Important Notice Regarding New Federal Fuel Charge
March 21, 2019

As part of the Federal Budget on Tuesday March 19th, the Federal government released draft regulations that will extend the farmer exemption from the Federal Fuel Charge (aka ‘carbon tax’) to gas and diesel sold at cardlocks 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. Note that propane is not exempt for farmers);
(b) the fuel is delivered to the farmer at a farm or a cardlock facility (Note that “delivery” is defined to include making the fuel available);
(c) all or substantially all of the fuel is for use in the course of an “eligible farming activity” (see definition below); AND
(d) the farmer provides (and the seller retains) an exemption certificate in this regard. (Note: this is Form L402 - enclosed and was previously provided)

We have researched the draft regulations and received confirmation from the CRA that:

(1) This refinement to extend the farmer exemption to cardlock sales (if the above criteria are met) is effective April 1st, 2019 (the first day of implementation of the Fuel Charge); and
(2) The existing farmer exemption certificate (enclosed Form L402, which was previously provided) is sufficient to sell qualifying farm fuel exempt of the Fuel Charge at cardlocks. i.e. if we have an L402 from a farmer customer already, we do not need to obtain any further statements or certificates from them in order to sell to them exempt at a cardlock. Here is the link to the L402 form if you need it, too:

For your reference, here are the definitions of “eligible farming activity”, “eligible farm machinery”, farmer”, “farming” and “qualifying farm fuel”, “from the Greenhouse Gas Pollution Pricing Act:

Eligible farming activity

a. The operation of eligible farming machinery on a farm for the purposes of farming;
b. the operation of eligible farming machinery for the purposes of going from a location at a farm to another location at a farm; or
c. a prescribed activity. (activité agricole admissible)

Eligible farming machinery
Property that is primarily used for the purposes of farming and that is

  1. a farm truck or a tractor;
  2. a vehicle not licensed to be operated on a public road;
  3. an industrial machine or a stationary or portable engine; or
  4. prescribed property;

but does not include

e. a vehicle that is an automobile as defined in subsection 248(1) of the Income Tax Act;
f. property that is used for the purpose of providing heating or cooling to a building or similar structure; or
g. prescribed property. (machinerie agricole admissible)


A person that carries on a farming business with a reasonable expectation of profit. (agriculteur)


Includes tillage of the soil, livestock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees, but does not include an office or employment under a person engaged in the business of farming. (agriculture)

Qualifying farming fuel

A type of fuel that is gasoline, light fuel oil or a prescribed type of fuel. (combustible agricole admissible) (Note: diesel is a “light fuel oil”. Also, there isn’t a ‘prescribed type of fuel’ at this point).