Federal Carbon Tax
The federal government through its Greenhouse Gas Pollution Pricing Act charges a carbon tax on all fuel consumed in the Province of Ontario. Specifically, the Federal Carbon Tax is charged on all propane, gasoline, diesel and kerosene products sold by Dowler-Karn Limited.
The rates are set annually on April 1st. The current status is as follows:
3.10 cents per litre, rising to 4.64 in 2020
4.42 cents per litre, rising to 6.63 in 2020
5.37 cents per litre, rising to 8.05 in 2020
5.16 cents per litre, rising to 7.75 in 2020
These amounts will be indicated on your invoice as a separate line item to indicate a tax, and are not included in the price you pay for your products. It is the legal responsibility of Dowler-Karn to both charge & remit the tax to the federal government.
What Is Exempt from The Federal Carbon Tax?
Relief for Farmers
Under certain defined conditions, exemptions are available through the use of an exemption certificate. They are limited to:
- The operation of farm machinery for the purpose of farming (tractors, combines, etc.).
- Farm machinery also includes small & portable engines used in farming activities (chain saws, generators, etc.)
“Specifically, the GGPPA provides that a registered distributor can generally deliver, without the fuel charge applying, gasoline or light fuel oil (e.g., diesel) to a farmer at a farm, if the fuel is for use exclusively in the operation of eligible farming machinery and all or substantially all of the fuel is for use in the course of eligible farming activities.”*
Commercial greenhouse operations
for the exclusive purpose of heating a greenhouse or generating carbon dioxide (CO2). These greenhouse purposes are 80% exempt. “Partial relief of the fuel charge (i.e., 80 per cent) is proposed to apply to propane that is exclusively for use in the operation of a commercial greenhouse for growing any plants, including vegetables, fruits, bedding plants, cut flowers, ornamental plants, tree seedlings and medicinal plants. It is also proposed that, in order for relief to be available, all or substantially all of the greenhouse building must be used for the growing of plants.”*
“The relief is proposed to be provided upfront through the use of exemption certificates, similar to other exemption certificates under the GGPPA, such that only 20 per cent of the fuel charge applies to propane that is delivered by a registered distributor to an eligible greenhouse operator if the fuel is exclusively for use in the heating of, or for the production of carbon dioxide for use in the operation of, a commercial greenhouse.”*
An eligible greenhouse operator is proposed to be a person that carries on a greenhouse operation with a reasonable expectation of profit.
What is Not Exempt from The Federal Carbon Tax?
It is our understanding that any kind of heating application not specified above is not exempt, as follows:
Barn heating for any purpose
Fuel that is used in licensed vehicles.
What Do I Need to Become Exempt from The Federal Carbon Tax?
- Eligible farmers must complete form L402, which can be provided by us at Dowler-Karn or at the following link:
- Eligible greenhouse operators must complete form L404, which can be provided by us at Dowler-Karn or at the following link:
Please note that we cannot provide fuel exempt from the Federal Carbon Tax unless we have a completed copy of the required form on file.
As noted on each exemption form, the original certificate is to be provided to your supplier. Keep a copy of the certificate with your records and do not send the certificate to the Canada Revenue Agency.
Please make sure you have your completed forms returned to us in a timely manner as we can not retroactively make adjustments!
We also encourage you to continue to monitor our webpage for further information should we receive additional information or clarity from our industry and government contacts. We will update with any new information should it become available. We also encourage our customers to review the regulation and to understand the expectations and penalties for making a false declaration. If you have questions, please let our customer account representatives assist.
Please also note:
The Government of Canada has introduced the new climate action incentive payment. If you are a resident of Ontario, you can claim it when you file your income tax and benefit return. We share this for your information only as it has no connection to our service to you. You can find out more at Canada.ca/climate-action-incentive.