Ontario Trucking Association President Stephen Laskowski addressed the Standing Committee on Finance and Economic Affairs at Queen’s Park last night and provided insight into how the government can manage pricing and consumer costs and attract new business investment to the province by keeping the province’s supply chain moving efficiently and effectively as possible.
While no business sector has been immune to inflation, the trucking industry has been hit particularly hard, as the price for fuel and labour – the industry’s two leading operating costs – rose exponentially, explained Laskowski.
The price of fuel, in particular, is having an enormous effect on supply chain inflation, which is eventually reflected in the price of goods and food on store shelves.
While fleets are driven by both social and business reasons to limit their fuel consumption and utilize technology to optimize fuel efficiency, there are currently very few viable, market-ready heavy-duty alternatives for fleets.
“Alternative powered engines and devices – like electric trucks – are a part of the journey to zero emissions, we are still in the very early stages of development and infrastructure readiness to serve the Ontario supply chain,” he said. “The diesel engine will continue to move the Ontario economy for the near future; not necessarily by choice or lack of willingness to invest in new technology, but because of necessity. This is the reality.”
Consequently, this is the reason both large and small fleets remain frustrated with the carbon tax, which is designed to increase the cost of diesel fuel incentivise the purchase of lower emission and more fuel-efficient vehicles.
“However, with no viable alternatives in our sector, the carbon tax does nothing to change purchasing behaviour. All it does is increase fuel costs and pile inflation onto the supply chain,” said Laskowski, who pointed out the carbon tax adds as much as $20,000 per truck, per year. “A small fleet owner with just five trucks is seeing between $75,000 and $100,000 in extra costs associated with the carbon tax.”
Unlike the federal government – which thus far has shown an unwillingness to react to the Canadian Trucking Alliance’s proposal to suspend the carbon tax temporarily as it did for home heating oil in Atlantic Canada – Bill 146 in Ontario (which would extend a 5.3-cent fuel tax reduction until June 30 2024) does consider the inflationary impacts of energy prices and would bring relief to the supply chain and consumers.
OTA estimates this six-month reprieve translates into fuel costs savings of up to $3100 per truck.
“We applaud the Government of Ontario for this measure and encourage all committee members to champion this proposal, which would help every single business and Ontarian.”