Question Period Note: CLIMATE CHANGE MITIGATION

Q1 – How is the Government ensuring that the federal carbon pollution pricing system does not create an unreasonable burden on Canadian farmers? Q2 – What actions has the Government taken to reduce methane emissions from the agriculture sector? Q3 – What is the Government doing in response to nitrous oxide emissions from synthetic fertilizer application? Q4 – How will the Sustainable Agriculture Strategy help mitigate climate change?

R.1 - We understand the unique challenges faced by the agriculture sector and have designed the carbon pricing system to reflect these challenges.
Approximately 95% of GHG emissions from the agriculture sector are not subject to federal carbon pollution pricing, including any emissions from crop and livestock production. We also provide exemptions for gasoline and diesel used in eligible farming activities, and commercial greenhouse operators are eligible for 80% relief from the fuel charge on natural gas and propane.
A portion of the proceeds from the price on pollution is being returned directly to farmers in backstop jurisdictions through a refundable tax credit. It is estimated that farmers would receive $100 million in the first year. R.2 - In October 2021, we confirmed our support for the Global Methane Pledge, which aims to reduce global methane emissions from all sources by 30 percent below 2020 levels by 2030. In support of the Global Methane Pledge, Environment and Climate Change Canada published Canada’s Methane Strategy in September 2022, which outlines existing and upcoming measures targeting methane emissions reductions from the three key emitting sectors, including the agriculture sector. We intend to continue working with the sector to determine the best path forward for reducing emissions.
Launched in November 2023, the Agricultural Methane Reduction Challenge will provide up to $12 million to advance innovative, low-cost, and scalable practices, processes, and technologies that reduce enteric methane emissions produced by cattle.
In December 2023, Environment and Climate Change Canada published a draft Reducing Enteric Methane Emissions from Beef Cattle federal offset protocol for a 60-day public comment period to seek public input that could inform the preparation of the final protocol. An offset protocol for the Avoidance of Manure Methane Emissions through Anaerobic Digestion and Other Treatments is also currently in development.
AAFC will continue to work with key stakeholders and partners, including through the development of the Sustainable Agriculture Strategy, to better understand barriers and opportunities for reducing methane emissions in the agriculture sector. R.3 - We have set a national target to reduce emissions from fertilizers by 30 percent below 2020 levels by 2030. The fertilizer target is focused solely on reducing emissions and does not represent a mandatory reduction in the amount of fertilizer used on the farm. The goal is to reduce emissions while maintaining or enhancing yields and profitability.
Through the Sustainable Agriculture Strategy Advisory Committee, a Fertilizer Emissions Reduction Working Group was created to provide expert advice and guidance on the development of an approach to reach the target. Members representing industry, non-governmental organizations, academia, and other stakeholders have been meeting regularly since May 2023 throughout the Working Group’s initial one-year term. To date, discussions have focused on economic policy tools, innovation, research and development, beneficial management practice adoption and implementation, data and measurement, and extension and communication.
We look forward to working with provinces and territories, industry partners, and Canadian farmers who are already taking action to reduce greenhouse gas emissions, sequester carbon and continuously improve their operations to ensure they remain sustainable, productive, and competitive. R.4 - The Government of Canada is developing a Sustainable Agriculture Strategy to support the agriculture sector’s actions on climate change and other environmental priorities towards 2030 and 2050.
Climate mitigation is one of five priority areas of the Strategy.
The Strategy will build on past and current successes, recognizing action already taken by producers to meet environmental objectives while growing production and supporting Canada’s role as a global food provider.
As part of Strategy development, we have been working with the sector to identify pathways to lowering GHG emissions that also result in economic and social benefits.

The sector has demonstrated a commitment to sustainable practices that help protect Canada’s soil, air, water, biodiversity and climate change. However, the sector accounts for 10% of Canada’s total greenhouse gas (GHG) emissions, mainly through crop production, animal production, and on-farm fuel use. Agricultural lands can also act as “carbon sinks” by storing (or sequestering) carbon in the soil, reducing the amount of carbon in the atmosphere.

The current Sustainable Canadian Agricultural Partnership began in April 2023. The five-year agreement includes a target of 3-5 MT greenhouse gas emissions reductions and an agreement in principle for a $250 million Resilient Agricultural Landscape Program to support ecological goods and services provided by the agriculture sector.

Since 2021, the Government has invested over $1.5 billion into supporting farmers with new technologies and farming practices to reduce GHG emissions and improve farm performance. This includes the Agricultural Climate Solutions – Living Labs Program, Agricultural Climate Solutions – On-Farm Climate Action Fund, and the Agricultural Clean Technology Program.

The Government has also set a national emissions reduction target of 30% below 2020 levels from synthetic fertilizers and is working with fertilizer manufacturers, farmers, provinces and territories to develop an approach to meet it.

