Liberal Green Shift Plan Gets
Negative Reaction from Trucking Industry
CTA touts its enviroTruck plan as
the better way to reduce GHG and air pollution
(Ottawa: June 20, 2008) -- The Canadian Trucking
Alliance was quick to respond after federal opposition leader Stephane Dion
introduced his party’s carbon tax plan on June 19th.
“While the devil is always in the details,” says CTA’s CEO,
David Bradley, ”the last thing the trucking industry needs is more tax on
diesel fuel; with diesel fuel prices at record highs and fuel overtaking labour
as the number one component of operating cost the trucking industry does not
need further price signals from government to know that improving fuel
efficiency and thereby reducing GHG emissions is a good
thing.”
Dubbed “Green Shift”, the allegedly
“revenue-neutral” plan proposes to shift part of the burden of
taxation away from income and towards pollution, putting into law that every
dollar that is raised from taxing carbon pollution be returned to Canadians in
tax cuts or through increased spending for certain social programs. . The plan
will likely be the centrepiece of the federal Liberals’ next election
platform.
Reflecting the theory that by putting a price on
carbon emissions, individuals and businesses will make decisions to reduce
polluting activities, the initial price for carbon will be set at $10 per tonne
of greenhouse gas emissions and will rise by an additional $10 per tonne each
year, totalling $40 per tonne within four years. The carbon tax will apply to
home heating oil, jet fuel, kerosene, natural gas, propane, coal and diesel
fuel. Gasoline oddly enough would not be subject to a carbon tax because the
current federal excise tax on gasoline of 10 cents per litre is supposedly
equivalent to $42 per tonne of GHG. In addition, since diesel and aviation fuel
are already taxed at four cents per litre, the carbon tax on these fuels would
see no increase in the first year of the plan. In the examples provided in the
plan, the federal tax on diesel fuel would rise by an additional 7 cents per
litre by the 4th year – or 4.9% compared to current
prices.
According to Bradley, who is trained as an economist,
“I appreciate the theoretical underpinning of a carbon tax, of pricing
externalities. I could probably even design a carbon tax that the trucking
industry would find palatable and that would actually help the industry improve
its fuel efficiency, but this plan will simply make freight transportation in
Canada more expensive, impairing Canada’s competitiveness and impeding
investment in fuel efficiency.”
“We already have the four cent a litre federal
excise tax on diesel fuel, which serves no policy purpose whatsoever, other than
to raise cash for the federal government. They could, for example, make that tax
a carbon tax, and earmark the revenues generated by it to assisting the industry
in its efforts to accelerate the penetration of the new generation of smog-free
trucks and fuel efficiency technologies into the marketplace,” he said.
“That is what our enviroTruck initiative is all about – getting the
new things that can have a profound impact on lowering smog and GHG emissions
into the fleet quicker. Taxing diesel fuel is not going to help that process;
it’s only going to make it more difficult for
carriers.”
Bradley says truckers have a different view of what
tax revenue-neutrality means compared to what is espoused in Green Shift.
“There is no tax neutrality for truckers in this plan,” he contends.
The plan itself estimates that the end of the fourth year “the average
freight trucker’s total annual operating expenses (will be increased by)
approximately $1,700 per year.”
Bradley contends that the proposed modest reductions
in corporate income tax rates will do little to offset the impact of a carbon
tax in a low margin business like trucking. In addition, the plan proposes to
accelerate CCA write-offs for “green technologies”, investments that
would help the trucking industry to conserve fuel – auxiliary power units,
aerodynamic fairings, wide base single tires, and the other components of an
enviroTruck – are not currently eligible for faster CCA treatment.
“The tax system is geared to providing incentives to other industries, not
trucking,” Bradley contends.
The Green Shift plan is silent on how or if it intends
to collect the carbon tax from US carriers. It is possible that US trucks will
be exempt which will exacerbate the tough competitive position that Canadian
truckers are already in, given the high dollar and shrinking trade surplus.
“On any given day, about 30% of the transport trucks on Canada’s
major trade routes are from the US; a carbon tax that applies only to Canadian
trucks would have a profound impact on our industry’s competitiveness and
would do nothing for the environment.”
-30-
Find out more about CTA’s enviroTruck
initiative:
http://www.cantruck.com/envirotruck/index.html
About CTA -- The Canadian Trucking Alliance is a
federation of provincial trucking associations. We represent a broad
cross-section of the trucking industry—some 4,500 carriers,
owner-operators and industry suppliers. With our head office in Ottawa and
provincial association offices in Langley, Calgary, Regina, Winnipeg,
Toronto, Montreal and Moncton, CTA represents the industry’s viewpoint on
national and international policy, regulatory and legislative issues that affect
trucking.
www.cantruck.ca
© 1995 -
2008, Ontario Trucking Association
555 Dixon Road, Toronto, Ontario
M9W
1H8
Tel: (416) 249-7401 | Fax: (416) 245-6152
Email:
info@ontruck.org