Senator Dalphond: Thank you very much. I will not take that as an invitation as there are 12 minutes left.

In evidence before the committee, the President of the Saskatchewan Association of Rural Municipalities said that he bought himself a new dryer. According to his experience, which he shared as I questioned him, and as the Ontario Ministry of Agriculture published numbers on this, there were savings of approximately 30% on the cost of natural gas. You use far less natural gas.

Don’t you see that what you are proposing now is that we should not have the tax because they want to keep the old equipment but we should remove the tax in order for them to buy new equipment?

Don’t you think it will be better to keep the tax and force them to buy new equipment — and save 30% on their cost of gas?

Senator Wells: Thank you, Senator Dalphond, for that final question.

I have run a number of businesses. I would take 30% savings on anything any day. If you go back to the example I used, it was clear, in fact, and it was recent — two days ago — they are not currently drying. They are sending it off-site, and that costs them. They will dry. They are going to install their dryer, and that will be a saving into the future. She said, “This is a 12-year payback and that is perfect for us. We can afford that and cover that.”

The money that will not be going to the government under the carbon tax program will help them pay for it. I do not see the downside of that in any way. I do not see it. It gives them certainty of scheduling of drying. Some weeks or some months they need to dry more, some they would need to dry less. But they would be able to make that decision based upon what is on their farm. Those are operational savings that they would have as well.

Senator Clement: Okay.

Senator Simons: To clarify again, for the record, if this bill is to pass, it will have no impact whatsoever on industrial dryers who will still have to pay the full carbon tax?

Senator Wells: To be clearer, off-site dryers will not have the benefit of an exemption from the carbon tax. I can’t say they won’t have a benefit, or it will be worse, because they will have a different volume.

In that respect, it may be different. But that is not what we’re talking about. I have been doing production costing since my early twenties. Their production costs will be different because their production balanced against their fixed costs and their variable costs will be different.

Senator Batters: And you are the sponsor.

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: 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 Martin: I agree about honouring our veterans and their service, which is why this is such an important project.

It is about the process, senator, and our Afghan veterans deserve better than this, as do the families of the fallen. Now there are delays.

A House of Commons committee has voted to further investigate the mismanagement of this monument over the objections of its Liberal members.

Leader, does the Trudeau government commit to providing all relevant, unredacted documents to the House committee?

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?