Alberta’s new carbon tax

by Derek Clouthier

CALGARY, Alta. – “We think there’s going to be a definite impact on our industry,” Alberta Motor Transport Association (AMTA) president Lorraine Card said of the province’s new carbon tax levy. “It was very bad timing with the downturn in the economy and a lot of our members are currently struggling.”

Commencing Jan. 1, Albertans were welcomed to 2017 with higher fuel prices, among increases for some other services and goods, in the NDP government’s effort to raise money to diversify the province’s energy industry and encourage people and businesses to reduce their carbon footprint.

Card, however, said with some AMTA members having to close their doors, lay off staff or endure salary rollbacks during Alberta’s approximate two-year downturn, a carbon tax is not what the industry needed right now.

“So we know it’s tough out there and we think this (Alberta’s carbon tax) is just another burden on our industry that we really just don’t need at this point in time.”

Card said one of the most frustrating aspect of the NDP’s carbon tax is that when the minister first made the announcement in 2015, the AMTA was hopeful the government would be open to working with the transportation industry to establish some kind of savings on carbon tax for companies that employ energy reduction measures, such as single wide-base tires, boat tails, side skirts and electronic logging devices (ELDs), all of which Card said would help reduce fuel consumption.

“We plan to meet with the government and hopefully if some trucking companies are taking the initiative to equip their fleet with some of these energy reduction savings, there should be an opportunity to recover some of those costs using some of the funds that are coming out of the carbon
tax pool.”

Card said the Alberta Climate Leadership panel submitted a report to the provincial government in November 2015, indicating that the proposed carbon tax policy would have an impact on business depending on their energy intensity.

She even referenced a quote by Environment Minister Shannon Phillips stating, “Businesses will be affected by the increase in transportation fuel costs. We have no clear solution to this…we encourage the government to examine as part of its evaluation of priorities, mechanisms which ban reduce impacts on businesses.”

Card said the trucking industry has been proactive in its efforts to utilize new technologies to help curb fuel consumption and greenhouse gas emissions.

“We were concerned with our own fuel usage and our own carbon footprint way before this came into play,” Card said. “There’s nothing coming back to the industry and that’s where we’re hoping to have a conversation and suggest something like that.”

The Alberta government did reduce the small business corporate tax rate from 3% to 2% in an effort to try an offset the effects of the carbon tax levy, which the government said would save business owners $185 million in 2017-18.

However, Card said it’s not just about small businesses, but also those that are proactively trying and succeeding at reducing their carbon footprint with the use of ELDs and super singles.

“We’re trying to do things that improve the environment, and it’s been a process,” Card said, referencing the single wide-base tire pilot project as an example, which had taken some time to get rolling.

The AMTA has asked for an extension on the pilot until the end of June so that the new generation tires can be testing in all seasons and climates to ensure their reliability at their load limit.

For 2017, the carbon tax adds 5.35 cents per liter of diesel, 4.49 cents to gasoline, 1.011 cents to natural gas and 3.08 cents to propane. That levy will increase in 2018, 2.68 cents for diesel, 2.24 cents on gasoline, 0.506 cents on natural gas and 1.54 cents for propane.

The government estimates the carbon tax levy will garner $9.6 billion, with $6.2 billion being used to diversify Alberta’s energy industry and remaining $3.4 billion being given back to households, businesses and communities by way of rebates, small business corporate tax cut and to help coal and Indigenous communities move toward cleaner energy sources.

Card said she was disappointed that the carbon tax levy on diesel was higher than it was for gasoline, which is somewhat of a knock on the industry.

She also indicated that several AMTA members have received inquiries from their customers questioning how much of their costs are for fuel and how much is due to the carbon levy.

“Everybody’s looking for how this is going to affect them,” Card said. “It is going to roll out to the consumer, there’s no way that it can’t. Everything that we have was on a truck at some point in time, so we think there is going to be a definite impact.”

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