(Resource News International) — After drawing heavy criticism from a variety of Canadian industries, Liberal leader Stephane Dion revised his party’s controversial environmental plan. However, sources within the Canadian agriculture and trucking industries say the revisions still do not address their concerns about the plan.
The cornerstone of Dion’s environmental proposal, dubbed the “Green Shift,” is a carbon tax meant to punish Canada’s heavy greenhouse gas emitters and polluters. The extra funds generated by the tax will be distributed in the form of small business, corporate and personal income tax rebates to help offset the additional costs incurred as a result of the tax.
As many Canadians grapple with what the tax might mean for them personally, the trucking and farming industries are voicing their concerns about what it will mean for producers and truckers with their heavy use of fertilizer and fuel.
Humphrey Banack, president of Alberta farm group Wild Rose Agricultural Producers, said a lot of the positive environmental steps already taken by the industry are not recognized in the Green Shift. The plan offers incentives for future actions but is not retroactive, providing no money for programs and initiatives already in place.
Banack said he is also worried about the ability of Canada’s farming sector to remain competitive globally if it is required to bear the added costs of the carbon tax.
“Added costs make it hard to compete internationally and
we are a major exporting country. It is a big part of our business. When we lose our international competitiveness, that worries me,” Banack said.
Producers are worried as well about having to swallow up extra costs due to the carbon tax that they would be unable to pass on to consumers.
“The market dictates our price, so it is very difficult for us to see more costs to doing business because we can’t pass them on,” Banack said.
Ron Bonnet, second vice-president of the Canadian Federation of Agriculture, expressed similar concerns about the Green Shift’s potential impact on Canada’s ability to compete in the agricultural market. The CFA is taking the view that the Green Shift’s carbon tax would make it more difficult for Canadian producers to compete on equal footing, even within Canada, he said.
“If we’re producing a product in Canada and we have to pay a third more in costs, our competitors in the U.S. and elsewhere can ship product into our country because they don’t have that cost. It becomes a huge issue in terms of competitiveness,” he explained.
Bonnet also said the proposed environmental plan fails to recognize many of the positive environmental steps already taken by the industry, such as carbon sequestration.
Carrots, not sticks
The trucking industry in Canada remains equally critical of the revised Green Shift.
The revisions do little to make the proposal more attractive to the trucking industry, said Bob Dolyniuk, general manager of the Manitoba Trucking Association in Winnipeg.
The carbon tax would mean an additional cost of roughly $5,000 per year per truck, Dolyniuk calculates. In order to offset that cost through the one per cent tax rebate to be offered on corporate or small business taxes, that truck would need to earn $500,000 a year, a figure which Dolyniuk said is “far-fetched.”
Furthermore, the Canadian trucking industry already pays a federal excise tax on fuel that equates to roughly $288 million annually. The carbon tax would place an additional $500 million annual burden on the industry at a time when trucking companies are already facing increased capital and operational costs, Dolyniuk said.
The $250 million that Dion announced to be set aside for the trucking and fishing sectors to offset those costs sounds impressive — until you start to do the math, Dolyniuk said.
“There would be five sectors (fishing, rail, trucking, marine and air) vying for $250 million over four years. If we break that down, it is $70 million a year that we’re competing for, so in actuality we’re talking about $14 million a year for trucking. What does that really mean for an industry with 10,000 companies and 280,000 trucks? That works out to just $50 per truck,” Dolyniuk said.
He also noted that as far as transportation goes, personal vehicles are the largest contributors to greenhouse gases, yet they are exempt from the carbon tax.
The Green Shift overlooks the demand-driven nature of the trucking industry, which moves roughly 90 per cent of all consumer products and food stuff in Canada, he continued.
The intent of the carbon tax is to change behaviour, but “we don’t drive our trucks around because we want to drive our trucks around, we drive them because people want us to provide a service,” Dolyniuk explained.
The carbon tax is not going to stop trucking but it will mean increased consumer prices as trucking companies pass on their added cost burden, he said.
A better approach would have been the use of carrots rather than sticks, Dolyniuk suggested.
Over the past decade, the trucking industry has been actively upgrading its technology to become more environmentally-friendly, he said. Rebates to assist truckers in purchasing technology meant to reduce greenhouse gas emissions would have been a good first step, according to Dolyniuk.
“When you are looking at small margins like we currently
are, why not use a carrot instead of the stick?” Dolyniuk asked. Rebates and incentives, such as an accelerated capital cost allowance, would go a long way, he said.