The Canadian trucking industry is supportive of current and future carbon reducing regulations, but decision makers should heed lessons from the past when considering future environmental policy direction and regulatory language.
That was essentially the message delivered by Canadian Trucking Alliance President Stephen Laskowski today in Ottawa to the Standing Senate Committee on Agriculture and Forestry.
“Trucking is currently the only freight mode in Canada using equipment regulated from a carbon perspective,” he explained. “Future rules will reduce our carbon footprint. The Canadian Trucking Alliance is supportive of this path to reduce our sector’s carbon footprint. However, the targets set for future regulations must be based on proven technologies and any carbon pricing system needs to be properly structured and revenues must be funneled to support future green transportation technologies and infrastructure.”
Laskowski said the industry is hopeful the upcoming Phase II GHG-reduction regulations do not introduce equipment with the same reliability challenges that previous regulations forced into the industry, leading some fleets to purchase up to 20% more power units because of breakdowns related to the mandated equipment.
Laskowski specifically pointed to concerns with mandated tire inflation systems on trailers in 2018. While the technology works, it must be built to Canadian standards. The recent recall legislation introduced by Minister Garneau could help in this area, added the CTA president, but only time will tell.
“Governments must do their part by removing regulatory and other barriers that stand in the way of the industry’s efforts to become more fuel efficient when introducing these technologies,” said Laskowski, pointing to the federal government’s cancellation of diesel fuel refunds for fuel-saving devices like electrical temperature-controlled trailers; power take-off units; and auxiliary power units (APUs)/in-cab heaters
While CTA is not conceptually opposed to carbon pricing, Laskowski stressed that if the federal government proceeds with a national carbon pricing system, it must be properly structured, transparent, and easy to administer. Moreover, it needs to be coordinated on a national and international basis to avoid regional competitive disparities. Furthermore, revenues raised from the carbon pricing system should be directed into programs that accelerate investment and industry adoption of environmental solutions.
Fuel is the second largest cost for a trucking company; and, combined with choppy economic growth and a depressed U.S. dollar, it is unreasonable to expect low-margin trucking companies to absorb aggressive carbon price increases without passing them onto customers.
“Since US trucking companies will not face similar carbon pricing pressures, we have concerns with the Canadian trucking industry’s ability to stay competitive in the North American market,” Laskowski told the committee. “When considering carbon pricing mechanisms, it’s essential government at all levels recognize Canada and the Canadian supply chain must still compete globally and our systems of capturing rising fuel prices must be taken into account.”
CTA is also questioning the federal government’s current proposal, which exempts certain sectors. He said if Ottawa’s carbon pricing plan is truly about emissions, then all transportation modes must be treated equally.
Laskowski urged lawmakers to clearly identify a policy purpose for any national carbon pricing system.
“Making diesel more expensive for trucking fleets will not create the emergence of a viable alternative anytime soon,” he said. “CTA believes the only sound policy rationale for mandating carbon pricing on diesel fuel is to assist the trucking industry in introducing proven carbon reducing technologies under Environment Canada’s GHG regulation.”