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Carbon tax creates tension for B.C. taxi and trucking industry
By Lucy-Claire Saunders
British Columbia’s taxi and trucking industry is bracing itself for higher prices at the pump as Finance Minister Carole Taylor’s green tax debuts this summer.
The B.C. Taxi Association, an organization representing over 150 companies, will meet this week to discuss the tax’s effects on taxi operations, according to president Manmohan Sing Kang.
“Raising fuel rates always hurt the industry because we are the biggest consumers,” he said, on his way to Victoria to review the tax.
A new carbon tax, effective July 1, will add 2.4 cents to a litre of gasoline, rising in equal increments to 7.2 cents in 2012.
The carbon tax will apply to all fossil fuels — gasoline, natural gas, propane, coal and diesel — which will also increase home heating costs.
Khan Hafiz, manager of Richmond Taxi says his company preempted the government by raising fare prices on Jan 1. Fuel prices, which were already costly, and Metro Vancouver’ notoriously high cost of living pushed Hafiz to steepen his fares by 2.27 per cent. B.C.’s trucking industry is also expected to feel the carbon tax crunch, according to B.C. Trucking Association president, Paul Landry.
“Carbon taxes may have a role to play in encouraging the reduction of greenhouse gases in some sectors and amongst consumers, but the trucking industry has no choice but to rely on diesel fuel to keep the economy moving,” Landry said.
This year, diesel fuel for long haul trucks will cost $1,000, about $3,000 in 2009, and $6,000 in 2012. Because of the tax, diesel prices will be three times higher in B.C. than in Alberta and almost twice as much than in other provinces.
The higher costs will be passed on to manufacturers, retailers and resource sectors, which need trucking transportation services.
Trucks haul about 90 per cent of Canada’s consumer products and two-thirds of the country’s trade with the U.S. B.C. trucks handle $37 million in trade alone.
The carbon tax, which will raise $1.8-billion by 2011, will be revenue-neutral. The higher taxes will be offset by tax cuts to individuals and business.
In July, B.C. residents will get a one-off $100 climate action dividend, amounting to some $400 million over the next three years. But businesses that consume a lot of gas, like the trucking industry and B.C. Ferries, will not qualify for the $100 kickbacks. Low-income families will get a climate action credit of $100 per adult and $30 per child, to be paid out quarterly.
Victoria is also spending $1 billion on climate-change programs and incentives.
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