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​CTA Highlights Challenges with Federal Carbon Pricing Approach

August, 2017

The Canadian Trucking Alliance (CTA) has made a submission highlighting the administrative and competitive challenges created by the proposed federal pricing system contained in the federal government’s report released in June.

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p class=”p3”> While CTA is not conceptually opposed to market-based solutions like carbon pricing, contending that since diesel fuel is the second largest operating cost component after labour, the Alliance has for months <a href=”http://cantruck.ca/cta-outlines-carbon-reduction-path-to-senate-committee/” been”=”” target=”_blank”>warning against taking the program down certain paths.

In its submission, CTA declared that without more information, clarity, and changes in certain policy areas CTA cannot support the federal government’s plan.

The following is a summary of CTA’s primary concerns:

•The technical paper proposes dramatic increases in carbon pricing in a short period without factoring in overall and sectorial economic conditions.

•The system proposed in the technical paper appears to create an administrative burden for the trucking industry, through the creation of a federal system for fuel reporting.

• The federal system creates competitive issues between Canadian and U.S. carriers.

• The federal system would compound issues relating to fuel surcharge.

• The technical paper makes no recommendations on how carbon pricing and the revenue raised will be reinvested back into our sector to reduce carbon emissions from trucking equipment.

• If revenue from the federal carbon pricing system flows back to the provinces, it must do so with strict conditions. The revenue must be reinvested back into industry and not simply flow into general revenues.

• The technical paper establishes a carbon pricing system that will generate inequity between the freight modes.

• The technical paper also includes exemptions for certain farming activities along with exemptions in marine and aviation. It is CTA’s view, the Canadian trucking industry, especially those exposed to international competition, should also receive relief from the levy if the government is committed to exemptions for certain sectors.

• The federal government already has a road-based tax for trucking (federal excise tax on diesel) which currently serves no policy purpose. This tax could be repurposed as a carbon tax at $10/tonne, with minimal disruption to the industry, but maximal effect.

“The federal government appears very committed to implementing a federal carbon pricing system by 2018, the prime role of CTA moving forward is work with federal officials to mitigate the administrative impact of this system on our sector as well as to make the federal carbon price as transparent as possible to allow carriers and customers to understand the impact of this government initiative on the cost of moving goods,” said CTA president Stephen Laskowski