Senator Wells:  — the sponsor of the bill.

Senator Dalphond: The price now is $1.21 per cubic metre. It was $1.39 a year ago, including the tax on carbon.

My next question is about the need to maintain competitiveness. I certainly agree with the principle that we should have an agricultural sector which is competitive.

Senator Wells, maybe you missed it, but some witnesses before the committee mentioned, and the evidence has shown, that for 60% and more of the grain growers in Ontario, Bill C-234 will not apply. Why? Because they use third-party warehouses and dryers. These people will not benefit from your bill. So 60% or even 65% of grain producers in Ontario will not benefit from it.

You say we have to maintain competitiveness. The bill does not seem to achieve that.

One of the representatives — I do not know if you are aware of it, but I asked him questions in committee. The question to you is the following: What is the difference of the competitiveness between the producers who will have access to the rebate and those, the 60% and even more, who will not have access to it?

Senator Wells: Thank you, Senator Dalphond.

That’s a great question. First I will go to the question of the 60% or more who don’t use or have on-farm drying.

You will have possibly heard my answer to Senator Batters’ question that led me to talk about the farmer I spoke with Tuesday night who currently does off-site drying in North Gower, and they are an hour north of here. North Gower is a little bit south of here. This is an opportunity for them to do on-site drying and gain the benefit. I would imagine that 60% or more, whatever the number is — I do not even know if it is that, but if you say it is, I will take it at face value — will give the opportunity for that grain drying to be done on-site and, therefore, benefit from Bill C-234.

Frankly, I have to say that I cannot remember your second question.

Senator Miville-Dechêne: Like you, I tried to do my homework on this bill, because I hate to see inequities between the regions.

The past few days have been difficult. I became particularly interested in the refundable tax credit that the government implemented in 2021 after noticing how unfair the situation was.

Does this refundable tax credit offset a certain amount of the carbon tax? If we do the math, we see that, in Alberta, the average amount a farm spends on heating and on the carbon tax is 0.5% of all its expenditures. As for the carbon tax, the refundable tax credit offsets 0.17% of those costs. That means that, on average, farmers get a cheque that offsets about a third of their heating and carbon tax expenses.

Given that the carbon tax costs a lot less than heating costs, farmers are receiving a rather substantial amount of compensation. It is true that we are talking about an average and that the cheque is an average amount for everyone.

However, in a way, doesn’t this reward those who use less energy, while penalizing those who use more natural gas and diesel?

That is my somewhat complicated question.

[English]

Senator Wells: Now I regret saying yes to answering your question.

I will take the percentages you gave at face value. With the refundable tax credit, or the rebate, it is not targeted specifically even at farms that use propane and natural gas. It is targeted at all farms for all eligible expenses, which, again, those eligible expenses don’t have to include propane or natural gas.

The other thing I learned is that refundable tax credit is altogether about 7% to 10%. It’s a very low percentage of what the full expenses would be on natural gas and propane.

I don’t know if this fully answers your question, but while it is applied over a broader number of farms, it is not targeted at those specifically who use the fuels we are talking about, natural gas and propane.

[Translation]

Senator Batters: With respect to the natural gas that’s used to heat the barns and that type of thing, Senator Wells, can you give us some indication as to the costs for that? I understand that you’ve recently received some correspondence from a chicken farmer in Alberta who talked about the massive costs. I think they relayed that, last year, the heating cost for their barn was $120,000, and that it was $180,000 this year. When the carbon tax reaches $170 per tonne, it will be $480,000 annually.

Are those the types of costs that we are trying to help farmers with so that food can eventually cost less for us?

Senator Wells: Thank you for your question. Now, I will also tell you I don’t know a lot about chicken farming, but I did visit a poultry farm in southern Alberta. I asked for a tour. They wouldn’t give me a tour because of biosecurity and that sort of thing, which I understand. But I spent a lot of time asking about their operation. I hope to get to your question.

The time it takes from the hatching of an egg to the selling of a chicken is eight weeks. This is a constant. They have eight barns on two sites. I think they actually use propane because their community is not furnished with natural gas. They have limited choices already, so they use propane. They gave me their numbers based on the price of carbon, and at $170 per tonne, it will be close to half a million dollars per year. That was a modest-sized operation. It wasn’t big.

I do know that the price of natural gas is decreasing. Senator Dalphond pointed that out at committee, and he is correct. But that’s not a constant. We don’t know what the price of natural gas will be next year. Or propane. We live in a volatile, geopolitical world, and hope is not a plan when you are trying to make money from a business.

Other than that, it is costly. I know this particular farmer was doing all they could — again, it was a family farm. They had the best insulation, and heat shields on the sunny side of the barn to deflect the heat so it wouldn’t have a greater effect on their barn. They used ventilation. Of course, in the prairie winter, they have to heat the place.

Again, I think I mentioned this in an earlier speech, but there is a very narrow range in which they have to keep these chickens. Three or four degrees above, and they last minutes. Anything below, and he said they last a little bit longer, but they will still die. That’s what I know about the price and the cost that it takes these farmers with respect to the fuel they need for heating and cooling the barns.

[Translation]

Senator Batters: Thank you. I appreciate that.

Senator Wells, thank you very much for your detailed speech on Bill C-234, which is so crucial to farmers not only in my home province of Saskatchewan but across the country.

You mentioned in your speech that grain dryers are a significant capital expense, and just having a tiny bit of experience with this — being that many years ago and for about 30-some years my dad sold farm equipment, including grain dryers, I know how significant this expense is. I wanted to give some of our colleagues a chance to know about that as well.

