The Effect Of Carbon Tax On Canadian Trucking Industry

Every time there is an increase in the prices of diesel; Canadian trucking companies are always affected. However, the reality is the cost of transportation goes up because of the carbon tax and the charge will be ultimately passed on to consumers. With the federal carbon surcharge taking effect last April 1, diesel prices in 4 Canada provinces will become more expensive.

The price of diesel will increase by C$0.054 per liter or C$0.20 per barrel in Ontario, Saskatchewan, New Brunswick and Manitoba. The federal government has mandated the charge in the four provinces because their governments did not impose the carbon pricing scheme.

According to the estimates of Canadian Trucking Alliance (CTA), the surcharge will add C$3,500 to the annual costs of operating a long haul truck per year. Eventually, the surcharge will increase to about C$0.134 per year per litter by 2022 or C$3.2 billion for the industry. Trucking companies and their customers are not happy with the surcharge because it will add to their costs.

The diesel surcharge is a part of the government’s broad efforts to reduce greenhouse gas emissions. However, the government will be introducing tax rebates of about C$200 to C$400 for individuals because carbon pricing will affect regular gas.

CTA says the trucking industry does need the extra motivation of a carbon tax in order to be fuel efficient. The premise of a surcharge is not the proper way to reduce emissions. CTA is asking the government to return the revenue from carbon tax to the industry for carbon-reducing investments.

Meanwhile, Osborne of Day & Ross agrees that the federal government needs to provide more incentives so that fleets can reduce emissions. Carbon tax may have a positive effect because the industry will be forced to make trucks and trailers more efficient.

A variety of shipping services is offered by Canadian trucking companies from full truckloads to less than load including temperature controlled FTL for goods and expedited deliveries. Full truckloads refer to shipments that can fill an entire trailer while less than load does not require an entire trailer. Refrigerated trucks and trailers are available for temperature-specific goods.