Evidence of meeting #151 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was regard.
A recording is available from Parliament.
9:40 a.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
Exactly.
It's similar to trucking regulations across the country. You have to lift your tires or your axles off the ground in some provinces, and in others..... We're not set up to ship across the country.
9:40 a.m.
President, Canadian Trucking Alliance
There are challenges. There definitely are.
9:40 a.m.
Liberal
9:40 a.m.
Liberal
The Chair Liberal Dan Ruimy
Thank you.
Now we're going to go to Mr. Albas.
You have five minutes, sir.
9:40 a.m.
Dan Albas Central Okanagan—Similkameen—Nicola, CPC
Thank you, Mr. Chair.
Thank you to our witnesses for their expertise and for helping us in the study of this important area.
I'd like to start with the Canadian Trucking Alliance.
Sir, you mentioned, in your initial testimony, the discussion around the federal trucking registry for the carbon tax.
I'm very concerned because, obviously, your industry spans east-west, but in my area, if I'm speaking to local truckers, a lot of their business involves north-south trucking, so there are going to be a lot of concerns around competitiveness.
Can you please, maybe, just tell us a little bit more about the federal registry for the carbon tax and what some of the concerns are around double taxation and competitiveness?
9:40 a.m.
President, Canadian Trucking Alliance
The issue here is that we will now have a carbon tax in Canada for the trucking industry, starting April 1. It will vary, depending on whether a province has a carbon tax in place or not. It gets further complicated as the years go on because there is a set schedule over the next four years for the carbon tax to increase. If the provinces that have a carbon tax do not increase their tax to the federal level, they will become what's called a “backstop jurisdiction”. Those that don't have a carbon tax will remain a backstop jurisdiction.
The registry is meant to.... It is less complicated starting out, and it becomes further complicated as the years go on and the tax rates vary. Currently, the trucking industry has a system in place that's referred to as IFTA, the International Fuel Tax Agreement. It is an agreement between provinces and states to collect tax, fuel tax. It's automated. You tell where you run, you have your mile numbers, and it's distributed. One check, and it's done. Nobody likes to pay taxes, but obviously, fuel tax is going to roads. Roads help the economy grow. It's a good thing.
Our concern with regard to the federal registry is that it's not as seamless as IFTA. We have concerns about the ability of carriers to track this. We also have concerns about—to my earlier point—a level playing field. The CRA has assured the CTA that it will enforce this and ensure that everyone pays it, including U.S. carriers. We will see what happens.
9:40 a.m.
Central Okanagan—Similkameen—Nicola, CPC
Just on a separate note.... It must grind some of your members' gears that in backstop jurisdictions such as Ontario and Saskatchewan, come April 1, they're going to be among the most heavily carbon-emitting industries because of the use of diesel. They will be paying proportionally more than, let's say, some other industries, and 90% of that has already been buttonholed to go directly to consumers.
Is that an issue?
9:40 a.m.
President, Canadian Trucking Alliance
Overall, just so that everyone understands, we are the only freight industry, transportation-wise, that's regulated for carbon emissions, so all of our equipment is currently regulated for carbon emissions. We've had a first round; we have a second round coming. We've supported that issue.
Our concern with the carbon tax, to the point someone asked me earlier about local carbon fuels, is that if we price a commodity that we don't have an alternative to shift from, it goes to the point of what the purpose of the public policy is. In our case, one would say that we need be more fuel-efficient. Fuel is either the first or the second leading cost for a trucking company, so fleets are vigilant about fuel consumption. With regard to carbon emissions from trucks, it's all related to fuel efficiency.
The one ask our industry does have is that if we are going to be taxed on the fuel and we don't have a policy alternative, and we already are paying higher prices for equipment based on carbon pricing, we'd like to see that money come back to us in terms of an incentive program to once again reinvest in our equipment to gain even more fuel efficiency.
9:45 a.m.
Central Okanagan—Similkameen—Nicola, CPC
Again, if 90% is already slated to go to consumers in terms of rebates, that makes it very difficult for any industry to be able to collect theirs back.
Going back to the federal trucking registry for the carbon tax, it sounds to me that there's going to be significant overlap between the existing registry for the United States and Canada, which seems to work rather well. I guess we'll see if this new registry works well. We've had a bit of an issue in Canada about new registries and their initial costs.
What are some specific concerns about the implementation of that? Is it going to be electronic? Is it a single window? Is there paperwork associated with it? Is it integrated into the existing operations?
9:45 a.m.
President, Canadian Trucking Alliance
The answer to that question is that I know some of those answers, but not all of them. There are some concerns about the registry from the carrier community in terms of how they interact with the CRA at this point. We have a month to launch, so we are hoping things will be dealt with.
9:45 a.m.
President, Canadian Trucking Alliance
We know there are some concerns about the registry.
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Liberal
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Liberal
Terry Sheehan Liberal Sault Ste. Marie, ON
Thank you to the three of you for your testimony on this important matter.
I'll keep going with Stephen.
My family is in the trucking industry too. I have cousins up in northern Ontario and Elk Lake, the Fisets, who have been trucking for years. I used to work for them when I was younger. And my best friend in Sault Ste. Marie, where I'm from, owns the Steel City Truck Lines.
