REMINDER: New federal fuel surcharge comes into effect in Ontario, Manitoba, Saskatchewan and New-Brunswick

On March 31, 2019, a new federal fuel surcharge came into effect in Ontario, Manitoba, Saskatchewan, and New-Brunswick (July 2019: Yukon and Nunavut). It is part of the federal carbon pollution pricing system and there are implications for CPA members.

The new surcharge will increase the price of fuel – including gasoline, light fuel oil (clear and coloured diesel), natural gas, propane and non-market natural gas. Companies selling in the above mentioned provinces will have to pay the new fuel surcharge, which has to be added to fuel used for air, marine, rail and road use.

Farmers will be eligible for an exemption for some types of fuel for tractors, trucks and machinery used on the farm. The exemption for farmers covers gasoline and light fuel oil, but does not cover propane, and involves completing an official Fuel Charge Exemption Certificate for Farmers (Form L402) form.

Fuel purchases that will be eligible for exemption must be delivered and stored on the farm. Fuel must be used exclusively on the farm in eligible farm machinery. That means anything used for farming including farm trucks, tractors, stationary or portable engines, etc. Cars or equipment used to heat or cool a building do not qualify for the exemption. Visit the Canada Revenue Agency website for a full listing of eligible machinery and vehicles.

The CPA believes the fuel tax exemption for farmers doesn’t go far enough. We are advocating for full exemption for propane.

We have met with the Environment Ministry on multiple occasions to discuss this file and will be meeting with Finance this week to indicate our extreme disappointment. We are asking that this mistake be fixed in the budget Bill that should pass in the next few weeks. Farmers' associations are also doing the same. Click here to read CPA's letter to Finance Minister Bill Morneau.

The new “carbon tax” stems from the Greenhouse Gas Pollution Pricing Act that the federal government passed in 2018 to establish a standard for reducing pollution in provinces and territories that did not have their own pollution pricing system.

For more information on companies' obligations under the new Act respecting the pricing of pollution caused by greenhouse gases, visit the Government of Canada website or contact your regional CPA Government Relations director: