VANCOUVER, B.C. — The carbon taxes announced by the BC provincial government yesterday will cost the trucking industry “dearly,” according to the president and CEO of the B.C. Trucking Association.
Paul Landry measures that cost to be about $1,000 per long-haul truck this year, about $3,000 in 2009 and $6,000 in 2012. Further, the total cost to the industry will be in the tens of millions of dollars this year, potentially rising to hundreds of millions over the next five years.
“Carbon taxes may have a role to play in encouraging the reduction of greenhouse gases in some sectors and amongst consumers, but the trucking industry has no choice but to rely on diesel fuel to keep the economy moving.”
Virtually everything B.C. residents use in daily life, and the ingredients the province’s businesses need to remain competitive, move by truck, adds Landry. The trucking industry is largely responsible for the transportation of food, merchandise, parts and equipment each day, and is an important part of the province’s economy and individual well-being.
“When you consider it trucking is the lifeblood of BC. Without trucking, the economy and our way of life would literally stop.”
Adding a carbon tax to diesel fuel won’t do much to change the industry’s behaviour, but it will raise the cost of transportation, a sentiment shared throughout the trucking association, according to the BCTA president.
“Our members have clearly told us that a tax like this won’t be easy to pass on. Some of them are bound by contracts. Other trucking companies are price takers because some of the industries we serve, such as forestry, are under extreme pressure.”
While BCTA is pleased that corporate, small business and personal taxes will drop as a result of the government’s commitment to revenue neutrality, the carbon tax is expected to be far from neutral for the trucking industry, which is plagued by slim operating margins. Much of the industry is made up of thousands of small home-based operators with fleets of only two or three vehicles, many which are expected to find it difficult to recover additional carbon taxes of $6,000 to $9,000, (potentially rising to $12,000 to $18,000) per year, with offsetting business or income taxes or through freight rate increases.
The carbon tax may also negatively affect BC’s competitiveness, considering that diesel fuel taxes in BC will now be up to three times higher than in Alberta, and almost twice as much as most other provinces, according to Landry.
“Over the next five years this gap will increase. Manufacturers, retailers and resource sectors will have to pay more for trucking transportation services.”
The BCTA is pleased that the government will be investing in green initiatives at ports, tax exemptions for aerodynamic devices and smog reduction technologies for trucks, but the investments are considered modest in comparison to the carbon tax hit. The BCTA would prefer that more is done to help the trucking industry reduce its carbon footprint, and supports long-term provincial GHG reduction targets.
Trucks haul about 90% of Canada’s consumer products and foodstuffs and two-thirds of the country’s trade with the United States Canada’s largest trading partner. In BC, trucking is the lifeblood of the province’s economy. Tens of thousands of truck trips take place on the province’s major roadways each day, transporting over $60 billion of freight within BC and to and from the rest of Canada. Trucks also handle over $37 billion in trade between B.C. and the U.S.
For more on B.C.’s new carbon tax, see James Menzies’ blog on the home page of Trucknews.com.
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