The Agricultural Methane Reduction Challenge is the first challenge of its kind. It was designed to advance innovative, low-cost and scalable practices and technologies that contribute to the reduction of methane emissions from cattle. It will use a phased approach to move innovators through the process of developing and deploying their solutions. At each stage of the Challenge, an external group of subject matter experts will recommend which applicants move to the following stage and receive funding. At the last stage, two winners will be awarded a grand prize of up to $1 million each.

Sustainable Agriculture Strategy
The Government of Canada is developing a Sustainable Agriculture Strategy (SAS) as a means to support the agriculture sector’s actions on climate change and other environmental priorities towards 2030 and 2050. The SAS is a coordinated federal plan to establish a long-term vision and strategic approach to agri-environmental issues, including climate adaptation and resilience, climate change mitigation, water, biodiversity, and soil health. The SAS will build on past and current successes, recognizing action already taken by producers to meet environmental objectives while growing production and supporting Canada’s role as a global food provider.

Carbon Pollution Pricing
Establishing a national price on carbon pollution is a key federal commitment under the Pan-Canadian Framework on Clean Growth and Climate Change. The Federal Government has implemented a carbon pollution pricing legislation (backstop) effective January 1, 2019, in provinces and territories that choose to adopt it or that do not have a carbon pollution pricing system that meets the federal benchmark stringency requirements and carbon price benchmark rising to $170/tonne in 2030.

Private Member’s Bill C-234 would amend the Greenhouse Gas Pollution Pricing Act to expand fuel charge relief for farmers with respect to the use of propane and natural gas. The Bill passed the vote in the House of Commons on March 29, 2023, and was adopted in the Senate with amendments on December 12, 2023. At this point, the bill has been sent back to the House of Commons for consideration of the amendments made by the Senate.

There are two distinct payments to help farmers offset the cost of federal pollution pricing; the Return of Fuel Charge Proceeds to Farmers Tax Credit for eligible farm businesses, and the Canada Carbon Rebate (CCR) for eligible residents, including farm families. (Farm families are families with one or more farm owners or operators). The Return of Fuel Charge Proceeds to Farmers Tax Credit returns a portion of the fuel charge proceeds directly to farm operations in provinces where the fuel charge applies, which currently includes Ontario, Manitoba, Saskatchewan, Alberta, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Yukon and Nunavut. The credit amount available to farmers will be equal to the eligible farming expenses in the calendar year when the fuel charge year starts, multiplied by a payment rate.
The CCR is available to all residents, including farm families, residing in provinces where the fuel charge applies, and consists of a basic amount (depending on province of residence) and a supplement for residents of small and rural communities. The CCR is provided in quarterly tax-free payments starting in July 2022. On October 26, the Prime Minister announced that the CCR supplement for residents of small and rural communities was increased from 10 to 20 percent of the baseline amount beginning in April 2024. The Prime Minister also announced that the government is moving ahead with a temporary, three-year pause to the federal price on pollution on deliveries of heating oil in all jurisdictions where the federal fuel charge is in effect, while the federal government works with provinces to roll out heat pumps and phase out oil for heating over the longer term.

Canada’s Greenhouse Gas Offset Credit System
Canada’s Greenhouse Gas (GHG) Offset Credit System is designed to encourage cost-effective domestic GHG emissions reductions and removals from activities that go beyond business-as-usual, are not required by regulation, and are not already incentivized by carbon pollution pricing, with a focus on activities in the forestry, agriculture and waste sectors.

The specific agriculture practices that can generate offset credits will be determined during the protocol development process. Protocols for Enhanced Soil Organic Carbon, Reducing Enteric Methane Emissions from Beef Cattle, and the Avoidance of Manure Methane Emissions through Anaerobic Digestion and Other Treatments are currently being developed for the agriculture sector. Technical expert teams have been established, which include scientists from Agriculture and Agri-Food Canada, to provide advice on the latest science. Members of the public will have an opportunity to comment on draft protocols as a part of the protocol development process.

In December 2023, a draft Reducing Enteric Methane Emissions from Beef Cattle federal offset protocol was published for a 60-day public comment period. The protocol is intended for use by a proponent undertaking a project to reduce enteric methane emissions in confined beef cattle feeding operations through improved management, diet reformulation, the use of feed additives, growth promoters, or other innovative strategies. The finalized protocol is expected to be published summer 2024.

• Producers have long been responsible stewards of the land and are already adopting sustainable practices. However, we recognize that additional support is needed to reach Canada’s climate objectives and to avert the worst impacts of climate change.
• Since 2021, our government has announced $1.5 billion in initiatives for climate change mitigation and adaptation in the agriculture sector.
• The Sustainable Canadian Agricultural Partnership was launched in 2023, with a priority of addressing climate change and advancing environmental sustainability. It aims for a cumulative greenhouse gas emissions reduction outcome of 3 to 5 megatonnes over five years.
• We are also developing a Sustainable Agriculture Strategy that will outline a shared vision for long-term action on climate change and other environmental priorities in the sector.