Canadian Trucking Alliance concerned about suggestion of new road taxes

by Canadian Shipper

The Canadian Trucking Alliance, which has long fought for upgrades to Canada’s highway system, may be pleased with the emphasis the Canada Transportation Act review panel’s final report placed on the issue but it’s not buying into the panel’s suggestions for achieving that goal.

A key CTA recommendation adopted by the panel dealt with the creation of a national highway infrastructure investment agency, funded through road fuel taxes. CTA however, is concerned by the panel’s recommended use of new taxes to contribute to this fund, specifically the introduction of weight-distance taxes.

"Trucks already currently pay close to half a billion dollars a year in federal excise taxes as well as an additional $1.5 billion in provincial fuel taxes," a release issued by the CTA stated. "Furthermore, the Alliance points out that every heavy truck in Canada also pays taxes to provincial governments based on their gross vehicle weight (GVW). For example, in British Columbia a truck with a GVW of 10,000kg pays $392 in registration fees, while one registered at 50,000kg pays over $3,000 annually."

The Alliance also took exception to it considers the panel’s "one-sided characterization" of full-cost accounting. It argued that by focusing solely on the costs associated with a public good –in this case roads– and overlooking its external benefits, the panel’s use of the notion is "simplistic and dangerously misleading."

Finally, the Alliance noted that while the panel had acknowledged that the fiscal system can be used in the pursuit of environmental policy objectives, it failed to deliver a clear recommendation in that regard. The CTA had proposed the use of accelerated capital cost allowance to encourage and speed up the development and use of cleaner engine technologies.

The CTA, however, was pleased with the panel’s report on the matters of the federal government’s role in
trucking and more federal leadership in securing a truly national safety system.

"CTA was pleased that the panel agreed with its opinion of the problems that plague our current system. Although the Alliance would have liked to see more definitive recommendations on how to address the current problems, the panel’s report is a further reminder to Transport Minister (David) Collenette that at the very least, the existing mechanisms governing extra-provincial carriers need re-evaluation," the CTA release stated.

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