The scheduled increase in the federal carbon tax has raised the hackles of politicians from almost every part of Canada. Conservative Party leader Pierre Poilievre’s call for freezing any raise on the carbon tax has been echoed by seven out of ten provincial premiers, Conservative and Liberal. For his part, Prime Minister Trudeau has said that he plans to go forward with the increase and that he would rather put in place good policy over popularity. 

Effective April 1, the federal carbon tax will increase for diesel, gasoline, and propane. Diesel prices will jump from $0.1769 to $0.2145 per litre, while gasoline will increase from $0.1437 to $0.1769 per litre. Propane, due to its lower carbon emissions compared to diesel and gasoline, will undergo a more modest rise, climbing from $0.1006 to $0.1238 per litre.  

Notably, throughout the scheduled carbon price hikes until 2030, the tax on propane will remain nearly 20 cents per litre lower than that on diesel and over 11 cents lower than gasoline. 

A reminder that the CPA has released the guide titled “How to Report Propane under the BC LCFS for Compliance Periods up to December 31, 2023” to assist members in complying with the provincial Low Carbon Fuel Standard (LCFS). This guide is designed for propane retailers engaged in distributing propane for transportation purposes in British Columbia and was developed with the support of Michael Rensing, the former executive director of the LCFS ministry at the B.C. Government.   

The document provides background information and instructions on compliance reporting for propane suppliers who have sold propane in B.C. for transportation purposes up to December 31, 2023. It is intended for those who do not wish to rely on the default carbon intensity or have not acquired their propane with an approved carbon intensity under an exclusion agreement.  

CPA members can also use the GHGenius report for B.C. propane (prepared for the CPA in January 2023), for their reporting purposes. For any questions, contact Katie Kachur, VP Government Relations, West. 

In February, the B.C. government announced the details of their budget for the 2024/25 fiscal year, opting for spending over restraint. Key elements of this budget include substantial investments in housing, family support, the development of a clean economy, and economic reconciliation with First Nations. Overall, spending is set to ascend to $89 billion, marking a 7.4% increase in year-over-year expenditures. This budget aligns with the recurring trends observed in government policies in recent years and was seemingly designed to resonate with a broad spectrum of voters during this election year.  

Key budget highlights relevant to CPA members include: 

• Introduction of a BC Electricity Affordability Credit of $100 per year and an increase in the Climate Action Tax 
• Allocation of $325 million annually ($1.3 billion over four years) towards fighting climate change and fostering “a cleaner economy.” 
  • Within this allocation, $405 million is dedicated to climate emergency preparedness and $435 million goes to the CleanBC climate plan, aiming for a 40% reduction in carbon emissions by 2030. 
  • Families can access a $40 million fund for heat pumps and other home retrofit initiatives. 
• Inclusion of the First Nations Equity Financing Framework, responding to the need for capital access for First Nations. The inaugural balance of this fund stands at $10 million, paving the way for the eventual establishment of a $1 billion loan guarantee fund. First Nations can ask the provincial government to provide loan guarantees for projects in numerous sectors. The First Nations Major Projects Coalition cites the program as a significant game-changer and an important step in economic reconciliation by allowing Nations to financially participate in projects like the Tu Deh-Kuh Geothermal Project.   

Alberta’s 2024 Budget is the first budget from the United Conservative Party’s second term following their re-election last spring. It projects a surplus of $367 million alongside expenditures totalling $73.2 billion, roughly in alignment with inflationary trends. Most ministries will need to make do with an inflationary adjustment to their budget at best, as the government directs its focus towards enhancing the fiscal sustainability of the province.  

With the growth in natural gas output, the budget anticipates annual growth in oil production ranging between 2% and 3%. This trajectory elevates the province’s total production to a historic high of over 4.2 million barrels per day by 2027. 

Key points of interest for CPA members include: 

• The one-time “Alberta is Calling” hiring bonus announced during the 2023 UCP campaign. This plan offers a $5,000 refundable tax credit to individuals in eligible professions who relocate to Alberta after the program’s commencement in April 2024. Eligibility prerequisites encompass filing 2024 taxes in Alberta and maintaining residency in the province for a minimum of 12 months. 
• Allocation of an additional $102 million in funding for apprenticeship programs: 
  • Introduction of the Local Growth and Sustainability Grant, a new application-based grant program that will allocate $60 million over three years for municipalities to invest in infrastructure that supports economic development and the needs of their communities. 
  • Implementation of a new tax for existing or prospective electric vehicle (EV) owners upon vehicle registration. Commencing January 2025, EV owners will be required to remit $200 annually to the province. This measure aims to offset the absence of fuel tax contributions from EV drivers, thereby ensuring the upkeep of provincial roads and sustaining essential public services. The tax rate aligns with the estimated annual fuel tax paid by drivers of typical internal combustion vehicles in Alberta, as outlined in the province’s fiscal plan. 

All new renewable projects have been on hold for the past seven months as the government and the Alberta Utilities Commission (AUC) engaged in consultations and laid the groundwork for a new regulatory framework to govern Alberta’s rapidly expanding renewable energy sector.  

Minister Neudorf recently introduced regulations aimed at safeguarding rural farmland and the province’s picturesque landscapes, while also establishing mechanisms to ensure that the cost of end-of-life reclamation does not burden taxpayers. Municipalities will now have the opportunity to participate in AUC hearings, potentially granting them the authority to veto future projects.  

With dozens of projects now set for consideration at the AUC, developers will need to revisit fundamental aspects such as proposed site locations. The government revealed plans for the electricity market redesign project at the beginning of March and a second round of recommendations from the AUC is expected later this spring.     

On June 6, the CPA will host a special event at the DoubleTree Hotel in Regina for all Saskatchewan-based CPA members, featuring speakers from various levels of government. The goal of this event is to raise the profile of propane and the roles it plays across the province. We must ensure that decision-makers are well-informed about the pivotal role of propane, particularly as the people of Saskatchewan head to the polls in October 2024. If you or any representative from your company is interested in joining this exciting event, please reach out to Katie Kachur, VP Government Relations West. 

The CPA recently participated in the Canadian Crops Convention held in Winnipeg, MB. Chris Crawford, Vice-President of Government Relations for the CPA in Ontario and Manitoba, attended the event, which offered a great opportunity to engage with a diverse range of speakers representing the crop industry and other key stakeholders. The convention also provided an opportunity to continue the CPA’s positive partnership with the agriculture sector. 

In recent months, the CPA has been working with Keystone Agricultural Producers (KAP), Manitoba’s primary farm organization, on several fronts. This collaboration has included advocating for the original form of Bill C-234 and petitioning for the inclusion of propane as a designated fuel in Bill 3 (The Fuel Tax Amendment Act). Given propane’s integral role in various agricultural applications, the CPA values KAP’s constructive engagement in these matters. The CPA looks forward to continuing working with KAP, addressing shared concerns and advancing mutual interests in the agricultural sector. 

On February 22, 2024, MPP Ted Hsu addressed CPA Board of Directors during their meeting in Toronto, Ontario. MPP Hsu, representing Kingston and the Islands and serving as the energy critic for the Ontario Liberal Party, spoke about the importance of propane in Ontario and his excitement about the upcoming release of the CPA’s Pathway to Decarbonization Report. He took the opportunity to engage with individual CPA Board Members, actively seeking their perspectives on various issues. The CPA looks forward to continuing collaboration with MPP Hsu and MPPs from all parties in the Ontario legislature.