A plain-language reference for Southwestern Ontario farm operators. The federal carbon charge on propane went to zero on April 1, 2025; the Ontario propane levy was repealed on July 1, 2025. Only the federal change moved the dryer, barn, and greenhouse line on your invoice — the Ontario change applied to road-vehicle propane, which most farm propane is not. The math, the regulations, what is still on the invoice in 2026, and what could change.
Two propane-tax changes hit Ontario invoices in 2025. The federal carbon charge on propane went to zero on April 1; the Ontario propane levy was repealed on July 1. Trade reporting framed that as 16.68 cents per litre of statutory tax coming off propane in a single 90-day window.
For a farm operator burning propane in a grain dryer, a livestock barn, or a greenhouse, that number is not the one that moved your invoice. The Ontario levy applied only to road-vehicle propane; stationary farm propane was already non-taxable under the Gasoline Tax Act before the repeal. The change that moved your dryer line was the federal piece — 12.38 cents per litre — and it came off your invoice on April 1, 2025.
This article is the plain-language reference for what changed, where the rules are written down, and what the math looks like on a typical farm delivery. It is not a political article. The rules are the rules; the dollars are the dollars. The Ontario levy gets its own section at the end because there is one place on a farm where it did apply — and that section is honest about it.
Two statutory line items came off Ontario propane invoices in 2025, on two different dates, under two different governments.
| Change | Per-litre amount | Effective date | Authority |
|---|---|---|---|
| Federal fuel charge on propane set to zero | −12.38 ¢/L | April 1, 2025 | SOR/2025-107 under Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186, Schedule 2 |
| Ontario propane levy repealed | −4.30 ¢/L (road-vehicle propane only — see below) | July 1, 2025 | Bill 24, Plan to Protect Ontario Act (Budget Measures), 2025, amending Gasoline Tax Act, R.S.O. 1990, c. G.5 |
| Combined statutory removal | −16.68 ¢/L (road-vehicle propane) | — | — |
| Combined statutory removal | −12.38 ¢/L (stationary farm propane) | — | — |
The federal change is the one to anchor on if your propane goes into a dryer, a barn, or a greenhouse. The Ontario change matters too, but in a narrower place — at the cardlock, on a propane forklift in the shop is not one of them, and that distinction is what the next section is about.
The federal fuel charge under the Greenhouse Gas Pollution Pricing Act (GGPPA) applied to propane regardless of how it was burned. Stationary or in a road vehicle, residential or agricultural, the federal rate was the federal rate. From April 1, 2024 to March 31, 2025 it sat at 12.38 cents per litre on propane. Effective April 1, 2025, SOR/2025-107 set the rate to zero.
The wording the Canada Gazette used:
"the Amending Regulations will cease the application of the fuel charge, starting on April 1, 2025, by setting the applicable charge rates in Schedule 2 of the Greenhouse Gas Pollution Pricing Act to zero."
The Act itself remains in force. The charging rate is what changed, and the rate is set by regulation, which means it can be set back without new legislation. The statement that follows from those two facts is not a prediction — it is the structure of the law. The current zero rate is the current state of the regulation, not a permanent property of the statute.
For an Ontario farm operator, this is the change that moved the per-litre price on the dryer pad and on the barn pad. Whatever you were paying on April 1, 2025 for stationary propane, your next bill was about 12.4 cents per litre lighter on the base, before HST.
The Ontario Gasoline Tax Act propane levy was 4.3 cents per litre and applied only to propane used in licensed motor vehicles — auto-propane at a cardlock, propane-fuelled commercial vehicles, interjurisdictional carriers. Stationary propane — the propane that goes into a grain dryer, a livestock barn, a greenhouse, or a residential furnace — was non-taxable under the Gasoline Tax Act well before 2025. The bookkeeping was already separate; the rate on the stationary side was already zero.
What Bill 24 did on July 1, 2025 was remove the levy on the road-vehicle side. Ontario.ca's current Gasoline Tax page now states it plainly: "as of July 1, 2025, all uses of propane are non-taxable."
The honest version of the headline change for a farm operator is: the administrative simplification arrived in July, the dollar change had already arrived in April. A SW Ontario grain-drying operator saw an effective drop of roughly 12.4 cents per litre on the dryer invoice between April 2024 and April 2025, entirely from the federal change. The July 2025 Ontario change did not move that line.
There is one place on a farm where the July change did show up: if you fuel a propane-fuelled licensed vehicle — a propane pickup, an older propane-fuelled service truck — at a cardlock or fleet pump, the autogas side of that account is where the 4.3¢/L came off. That side of the bill is genuinely 16.68¢/L lighter than it would have been two years ago. The dryer side is not.
