CTA unhappy with Environment Minister’s comments

by Canadian Shipper

The Canadian Trucking Alliance has responded to comments made by federal environment minister, David Anderson, which raise the prospect of increased federal excise taxes on fuel.

The minister was recently quoted suggesting that raising the excise taxes on fuel to reduce consumption and emissions should be analyzed and that the debate over whether taxes should be increased has been stymied by special interest groups.

CTA’s CEO, David Bradley, rejects the assertions and reminds the minister that the various committees and task forces that CTA has participated on in recent years that looked at this included all manner of non-business groups, including environmentalists, governments, etc.

“I doubt the average taxpayer wants to see higher fuel taxes any more than businesses do,” Bradley says.

With regard to the minister’s contention that more analysis is needed, Bradley wonders if perhaps it’s just that the analysis to date hasn’t provided (the minister) with the justification he wants to raise taxes.

He points to the 1998 Report of the Technical Committee on Business Taxation, prepared for then finance minister, Paul Martin, which stated: The existing federal fuel excise tax is not the best instrument for pursuing environmental objectives. The tax base is not closely related to the causes of urban air pollution; neither is the tax base well designed from the perspective of climate change it would be appropriate to consider broader based taxes on pollutants from a wide variety of sources the excise tax restructured in this manner would lower the federal rate on motive fuels (and) would level the playing field among major energy sources (to) help to ensure that the costs of goods and services produced by using these sources would better reflect actual environmental costs.

Reports also have Anderson asking if people believe the split between what they pay in excise taxes and what they pay in income taxes is appropriate, inferring that it would be better if people paid more excise tax and less income tax.

“Since there is only one taxpayer, I suppose at the end of the day it matters less to an individual how he pays tax, so long as he does not pay more in combined tax. Regardless, I find it hard to fathom how replacing a progressive income tax with a regressive excise tax) would be a good thing,” Bradley adds.

Bradley also questions what good higher fuel taxes would do when the federal government has already introduced regulations on truck diesel fuel and engine emissions that will effectively eliminate smog-related emissions from new engines starting with the 2007 model year. “These improvements will not come without increased costs, “he says. And, “since fuel is the first or second leading operating cost for trucking companies, there is a natural, market-driven and constant reason for maximizing fuel efficiency.” Instead, he says governments should be looking at incentives to accelerate the penetration of the new equipment into the marketplace through such measures as accelerating Canada’s out-of-date capital cost allowance on truck tractors.

Have your say

We won't publish or share your data