Isn’t it true that a new grain dryer, which is the most efficient type that can be purchased right now, is probably an expense costing between $100,000 to $150,000 each for a farm? I’m not talking about a commercial grain dryer, just a regular farm one. It may even be more now as the costs have gone up considerably.

Senator Wells: Senator Batters, thank you for your question. I will be frank — I don’t know the price of a grain dryer. But I do know that after debate finished on Tuesday, I went to the Canola Growers Association reception and I spoke with a family farmer who has a canola farm about an hour north of Ottawa. She told me that if Bill C-234 passes — and it is not a big farm — they will be able to buy a grain dryer instead of having to send grain to North Gower, just south of Ottawa, and their payback period would be 12 years with the savings that they would realize from not having to pay the carbon tax.

I don’t know the price of a dryer, but I do know that for this small canola farmer, who wishes to dry their own grain on their own farm because they have more control — and, of course, there would be fewer transport costs sending it out — that a 12‑year payback is reasonable on a piece of industrial equipment. Further, with that additional money in their pockets, going to the bank and seeking credit would be a lot easier than if it were otherwise.

Senator Plett: Your Honour, you have not yet ruled on the point of order.

The Hon. the Speaker: Honourable senators, as is allowed by our practice, Senator Boyer will speak in Michif during our proceedings today. Senators may listen to the simultaneous interpretation on the English or French channel.

Senator Quinn: Thank you, Senator Wells, for your speech and the debate and questions back and forth.

Regarding your example of the farm south of North Gower that ships up to North Gower to have grain dried, the place that dries the grain, will it benefit from Bill C-234? If so, would it be safe to assume that the person sending the grain to that facility would have less likelihood of increased costs going to the right to use that facility?

Senator Wells: Thank you, Senator Quinn. That is a good question. The farmer who would send the grain to North Gower for off-site drying told me they proposed to dry the grain on their own farm with a new dryer. She showed me a picture on her phone of what this dryer looked like. I was highly engaged because I do not know anything about this, and I am happy to learn what a grain dryer looks like. They would do it on their own site. They would have immediate savings in their costs because if they send it to North Gower, they are also paying the additional cost of transport.

They are probably absorbing some of the higher costs that the off-site dryer would have because they would be subject to a carbon tax.

The first part of your question was, “Would the off-site grain dryer in North Gower benefit?” Probably not because they will get less product, because that will be staying on the farm for a more efficient, less costly drying that would not, obviously, include the carbon tax.

Senator Batters: Right.

Senator Wells: Certainly, one of the things that I did learn is when a farmer goes to a bank or goes to a lender, their case is a whole lot better when they don’t have this additional burden and they can apply that benefit that is retained in their earnings to their application for funds. Normally it is a long-term lease. Certainly, it would be more beneficial along those lines.

Senator Wells: Thank you. From where I stand, I can see you and I can see Senator Clement. I know that I was standing, and I also saw that you struggled to remember my name. I understand that; that’s not an issue personally with me at all. It was then that you deferred to Senator Clement. But I know clearly, Your Honour — and I guess you can choose whom you wish to recognize, but I know that I was standing up on debate with respect to Senator Moncion’s —

Senator Clement: I do not.

Senator Dalphond: I spoke with farmers, and I can give you the information. I have the bills. The tax on carbon this year is two cents per cubic metre. That is the increase. Last year it was two cents. The year before it was two cents per cubic metre. Maybe, Senator Wells, you can tell us the price of natural gas in Ontario?

Senator Wells: Thank you, Senator Dalphond, for your question. I do not know the price of natural gas in Ontario. I only know the amount of actual dollars that farmers have to pay — large, medium and small — is considerable and derives no benefit to their farm and probably no benefit to the environment.

Senator Dalphond: Thank you, senator. Thank you for your speech. There is a lot that has been said, and I am glad that you agreed with some of the things I said speaking of Budget 2023.

Do you know how much it costs for somebody who is raising chickens or turkeys in Ontario using natural gas? How much does the carbon tax cost this year per cubic metre on the price of gas?

Senator Wells: I do not know that exact amount, no.

Senator Dalphond: Would you accept another question?

Senator Wells: Yes.

Senator Dalphond: Will you accept another question?

Senator Moncion: I believe that it is similar.

Senator Dalphond: I do not know if Senator Wells will take another question from me.

Senator Wells: Senator Dalphond, it is my policy to take questions until my time is up.

Senator Simons: This is the editor and fact checker in me. Senator Quinn asked you a question about whether this would lower costs for off-site grain drying.

To clarify for everyone, is it not true that this bill does not apply to off-site commercial grain dryers but only, in fact, applies to farmers using grain dryers on their own farms?

Senator Wells: Thank you, Senator Simons. You are right. This only applies to on-site grain drying. But having been in business and having done quite a bit of production costing in my life, I would make the assumption that it would be more expensive per unit for the off-site grain dryer, regardless of the tax, only because they would have less volume. They would still have their drying costs but less volume. Perhaps I should not assume, but normally the higher the volume you have, to a certain point, the less costly your per-unit costs are.

Senator Batters: Isn’t it true that brand-new grain dryers that are the most efficient do have a saving on the energy costs; however, the substantial cost is that a brand-new very efficient grain dryer could be $150,000 or more? Isn’t that correct?

Senator Wells: Thank you, Senator Batters.

A grain dryer is a huge cost. If you have a larger farm, you are going to require more drying capacity. That would either be multiple dryers or a dryer that has that higher capacity. I can only imagine that will be a higher capital cost. Certainly, if it is on‑farm, then at least you have some of the benefit of not having to pay the tax on the drying operation.