BCTA takes exception to revenue neutral carbon tax claims
Posted: August 1, 2014
LANGLEY, B.C. — On the verge of B.C.’s carbon tax implementation, the B.C. Trucking Association is still wondering what the environmental tax will accomplish.
On July 1, everyone in B.C. will begin paying a little bit more for pretty much all fossil fuels, including gasoline, natural gas, coal, propane, home heating fuel, and of course — diesel.
Being billed as revenue-neutral, the government is willing to hand back all the funds it receives through the tax back to the province’s citizens through personal and business tax cuts.
But with the trucking industry being heavily reliant on diesel fuel and unable to just drive less, BCTA president and CEO Paul Landry points out, truckers will end up paying more than they get back.
“Families in the trucking industry will be net payers by a substantial margin,” stated Landry. “Because diesel fuel comprises the largest portion of operating costs, the trucking industry – responsible for transporting every day necessities for consumers, manufacturers, exporters and importers – will be paying an excessive portion of the tax.”
The BCTA questions whether or not truckers are going to get a fair share of the carbon tax back.
The BCTA estimates the carbon tax collected from the industry will amount to about half a billion dollars in the first five years. This is a conservative estimate because it’s based on the assumption there will be no change in consumption over the five-year period.
“On a more personal scale, this means an ‘average’ long-haul owner-operator will pay $1,000 in 2008, $3,000 in 2010 and $6,000 in 2012 in carbon taxes,” explained Landry. “In 2008, the same owner-operator can expect to get back between $20 and $51 in personal income tax cuts plus the $100 carbon tax cheque per family member. If that same owner-operator lives somewhere in the province where public transit isn’t an option, he’ll be paying carbon tax for other forms of fuel for a personal vehicle, as well as for home heating and/or natural gas.
“So, by anyone’s calculation, an average owner-operator with a spouse and two children will get the highest payback in 2008 when the carbon tax is only being charged for six months and the one-time $100 cheques are in the mail. In the future, this owner-operator will be receiving literally two or three cents back for each dollar in carbon tax paid. The situation isn’t much different for the vast majority of trucking companies that pay small business or corporate business taxes. Does this sound revenue-neutral?”
“A tax that, by the government’s own admission, is too low to incent a behavioural transformation, must be accompanied by a full and robust menu of policies and programs that encourage or support the change in other ways,” continued Landry. “For the trucking industry – struggling with miniscule margins and often dependent on cash flow for purchases – the menu has to include reliable information about fuel-saving technologies and re-directing the carbon tax into financial support to make those necessary purchases.
“Given the amount of tax that’s projected to be collected from the industry, this isn’t asking for much. In fact, it’s a potential win-win situation where the provincial government, if it is serious in its goal to reduce emissions, could really put the carbon tax to work.”