Feds mull scrapping of diesel tax: Report

OTTAWA — The hated four-cent excise tax on diesel fuel could be eliminated by the federal Conservatives, according to a report by the Financial Post.

There’s been discussion among Ottawa brass about scrapping the tax, which according to the Post, generates over a $1-billion of revenue for the federal government.

"There still seems to be a fair bit of interest from a political point of view," a source told the paper.

The source adds, however, that the proposal is facing headwinds from the Department of Finance, which is reluctant to give up the cash flow. Also, a spokesman for the Prime Minister’s Office flatly denied that such a cut in the works, according to the Post.

The trucking industry, of course, has lobbied hard to have the tax tossed.

There’s rumors the feds may scrap the
‘regressive’ excise tax on diesel. Or not, says PMO.

Canadian Trucking Alliance CEO David Bradley has in the past described it as a "repugnant and regressive," form of taxation, which has led to year-over-year federal surpluses that have not been shared with road users in the form of fuel price relief or infrastructure investment.

With prices for commercial diesel fuel at record highs, elimination of the four cent excise tax on diesel fuel, would provide truckers price relief of about 3 percent at today’s prices, Bradley wrote in a letter to the Prime Minister earlier this year.

"Whether or not the current government will actually do the right thing remains to be seen, but obviously we have been successful in getting the issue elevated of late," Bradley said to us via email.

Asked by Todaystrucking.com if a tax change might be an attempt to appease the trucking industry in advance of possible environmental taxes or fuel levies down the road, Bradley said he trusts Ottawa’s motives.

"I don’t really have any reservations that the government might turn around and make up the difference with a carbon tax, for example. Even if it did, we’d cross the bridge when we come to it.

"I have learned over the years that you can’t stop working on an issue until the final decision is made, so I am not claiming victory yet. But, I do believe that if your cause is right and sensible if you persevere you will eventually succeed."

The tax has resurfaced as a point of contention since Liberal Opposition leader Stephane Dion proposed a national carbon tax on fuel and other energy sources. The additional levy, which Dion insists is manageable for the trucking industry, would add another 7 cents per liter to the tax on diesel.

Jayson Myers, president of the Canadian Manufacturers and Exporters (CME), told the Post that anything that would reduce the cost of shipping would be a boost to Canada’s beleaguered manufacturing industry. 


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