OTTAWA — The Canadian Trucking Alliance is getting the same taste of carbon its BC counterpart swallowed earlier this year, and it doesn’t like it.

The CTA was quick to respond after federal opposition leader Stephane Dion introduced his party’s carbon tax plan last week.
"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 labor 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.”

Like the plan implemented in B.C., the tax is allegedly “revenue-neutral." It 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 centerpiece of the federal Liberals’ next election platform.

Prime Minister has since called the plan "bad economics" and said Canadians would get "screwed" if the opposition Liberals ever get a chance to implement it.

The carbon tax will apply to home heating oil, jet fuel, kerosene, natural gas, propane, coal and diesel fuel.

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, totaling $40 per tonne within four years.

Carbon taxes are purportedly revenue neutral. But
not for you guys who need to burn fuel to make a living

 Gasoline, oddly enough, would not be subject to a carbon tax because the current federal excise tax on gasoline of 10 cents per liter is supposedly equivalent to $42 per tonne of GHG.

In addition, since diesel and aviation fuel are already taxed at four cents per liter, 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 liter by the fourth year — or 4.9 percent compared to current prices, CTA explains in a press release.

"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," said Bradley, who is an economist by trade.

"We already have the four cent a liter 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, adding that is what the association’s "enviroTruck" initiative is all about.

"There is no tax neutrality for truckers in this plan," Bradley 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.”

"The tax system is geared to providing incentives to other industries, not trucking,” Bradley contends.

The Liberals’ tax plan, dubbed Green Shift, is silent on how or if it intends to collect the carbon tax from U.S. 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.

"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," Bradley says.