egg operations from carbon tax as you again penalize Prairie farmers. Why does this government continue to punish Western Canadians, farmers and rural Canadians? Don’t they elect enough Liberals?

Hon. Paula Simons: Honourable senators, I rise today to speak to you as the Deputy Chair of the Standing Senate Committee on Agriculture and Forestry, as a senator from Alberta and as someone who is deeply concerned about the impacts of climate change on the province and the country I love. The last three years have driven home to us as never before that climate change isn’t some hypothetical, existential crisis of the future; it is happening right now, in real time. Farmers, more than any other Canadians, are seeing the impact of the climate shift every day before their very eyes.

So when Bill C-234 first came before us, I was torn. It was obvious that farmers, under all sorts of economic and trade pressures, were being affected by carbon prices in a way few other small businesspeople were. It was small wonder they were seeking carbon tax relief to help them with grain drying and barn heating and cooling, especially when the government had already given an exemption for gasoline and diesel fuel used on farms. Why exempt diesel, for example, but not propane, a much cleaner fuel? You can see the logic in the argument behind Bill C-234.

But I am also a believer in carbon taxes. They are a transparent, straightforward way of incentivizing people to reduce fossil-fuel use. They are fairer than subsidies and rebates. They don’t pick winners and losers. They send a clear price signal — a signal we all feel in our pocket books. They change consumer behaviour in a way no righteous lecture, PR campaign or Senate speech ever could.

So I came to our committee hearings on Bill C-234 with an open mind. I had not yet decided whether I would support the bill or any amendments to the bill. I just listened to the expert witnesses. As deputy chair, I worked diligently to ensure that we had a balanced list of witnesses, not just farm lobby groups and environmentalists but also independent academic and engineering experts. I was grateful for the work that all the senators on the committee did to find those witnesses. Names were put forward by Senator Black, Senator Klyne, Senator Dalphond, Senator Woo and Senator Wells, as well as by me.

I listened, just as I always tried to do in my work as a journalist, without favour or prejudice. I asked tough questions, without bias, trying my best to understand the pros and cons.

I came to a conclusion: An exemption for grain drying makes sense. If newly harvested wheat or corn isn’t dried before storage, it runs the risk of rot and mould. We need to dry grain quickly and thoroughly. On Prairie farms, in particular, grain is harvested in huge volumes. Grain dryers are a necessity — not every harvest, but during wet years the ability to dry grain efficiently and completely is essential.

While grain-dryer technology is improving, there are no viable market-ready options other than heaters fuelled by natural gas and propane: there aren’t any now, and there probably will not be in three or five years from now.

I was also mindful of the words of one of our academic expert witnesses Dr. Nicholas Rivers, Associate Professor of Public and International Affairs at the University of Ottawa. He noted that the United States has not imposed such a carbon tax on its grain growers:

The Canadian carbon pricing policy offers rebates to large industrial emitters of traded goods, like cement or steel manufacturers, in order to counteract this competitiveness concern. Rebates to large emitters are based on output, like the amount of steel produced, while the carbon price is levied on emissions. This policy design ensures that large industrial emitters continue to face an incentive to reduce emissions, but are not placed at a disadvantage when competing internationally.

He continued:

However, many farms are not covered by industrial carbon pricing rebates. There are some exemptions to the carbon price for fuels used on farms, but these exemptions currently do not apply to fuel used for grain drying or for heating buildings. This means that grain farmers face the full carbon price on fuel used for grain drying, and do not receive output-based rebates. However, like cement and steel, grains are an internationally traded commodity, and there are legitimate concerns that the carbon price puts Canadian grain farmers at a disadvantage relative to their international peers.

Given that Dr. Rivers is a supporter of carbon taxes, I thought that argument was particularly objective and informative.

So, despite my concerns — indeed, my fears — about the climate crisis, and despite my opinion that carbon taxes are sound public policy, I began to see that an exemption for grain drying made sense.

However, it was far less clear to me that an exemption for heating and cooling barns, outbuildings and other structures was equally necessary. There are all kinds of ways to heat and cool buildings, and there are all kinds of ways to make barns and other farm buildings more energy efficient; there are practical market‑ready options that farmers could deploy to reduce their costs. An exemption for grain drying was justifiable. Was an exemption for barns? To me, that case was much less clear.