A standard farm bulk drop in Perth, Oxford, Middlesex, Huron, or Wellington runs 3,000 to 5,000 litres at the dryer pad or the barn pad. Take the 4,000-litre case at an indicative wholesale-plus-margin base price of $0.80 per litre delivered, the May 2026 Southwestern Ontario agricultural benchmark midpoint. The arithmetic, before and after the federal change, looks like this:
| Line item | Pre-April 2025 | Post-April 2025 | Δ |
|---|---|---|---|
| Wholesale + logistics + dealer margin (commodity layer) | $3,200.00 | $3,200.00 | unchanged |
| Federal carbon charge (12.38 ¢/L × 4,000 L) | $495.20 | $0.00 | −$495.20 |
| Ontario propane levy (stationary use — was already $0) | $0.00 | $0.00 | unchanged |
| Subtotal pre-HST | $3,695.20 | $3,200.00 | −$495.20 |
| HST at 13% | $480.38 | $416.00 | −$64.38 |
| All-in delivered | $4,175.58 | $3,616.00 | −$559.58 |
The full all-in invoice on that delivery is about $560 lighter than it would have been at the same commodity price two years ago — $495.20 from the carbon-charge line, $64.38 in HST that no longer recaptures on a grossed-up base.
Across a 30,000-litre annual draw on a 1,000-acre cash-crop operation, the same per-litre arithmetic compounds to roughly $4,200 a year in pre-HST tax that is no longer on the invoice, plus roughly $546 in HST that is no longer charged on top of it. The numbers scale linearly; the operation does not need a spreadsheet to estimate them.
What the table does not show is the wholesale commodity price moving in either direction. The Sarnia hub — the price-formation point for almost all Eastern Canadian propane — was at 33.40 CAD¢/L on December 13, 2025 and 36.81 CAD¢/L on May 8, 2026 (NB EUB schedule, OPIS-sourced). That is the layer that moves your bill week to week. The tax change is a one-time step. The commodity layer is the daily weather.
After both 2025 changes, the propane line on a Southwestern Ontario farm invoice has exactly one tax on it: HST at 13%. The Excise Tax Act, R.S.C. 1985, c. E-15, Part IX is the federal authority for HST; the rate of 13% is the harmonized rate for Ontario.
For an HST-registered farming corporation, that 13% is recoverable as an input tax credit. It moves through the books rather than sitting on them. Most working Ontario farms are HST-registered. If yours is, the line is a working-capital item, not a permanent cost.
The propane line on a 2026 invoice is therefore composed of two parts: the delivered base price (commodity + midstream + logistics + dealer margin) and HST on top. Nothing else. No federal carbon charge, no Ontario propane levy, no provincial fuel charge, no clean-fuel-regulation surcharge on the propane side. If a propane invoice in 2026 carries any line that looks like a carbon charge or a provincial propane tax, that is a bookkeeping error and worth a phone call.
The Sarnia wholesale price has not moved because of the tax changes. The bulk-haul cost from Sarnia to a regional plant has not moved. The last-mile bobtail allocation, the tank-rental amortization, the TSSA and insurance line, the dispatch and admin overhead — none of these moved. The dealer's gross margin per litre has not moved because of the tax changes either.
What moves your bill week to week is the commodity layer. The Sarnia rack price moves daily on global propane fundamentals — crude, US LPG export demand, winter degree-days across Ontario and Quebec, the status of pipeline routes into Sarnia. The tax change was a one-time step in April 2025; the commodity has been moving every week before, during, and since.
This is the same point made on the grain-drying article and the greenhouse article from a different angle — the protection against an October spike is pre-positioning and contract structure, not the tax line. The tax line is what it is and is not going to surprise you. The commodity line is the one that needs the discipline.
The Greenhouse Gas Pollution Pricing Act remains in force. The rate is what was set to zero, by regulation. A future government could re-set the rate by regulation; new legislation is not required.
The Department of Finance Canada published proposed amendments in May 2025 that would permanently repeal Part 1 of the GGPPA in phases — April 2025 charging provisions repealed, October 2025 rebate provisions repealed, November 2025 registration repealed, April 2035 full wind-down. As of May 2026 those amendments have not been enacted. Treat the current state as the current law, not a permanent property of the statute.
There is no replacement consumer carbon levy in effect at the federal or Ontario level as of May 2026. Industrial Output-Based Pricing System pricing continues for large industrial emitters; that regime does not reach farm propane.
The Ontario change is statutory rather than regulatory — the Gasoline Tax Act itself was amended by Bill 24. Reversing the Ontario change would require new legislation. The federal change is the more politically reversible of the two by structure, not by prediction.
The dryer pad, the barn pad, and the greenhouse pad in Southwestern Ontario got 12.38 cents per litre lighter on April 1, 2025, with another 1.6 cents per litre of HST coming off the lower base — roughly 14 cents per litre all-in on the stationary farm line.
The cardlock side of the same operation, if you have a propane-fuelled licensed vehicle, got the additional 4.3 cents per litre off on July 1, 2025 — call it the full 16.68 cents per litre there, plus the HST recapture.
HST at 13% is the only tax on a 2026 propane invoice in Ontario. The commodity layer at Sarnia is what moves your bill week to week. The tax change was a one-time step.
The companion article for fleet, construction, and warehouse operators — where the road-vehicle 16.68¢/L story applies in full and the stationary-side story does not — is What the 2025 tax changes did to your propane bill — the commercial version.
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