How carbon pricing reaches the farm gate
Canada’s carbon pricing system affects fuel used on farms and, indirectly, the cost of fertilizer and other inputs. Some farm uses of fuel are exempt, while others are not.
Key takeaways
Certain on-farm fuel uses qualify for exemptions under the federal system or provincial equivalents.
Fertilizer costs can be affected by carbon pricing on natural gas used in production.
Rules and exemption processes differ by province and change over time.
Producers should confirm current exemption status with their fuel supplier or provincial authority.
What it means for the farm gate
Understanding which fuels are exempt and how to claim relief can reduce operating costs. Policy changes can also shift the relative cost of different inputs.
Quick answers
Are farm fuels exempt from carbon pricing? Some uses are exempt (for example, certain on-farm machinery fuel), but rules vary by province and by type of use. Confirm current exemptions.
Does carbon pricing affect fertilizer prices? Yes, indirectly. Natural gas is a major input in nitrogen fertilizer production, and carbon pricing on that gas can raise fertilizer costs.
Where can producers get current exemption information? Provincial agriculture departments, fuel suppliers, and the Canada Revenue Agency provide guidance on farm fuel exemptions.