(OTTAWA) – April 03, 2019 – A new report by the Canadian Chamber of Commerce, Check Engine Light: Climate Policy Overheats Transportation Costs in Canada, is Canada’s first attempt to measure the true costs to Canadian businesses of layered climate regulation.
As smaller, family-owned businesses, companies in Canada’s road transportation sector are highly exposed to climate policy duplication.
“Canada is enormous, and the year-round movement of goods and people is critical to our economy. Yet the government’s approach to climate policy means that transportation businesses are now charged twice for each greenhouse gas emission -- once under the Carbon Price and once under the Clean Fuel Standard. This double-dipping will take more than $4 billion from the pockets of these smaller businesses in 2019 alone. That’s an unbearable cost for any sector,” said the Honourable Perrin Beatty, President and CEO of Canadian Chamber of Commerce.
The federal government promised that its approach to climate policy would be market-based and revenue neutral. Unfortunately, the instruments it has chosen will create multiple layers of costs and regulatory burden. This pancaking of costs will place severe financial strain on the road transportation sector, and will ultimately have a similar impact on all Canadian businesses. The report outlines four key recommendations for government:
1. Reduce other regulatory costs on businesses to coincide with the increase in carbon price costs
2. Conduct a comprehensive cost-benefit analysis and minimize competitive impacts of the Clean Fuel Standard (CFS)
3. Increase transportation infrastructure investments
4. Lower the regulatory barriers to adopting efficient transportation technologies.
The report reinforces the Chamber’s principle that Canada’s GHG reductions strategy must balance the environment, the economy and affordability. For example, a trucking business in New Brunswick currently pays almost $37,000 in fuel taxes per year for an average long haul truck consuming 88,000 litres. This business will now be looking at an additional $15,000 per year by 2025 through the duplication of the Carbon Price and CFS, an increase of 33% in operating costs. This figure is untenable for a sector that is largely comprised of small- to medium-sized businesses with margins of 5% - 6%. The report provides similar examples that show why the government should maximize the regulatory flexibility for the transportation industry to continue reducing emissions.
“The most successful and cost-effective climate policies in the world today tend to be flexible and have a low-cost impact. Canada’s uncoordinated model is evolving into layer-upon-layer of hidden costs that will hold back the Canadian economy and drive up the cost of moving goods and people across national and international supply chains,” said Huzaifa Saeed, Policy Advisor and author of the report.
To download the entire report, click here.
The Canadian Chamber of Commerce is the vital connection between business and the federal government. It helps shape public policy and decision-making to the benefit of businesses, communities and families across Canada with a network of over 450 chambers of commerce and boards of trade, representing 200,000 businesses of all sizes in all sectors of the economy and in all regions. News and information are available at Chamber.caor follow us on Twitter @CdnChamberofCom.
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Senior Director, Strategic Communications and Public Affairs
Canadian Chamber of Commerce