Beginning on April 1, a carbon charge will be applied on all diesel fuel consumed in Canada. In provincial jurisdictions without a carbon charge currently in place, the price of diesel will add 5.37 cents per litre in 2019, rising to 13.41 cents by 2022. For a long-haul truck consuming 88,000 litres of fuel each year, this translates into more the $3,500 in operating costs in 2019 and approximately $11,800 by 2022. With about 270,000 large combination trucks in Canada, the Canadian trucking industry could contribute $945 million in 2019 carbon charge payments and close to $3.2 billion by 2022. (The average fuel efficiency of a Class 8 truck reporting to Natural Resource Canada’s Smartway program is 38.4 litres per 100 kms. With a Class 8 long-haul tractor travelling 230,000 kms a year).
To help educate the public on the impact of the carbon charge on the trucking industry, CTA has prepared a document and infographic highlighting this impact. Click here.
“The trucking industry is dominated by small businesses and competes on very tight margins, with operating ratios in the 0.94 range,” said CTA Chair Scott Smith. “With these operating ratios, the ability to absorb rising costs is a challenge. Everyone in the supply chain needs to understand the impact of this charge and CTA hopes the release of this document will spur those individual discussions.”
To help offset these rising cost challenges associated with the carbon charge, CTA continues to call on the federal government to introduce a heavy truck green technology incentive program similar in structure to Eco Camionnage program in Quebec. This program features incentives for such technology as anti-idling, aerodynamics for tractors and trailers, driver monitoring and telematics and hybrid-electric propulsion systems.
The CTA document also highlights how the trucking industry is the only freight mode in Canada to use both first-and second-generation Environment Canada-regulated carbon-reducing equipment. Environment Canada estimated reduction in carbon emissions from trucking equipment between 2014 and 2030, the Phase I and II period of the regulation, is 6 megatonnes, at a cost to the trucking industry of $8.3 billion in additional capital investment.
“It is important for government keep in mind, as noted in the Phase I and II heavy truck carbon regulations, that the diesel engine remains the most viable option for the long-haul trucking industry,” said Smith. “Combined with the fact that fleets need to stay competitive in the marketplace by managing their fuel consumption irrespective of a carbon charge and making additional capital investments in carbon regulated equipment, these facts leave many CTA members questioning the policy rational of a carbon charge on diesel, especially if the revenues contributed by industry does not flow back.”
To also assist the industry in learning more about the federal carbon pricing system on Monday, March 25, 2019, the Canada Revenue Agency (CRA) will be hosting a national webinar on the federal carbon tax registration system. Under this system, inter-provincial carriers that operate into, out of, or through Manitoba, New Brunswick, Ontario or Saskatchewan (beginning April 1, 2019), and Nunavut or Yukon (beginning July 1, 2019) will need to register with the CRA. It is highly recommended that all inter-provincial carriers have staff participate in this webinar. For webinar details, please click here.