So when it came time for us to make amendments, I thought long and hard. I knew that accepting Senator Dalphond’s amendment, which narrowed the scope of the bill to deal with grain drying, specifically, would slow the passage of the bill — perhaps dramatically, and perhaps fatally.

But it is not the job of the Senate to accept and pass private members’ bills without study and possible revision. If anything, private members’ bills require more thought and study, because they don’t always receive such scrutiny in the other place where partisan politics can play more of a factor than they sometimes do here. Just because a private member’s bill wins enough votes to pass in the other place doesn’t mean we should rubberstamp it here. We should hold it up to at least as much study and scrutiny as any government bill.

On the other hand, if I’m being blunt, I also worried that, if Bill C-234 weren’t amended and narrowed in scope, it might not pass in this chamber at all. I know there are many senators here who are passionately and philosophically opposed to any carbon tax exemptions. Theirs is a principled position, and one that I might have shared had I not heard all the expert evidence about the conundrum of grain drying. I was worried that, without the amendment, the bill might fail altogether.

So when it came time to vote on the amendment, I made a difficult choice and voted pragmatically in an effort to save the bill by amending it. After that, I voted against amendments that would have shortened the timing for the bill’s eight-year sunset clause and that would have made it harder to renew the exemption when those eight years were up.

Because of the even split of the committee, and because my name comes near the end of the alphabet, I ended up being the swing voter each time.

Of course, the operational definition of a compromise is that it leaves people on both sides unhappy. I heard from many who were upset with my decision, either because they felt I had betrayed farmers and perhaps fatally wounded the bill or because they felt I had betrayed my principles and the planet by voting in any way for a bill that rolled back taxes and could be a Trojan horse — a wedge in the door to end carbon taxes for good.

But, in the moment, I felt I had made the right decision. I was prepared to defend it, meeting with several of the key farm lobby groups last week to explain my thinking and to hear their concerns. I was fully prepared to stand by my decision until the news on Thursday, broken here in this chamber by Senator Housakos, of a special new carbon tax exemption announced by the government: one that gives rural and small-town residents a three-year exemption on the carbon tax for heating oil.

This tax exemption has been described as a national program to benefit all Canadian households. That is a bit of sophistry. First of all, the exemption only applies in jurisdictions that are part of the federal backstop.

According to Statistics Canada figures, in 2021, 40% of homes in Prince Edward Island relied on heating oil as their primary heating fuel. In Nova Scotia, it was 33%, and in Newfoundland and Labrador, it was about 17%. In New Brunswick, it’s closer to 8%. Fewer than 10% of homes in Ontario rely on oil as their primary heat source. In the Prairies? Well, in Alberta and Saskatchewan, the number is effectively zero, according to Statistics Canada.

I don’t mean to sound divisive and as if I’m pitting Canadians from some provinces against others. It’s the exemption that’s doing that by picking regional winners and losers and stirring up bad feelings across Confederation.

Now, how am I, as an Alberta senator, supposed to look Alberta farmers in the face and tell them that I took a principled stand against carbon tax exemptions when the government has pulled out the rug right out from under me?

In the government backgrounder on this new policy which comes under the headline, “Lowering energy bills for Canadians across the country,” we are told that the heating oil exemption will apply not just to heating homes but to the heating of buildings and similar structures, so long as they are not involved in industrial heating or, incidentally, grain drying.

It’s also unclear whether this applies to small businesses. The initial press release mentions small businesses. I have been trying for days now to get an answer to that question without any success. But does this mean that farmers in Prince Edward Island and Nova Scotia could use exempted fuel to heat their barns and outbuildings regardless of possible fire risk? It’s completely unclear.

I want to say again that I support carbon taxes. They are a simple, straightforward and transparent way to change human behaviour — a market solution for a market problem. I am not a climate change denier. I am not a carbon tax opponent. What I am is a very frustrated Albertan and a very frustrated deputy chair. How can we support having bespoke tax breaks for one region and not another? How can we adopt a system of carve-outs that pits one region against another? How can we maintain public confidence in the fairness of our carbon tax regime if we pick and choose exemptions willy-nilly?

I’m not going to stand here and tell you how to vote on this report. I’m not even sure how I’m going to vote. I just know that I’m feeling pretty foolish right now, pretty betrayed and I wish I didn’t. Thank you. Hiy hiy.