Big emitters get a pass on carbon

Opinion

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This article was published 22/08/2018 (2578 days ago), so information in it may no longer be current.

The carbon tax must be making Manitoba truckers feel like they’re getting pulled over and fined, even though they’re just doing their jobs, while corporate types race by and get a friendly wave from government.

The unfairness of a carbon tax is becoming clear. Families are wondering why they’ll be punished for filling up their run-of-the-mill minivans when hybrid equivalents are unaffordable at twice the price. Small businesses are wondering why they’ll be pushed for heating with natural gas when Manitoba Hydro’s electricity rates are rising indefinitely. But truckers provide a particularly poignant example of unfairness.

Manitoba’s carbon tax will make the price of diesel jump by 6.7 cents per litre. It’ll cost people using heavy diesel vehicles, primarily truckers, over $50 million every year, according to the Manitoba Trucking Association. That’s about 20 per cent of the total amount the province plans to collect through the tax. Yet heavy diesel vehicles are only responsible for 10.9 per cent of Manitoba’s emissions, according to the MTA.

And here’s the part that could provoke the most patient trucker to profanity: Manitoba’s biggest carbon emitters are getting a special deal.

Instead of paying the carbon tax, Koch Fertilizer and five other big emitters can choose to pay for credits if their emissions rise above certain benchmarks. While the Manitoba government will hit everyone else later this year, big emitters will be off the hook until some time in the middle of next year.

There are a lot of unknowns about this special deal. Where will the government set the benchmarks? How much will the credits cost? Will big emitters actually reduce emissions?

Here’s what we know for sure: big emitters will pay less.

The reason for the special deal is obvious. If the government raises the cost of production, but that cost can’t be passed on to customers in global markets, big emitters will shift production and emissions to other jurisdictions. That would hurt the Manitoba economy without helping the environment.

It’s a familiar refrain for Manitoba farmers. Making the cost of production higher in Manitoba won’t reduce global emissions, but it will give a competitive advantage to farmers in North Dakota. Farmers got a special deal: they won’t pay carbon taxes for on-farm diesel, but they’ll still get hit for running their grain driers, applying fertilizer and shipping their crops to market.

So what’s wrong with truckers? Why aren’t they getting a special deal?

The government will say truckers don’t deserve a special deal because they don’t compete on global markets. In other words, truckers can just stick customers with the bill. Plus, they’ll claim a carbon tax will force truckers to get more efficient.

Truckers may find that explanation hard to swallow.

They surely will pass some of the carbon tax cost on to Manitobans, but not all of it. So truckers will be poorer. Manitobans will also pay more for everything shipped by truck.

It’s also hard to see how a punishing carbon tax will drive efficiency. Truckers already pay hundreds of dollars every time they fill up, so they’re already working hard to save fuel. Engine manufacturers such as Cummings and Volvo won’t speed up R&D just because there’s a carbon tax in Manitoba or even Canada. In fact, a carbon tax will leave truckers with less to invest in existing efficiency upgrades.

But if the government gives truckers a special deal, who’s next? Manitoba outfitters compete for global tourism dollars and can’t run their remote hunting and fishing camps without diesel generators — don’t they deserve a special deal? What about families who need minivans to get their kids to school?

There is a fundamental unfairness creeping into Manitoba’s carbon tax policy. The province’s biggest emitters are getting a special deal while families, truckers and others take it on the chin. It’s time for Premier Brian Pallister to acknowledge that his carbon tax is fatally flawed.

Todd MacKay is prairie director of the Canadian Taxpayers Federation.