National Carbon Tax & US Triggers Process Initiates NAFTA Talks

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A discussion paper released today by Environment and Climate Change Minister Catherine McKenna reveals the federal government’s potential strategy for imposing a national minimum price on carbon by the end of 2018 for those provinces that do not have their own system place.

Currently, four provinces – British Columbia, Alberta, Ontario and Quebec – have some form of carbon pricing mechanism, whether that be a carbon tax, a cap and trade system, or, as is the case in Alberta, a combination of the two. The structure announced today by the federal government is similar to the latter.

The remaining provinces, Saskatchewan, Manitoba and the Atlantic provinces currently do not have a carbon pricing system in place.

The Canadian Trucking Alliance says it’s not conceptually opposed to market-based solutions like carbon pricing, contending that since diesel fuel is the second largest operating cost component after labour, the industry already has a built-in rationale to pursue improved fuel economy. It also points to the fact trucking is currently the only freight mode in Canada subject to regulations requiring trucks be equipped with carbon-reduction technologies. A second, even more stringent phase of these regulations has already been published in the Canada Gazette.

With the Canadian government also committed to carbon pricing, the alliance would have preferred a consistent, transparent, revenue-neutral national framework, which would have worked the same way in all provinces. Most importantly, all revenues generated should have been plowed back into industry programs to accelerate investment and early adoption of green, fuel efficient technology.

“However, with each province doing its own thing, the horse is now out of the barn,” says CTA president Stephen Laskowski. “The Pan-Canadian approach has not materialized and this increases the administrative burden on industries like trucking which cross-provincial and international borders.”

CTA believes it’s imperative the federal government allocate revenues from its pricing scheme into an incentive program aimed at accelerating into the marketplace lower carbon technologies, devices, and fuels. Quebec is currently the only province reinvesting in green truck technology. Ontario has indicated intentions to introduce a green truck strategy, but it has not yet been announced.

CTA will be submitting its official comments to the discussion paper by the June 30 deadline.

In other significant policy news, US President Donald Trump today launched the formal process to renegotiate NAFTA. Likely by the end of August Canada will be engaged in discussions critical to the business operations of many CTA members.

As previously reported, CTA is working with the Government of Canada and other trade associations to ensure trucking industry concerns are a part of this complex and important dialogue.

“Today’s announcement doesn’t come as a surprise,” said Laskowski. “The Government of Canada, CTA and other trade associations have all been preparing for this moment.

“This fall, all links of the Canadian supply chain need to band together with government to ensure our economic prosperity is protected. We would also do well to seize this opportunity to address historical border/trade-related issues that will be brought to light in the NAFTA discussions.”