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Alta. fuel taxes – what you need to know

Alta. fuel taxes – what you need to know

Producers who dry grain this fall should check their propane bills for provincial tax

By Kate Ayers
Staff Writer

Western Canadian grain farmers had to dry most of their crops this year, which led to increased costs and producer uncertainty about fuel taxes and rebates in Alberta.

In some cases, the system is straightforward; many producers are well acquainted with the taxes and exemptions on farm gas and diesel.

“The Alberta Farm Fuel Benefit Program allows eligible producers to receive a 9 cent per litre provincial tax exemption on the purchase of marked gasoline and diesel used for farming purposes,” Neil Blue, a provincial analyst with Alberta Agriculture and Forestry, said in a recent ministry article.

“Eligible producers are also exempt from the provincial carbon levy on those fuels. To qualify for these benefits, producers must be actively and directly farming, be making the day-to-day management decisions, and have an annual farm commodity production worth at least $10,000.”

Farmers who receive payments from the Canada Pension Plan, Old Age Security or supplements are eligible for tax exemptions if the farm’s gross annual revenue is $5,000 to $9,999, the article said.

“Upon application approval, an exemption certificate and number are issued,” Blue said.

“Exempt producers then provide that number to their fuel distributor who excludes the provincial 9 cent per litre fuel tax and carbon levy from the purchase of marked diesel and gasoline.”

The GST registrants can also receive a rebate for the GST that the feds charge on fuel purchases.

The rules surrounding propane are less clear.

Only propane used to fuel motor vehicles, also known as a motive fuel, has a 9.4 cent per litre provincial tax in Alberta.

“However, it is possible that some propane suppliers may be charging this 9.4 cent per litre provincial tax on all propane sold,” Blue said.

“So, purchasers of non-motive use propane should check with their supplier to determine if the purchase contains that provincial tax.

“If (your bill) does contain that 9.4 cent tax, tax rebate forms are available from Alberta Finance for propane used for farming, heating, lighting and appliances.”

Suppliers charge a 4.64 cent per litre carbon levy plus GST on all propane. Producers using propane for their businesses can use the carbon levy as a farm expense. Likewise, GST registrants can apply for a refund for GST on propane used for the business, the article said.

The Remote Area Heating Allowance Program can help producers who lack access to natural gas. The program provides a rebate of up to 25 per cent for heating costs.  

More information on fuel taxes and rebate programs in Alberta is available here.


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