May 23, 2018

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Manitoba's trucking industry tears province's carbon tax plan as 'lip service'

BORIS MINKEVICH / WINNIPEG FREE PRESS</p><p>Arnold Bros. maintenance service supervisor Gerald Gardy checks some of the aerodynamics-enhancing items on a truck that the company feels help conserve fuel.</p>

BORIS MINKEVICH / WINNIPEG FREE PRESS

Arnold Bros. maintenance service supervisor Gerald Gardy checks some of the aerodynamics-enhancing items on a truck that the company feels help conserve fuel.

The Manitoba trucking industry is in full-fledged revolt over the provincial carbon tax.

It's not because they don't want to pay it they say, but because of the manner in which the province has decided to use those additional revenues – not to encourage business to invest in green technologies but to use the revenue to cut income taxes and reduce the deficit.

Rob Penner, the CEO of Bison Transport, one of the largest in the province with 1,500 trucks on the road across the country, said the province has just "paid lip service" to the industry's concerns.

Now his company is already in the process of licensing vehicles in Ontario where its carbon tax strategy will set aside hundreds of millions of dollars to rebate companies that invest in technologies that will lower their fuel consumption and thereby reduce their greenhouse gas emissions.

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The Manitoba trucking industry is in full-fledged revolt over the provincial carbon tax.

It's not because they don't want to pay it they say, but because of the manner in which the province has decided to use those additional revenues – not to encourage business to invest in green technologies but to use the revenue to cut income taxes and reduce the deficit.

BORIS MINKEVICH / WINNIPEG FREE PRESS</p><p>Gardy inspects aerodynamics of semi-trailer.</p>

BORIS MINKEVICH / WINNIPEG FREE PRESS

Gardy inspects aerodynamics of semi-trailer.

Rob Penner, the CEO of Bison Transport, one of the largest in the province with 1,500 trucks on the road across the country, said the province has just "paid lip service" to the industry's concerns.

Now his company is already in the process of licensing vehicles in Ontario where its carbon tax strategy will set aside hundreds of millions of dollars to rebate companies that invest in technologies that will lower their fuel consumption and thereby reduce their greenhouse gas emissions.

Penner said the company is "absolutely" going to license trucks and grow its fleet in other jurisdictions like Ontario where Bison already has a significant terminal infrastructure.

"We have a sizable order in for Tesla trucks and a few others with new (electric) technologies," Penner said. "We have no intention of putting those jobs or trucks in Manitoba, zero intention."

Although there were plenty of discussions before the provincial budget in March about rebate programs to allow owners of the province's sizable heavy duty truck fleet to invest in technologies to reduce fuel consumption, there were no such programs included in the March budget.

"To suggest that you are going to encourage industry to invest in new technologies by taking money away from them makes absolutely no sense at all," Penner said.

Terry Shaw, executive director of the Manitoba Trucking Association, said, "The discussions were about using the carbon revenues to reduce the carbon footprint. We thought that was the point. But with the budget this year they hung a complete 180 and said, no, we will use this tax to reduce other taxes. It is not revenue neutral which they said it would be."

The MTA's board has elected a special sub-committee to address the issue which Shaw said, to his knowledge, is the first time in the MTA's 86-year history that it's ever taken such action.

That sub-committee is scheduled to meet this week with finance minister Cameron Friesen and sustainable development. minister Rochelle Squires.

Shaw said it appears that carbon revenues have been disconnected from any efficiency programming.

"We want to encourage them to get it back on track," he said. "If they are intending to do something we want them to come out formally and state it."

Heavy duty trucks account for the vast majority of sales of diesel fuel in the province and with the proposed carbon tax coming in at 6.71 cents per litre for diesel gas it means the province will end up collecting about $52 million per year of the carbon tax from the truckers. It is estimated that the trucking industry contributes about 12 per cent of the province's greenhouse gas emissions, but will be expected to pay about 20 per cent of the new tax that's collected.

(The Manitoba government's carbon tax bill has been delayed and is now not expected to be passed until late in the year.)

Brent Arnold, head of corporate development at Arnold Bros. Transport, the family-owned Winnipeg-based company that has more than 260 trucks in its fleet, said it was not unreasonable for the industry to expect some type of incentive to reduce the tax burden through investment, a mechanism that corporations and individuals typically have available to them when it comes to things like income tax.

"It it will definitely affect how we spend our dollars elsewhere," he said. "It will probably mean forfeiting or postponing capital acquisitions like new trucks or new trailers. We recently announced a driver pay increase, something the industry needs to do. But this (carbon tax) is a cause of concern about how it will impact how well we can remunerate our employees."

John Erik Albrechtsen, operations manager at Paul's Hauling, another Winnipeg-based company with a sizable fleet based in the province, said, "The province broke its promise. There was supposed to be a strategy to change behaviour to reduce greenhouse gas emissions. None of this is helping to do that."

There is widespread disdain over the way the tax is being rolled out, including a fairly broad consensus that the loopholes that exist — like foregoing diesel purchases in Manitoba and and instead, buying fuel in Saskatchewan, North Dakota and Ontario — will have further deleterious impact on the provincial economy.

A surprising degree of bad blood now exists and businesses are already making decisions that seem likely to diminish the economic activity in the province.

"It seems like our conversations get brushed off with not much follow up," Penner said. "But we can't sit on our hands or we could miss out on incentives from Ontario. Those Tesla trucks are going somewhere else."

martin.cash@freepress.mb.ca

Read more by Martin Cash.

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Updated on Monday, May 7, 2018 at 7:12 PM CDT: fixing formatting of box

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