CTA Calls on Government to Introduce Policy Equity to Carbon Pricing

The Government of Canada made a change last week to the carbon pricing system by providing a three-year carbon tax exemption for home heating oil on a regional basis and providing higher carbon tax rebates for people in rural areas.

Part of the rational provided for these changes is to bring relief amid soaring costs of living. In this announcement, the Prime Minister reaffirmed that the intent of carbon pricing was to get people to change behaviour so we can collectively reduce our carbon footprint.

“The Canadian Trucking Alliance (CTA) welcomes this recognition by the Government of Canada that the carbon pricing mechanism is causing economic hardship for Canadians and the changing behaviour can be challenging for certain areas of the economy. This statement also aptly describes the situation facing trucking companies of all sizes from across Canada,” said CTA president Stephen Laskowski.

While CTA has remained vocal about supporting policies to reduce the effects of climate change from all sectors, the Government of Canada’s recognition there are challenges to achieving these goals – whether financial or technological constraints – marks a fundamental shift in policy regarding carbon pricing in Canada.

To provide inflationary relief to Canadians and maintain policy equity in the carbon pricing system, CTA asks that the Government of Canada introduce the following measures:

  • Suspend the carbon price on diesel fuel for three years. Currently this tax serves no policy purpose as there are not readily-available or operationally feasible zero-emission engine alternatives for long-haul truckers to use (Currently only 2.8% of passenger vehicles on Canadian roads require diesel fuel).
  • Suspend the four cent a litre federal excise tax on diesel fuel until inflation has been brought under control. The federal excise tax costs a long-haul truck driver operating a 300-gallon tank vehicle an additional $45 per fill-up.
  • Restore the tax rebate that the Government of Canada removed from fuel that is used to power cooling devices that keep food trailers refrigerated and safe; as well as pumping devices used to remove food products, or commodities used to make food products, out of tanker trailers.

“Despite the best efforts of our sector and our equipment suppliers to advance decarbonization efforts, the diesel engine will continue to remain the core method of propulsion for our sector – not necessarily by choice, but because of operational and technological realities that will limit uptake of alternate power options in our sector,” said Laskowski. “Accordingly, we urge the government acknowledges that carbon pricing cannot significantly change engine purchasing behaviour in trucking. Instead, carbon pricing will only continue to increase the cost of transportation services and, therefore, all goods that are moved by truck, including food, clothing, household goods and other products critical to the wellbeing of Canadians.”

The trucking industry and CTA members are investing millions in various alternative technologies designed to replace the modern diesel engine and reduce our reliance on diesel fuel. This is highlighted by the Alberta Motor Transport Association (AMTA) investing in a multi-million-dollar program exploring the introduction of hydrogen fuel technology into trucking fleets. The results of these fleet experiences and current realities around decarbonization will be shared with all levels of government through a report in early 2024.

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