It's an important industry, and I really appreciated your observations, in particular about the fall economic statement and being able to accelerate and write off the depreciation of equipment. I really didn't think about that until you mentioned it. Even as just consumers of equipment ourselves, we know how much and how quickly it depreciates.
Do you have any stats or have you crunched the numbers on what the potential savings or investment would be to the trucking industry for that particular one?
Also, I was reading some other news about what some in the trucking industry were talking about in relation to the fall economic statement, including removing barriers to trade within Canada and moving goods to markets efficiently in Saskatchewan and British Columbia. Those were the two pieces of investment: $160 million for ports and rail infrastructure in Vancouver to increase the efficiency and capacity for trade; and the $53.3 million to upgrade Highways 6 and 39 between Regina and Estevan, near the United States border.
Do you have any further comments on that?
9:45 a.m.
President, Canadian Trucking Alliance
Sure. I have them all in my speech, and I had to look over them.
In terms of your first question, if the company bought five trucks at about $1 million each.... I want to put a big asterisk here: this doesn't downplay it, but assumes that the company is profitable. That's always an important reminder, because my members would say, “Hey, well, we have to make money to get this.”
At $1 million for five trucks, which would be about right for the overturn of a smaller company, typically, right now, it would be $200,000. Under the new system it's $600,000, so that's significant. It's very significant. If you just scale that down to a one- or two-truck operator, it's very important, yes.
Obviously the railhead investment at the port of Vancouver is important to the members of the B.C. Trucking Association. A number of them use that port, with all the freight coming in. The Regina investment was also important, as is any investment. When Minister Garneau made an announcement a couple of years ago that a different lens would be brought to infrastructure investment with regard to return on investment and funds, that was a very positive change in direction.
Our members like to see announcements like this. We pay a lot in fuel tax and registration, and we have an expectation for investment back into the highway infrastructure. You can't fix everything, but it makes sense to identify the bottlenecks and the problem areas. There's a return on investment for the Canadian economy. If a truck moves more efficiently—whether it's into a port or across the border or across a bridge—and the prosciutto can get across the bridge, it's good for business all around.
9:50 a.m.
Liberal
Terry Sheehan Liberal Sault Ste. Marie, ON
I agree with that.
In Sault Ste. Marie we just finished the construction of the new bridge plaza, a $53-million project. We have a lot of traffic. You've got the I-75 and you have 17. We are one of the largest and most important ports of entry in Canada, because it takes a long time to go around.
On that same note, in our northern Ontario Liberal caucus, Marc Serré, the parliamentary secretary for rural development, is here today. We've been talking about the need to twin highway 17 between Manitoba and, of course, Québec. That's one of the longest stretches of road.
Do you have a comment?
9:50 a.m.
President, Canadian Trucking Alliance
It's an important project. You hit the nail on the head: It's a long stretch of road. I have not seen the latest estimates for that. It is an important stretch of road. From an economic standpoint beyond public safety, again, I opened up the presentation with highway 185 from Québec. It's that same trucking configuration between the Maritimes and Ontario, by twinning 185.
If you twin the northern highway, it would be a monumental economic boon. The trucks that are not allowed on single-lane highways and cannot come from western to eastern Canada would now be able to. Twinning it opens up a huge opportunity between west and east. Basically, you get two trucks for one; they're double-trailer combinations that are now allowed on those roads. Those double-trailer combinations dominate trade in western Canada, but they stop at the Manitoba border because of that issue. There's a huge safety benefit. The economic benefits are there for twinning it.
February 26th, 2019 / 9:50 a.m.
Central Okanagan—Similkameen—Nicola, CPC
Going back to the Canadian Trucking Alliance, again, there's a lot of integration between Canada and the United States. There are a lot of trucking companies that operate in the United States; they come to Canada and vice versa.
What are some of the competitiveness differences when you have no carbon tax in the United States? Are we going to be seeing trucking companies just simply filling up right on the border and then coming into Canada, where maybe before they would fill up on the Canadian side? What are the kinds of distortions that may happen there?
9:50 a.m.
President, Canadian Trucking Alliance
That could be a potential distortion, but the registry, if it is implemented and enforced—and the key is enforced—should capture that. The overall question is will we have an issue of competitiveness as the carbon tax becomes further implemented and phased in more and more? Ultimately, it gets to around 14¢ a litre. That's a challenge. That will be a challenge in the north-south corridors.
9:50 a.m.
Central Okanagan—Similkameen—Nicola, CPC
Will the United States trucking firms be forced to use the federal trucking registry for the carbon tax?
9:50 a.m.
Central Okanagan—Similkameen—Nicola, CPC
That's interesting, okay.
What about Canadian companies that operate in the United States. Will they be filling up on the U.S. side? Will that exempt them from having to pay it, or is that somehow part of the federal trucking registry?
9:50 a.m.
President, Canadian Trucking Alliance
The tax is consumed not at point of purchase, but where you travel. The accuracy of the reporting needs to be in place.
It goes back to the general question when we opened our dialogue. I'm not trying to evade the question. If the law is applied to everyone, then the law is the law and the costs are the costs borne by us all. But if there is not level-playing-field enforcement and an assurance of level-playing-field enforcement, then we have a challenge.