Is B. C.’s carbon tax little more than a thinly-veiled fuel tax?
April 1, 2008
While environmental groups laud B. C. for becoming the first North American jurisdiction to announce a full-fledged "carbon" tax, the trucking industry must feel like it will be shouldering an unfair ...
While environmental groups laud B. C. for becoming the first North American jurisdiction to announce a full-fledged “carbon” tax, the trucking industry must feel like it will be shouldering an unfair share of the burden. If approved by the legislature, diesel prices will rise by 2.2 cents/litre by this summer and 8.27 cents/litre by 2012.
We all know how difficult it is for trucking companies to pass on the increased cost of fuel at the best of times. Now they must try to do so while competing companies from other jurisdictions can avoid filling up in B. C. altogether and pay substantially less for fuel. This will put
B. C.-based carriers at a competitive disadvantage, especially against fleets from Alberta that are spared not only the “carbon” tax that B. C. carriers face, but also provincial sales tax.
The province is promising the new tax will be “revenue-neutral,” with funds re-invested into individuals and businesses that reduce their reliance on fossil fuels. It’s being touted as a carrot-and-stick approach, but who can blame the trucking industry for wondering “Where’s our carrot?”
After all, there’s no recognition of the fact the trucking industry today is already operating remarkably clean equipment. The EPA07 engines are nearly smog-free. By 2010 they will be even cleaner. The trucking industry was “going green” even before the province of B. C. began debating the merits of a carbon tax.
The province’s carbon tax falls short of a cap-and-trade system, which would allow companies that reduce their emissions to then sell carbon credits to other companies that cannot reduce their pollution to agreed-upon levels. While the trucking industry has generally opposed a cap-and-trade system, at least it would provide the proverbial carrot for fleets that are able to demonstrate a marked reduction in fuel consumption. Most of the best-run truck fleets are doing this already. If a fleet operating only the latest environmentally-friendly equipment could turn around and sell credits to, let’s say, an oil and gas producer, it may actually benefit our industry.
There was mention in the province’s news release of funding biodiesel production facilities. One may speculate that fleets that adopt the use of biodiesel may be rewarded under the program. But the potential flaws of adopting alternative fuels have been well-documented. Biodiesel remains a viable option for fleets that are comfortable with its performance and benefits – but should the industry have alternative fuels forced down its throat? Particularly when there are some fairly sensible arguments out there that downplay their environmental benefits?
There’s also mention in the release of a $2,000 credit towards the purchase of fuelefficient vehicles. No word on whether trucks will qualify, but they certainly should. Hopefully this pro-gram is broad enough to include incentives toward the purchase of latest generation trucks and engines – even hybrids. Otherwise, it looks like the trucking industry will shell out tens of millions in additional taxes without receiving a fair return. And if that’s the case, let’s just call a spade a spade and a fuel tax a fuel tax.