Federal Fuel Charge Carbon Tax
December 2, 2019

Overview
The new Federal Fuel Charge (aka Carbon Tax) was effective April 1st 2019 in Saskatchewan, Manitoba and Ontario, on July 1, 2019 in Nunavut and Yukon, and will be effective on January 1st 2020 in Alberta (collectively referred to as “Listed Provinces”). 


Exemptions for Farmers
There is a limited exemption for fuel that is sold to a farmer if and only if all of the following criteria are met:
(a) the fuel is “qualifying farm fuel” (which is defined as gasoline or diesel that is for use exclusively in the operation of eligible farming machinery and that all or substantially all of the fuel is for use in the course of eligible farming activities). [ Note that propane is not exempt for farmers];
(b) the fuel is delivered to the farmer at a farm or cardlock (no exemptions at a gas bar);
(c) all or substantially all of the fuel is for use in the course of eligible farming activities; AND
(d) the farmer provides (and the seller retains) an exemption certificate [L402 – see below and attached] in this regard.

In order for us to sell delivered gas or diesel exempt of the Fuel Charge to a farmer customer, we must receive a signed Form L402 Fuel Charge Exemption Certificate for Farmers and retain it on file. See the enclosed fillable pdf. Each qualified farmer customer should complete this form as soon as possible and provide it to their Retail or FCL (who must keep it on file) and retain a copy for themselves.

Further information about the exemption for farmers and instructions on completing the L402 form can be found on CRA’s website at the following link:
https://www.canada.ca/en/revenue-agency/services/tax/excise-taxes-duties-levies/fuel-charge/relief.html