CTA Urges Suspension of Carbon Tax on Diesel, Excise Tax Relief in Pre-Budget Submission

The Canadian Trucking Alliance outlined a path to a greener trucking industry and a fairer tax and policy system in its pre-budget submission for 2025.

"The trucking industry needs to be a part of the solution to a zero-carbon based transportation sector," said CTA president Stephen Laskowski. "The industry is currently spending billions of dollars on technologies to reduce its carbon footprint and we continue this financial commitment towards capital purchases and operational practices designed to reduce carbon. In turn, the Government of Canada policy and regulations must come to the hard realization of the technological limitations for the trucking industry in obtaining this solution and an understanding that the journey towards zero emission engines for the heavy truck industry is a long one."

CTA is urging Ottawa in its latest prebudget submission to implement the following environmental measures in its 2025 Fall Budget:

• Reinstate the federal excise tax (FET) refund for trucking idle-reduction technology (TIRT), which is used by the industry to reduce fuel consumption.

• Reverse the removal of excise tax refunds for fuel consumed by power take-off units (PTOs).

• The Government of Canada implement a tax exemption for fuel saving technology.

• Better support the risk-free testing of green and other emerging technologies in real-world conditions.

• CTA is calling on the federal government to suspend the carbon tax for a minimum of four years on diesel fuel. Currently, no wholly viable alternative exists, and the current tax serves no policy purpose in the sector.
• Quebec carriers have raised the issue of double taxation between federal and provincial carbon pricing systems. CTA strongly encourages the federal government to work with the province of Quebec and the Quebec Trucking Association to find a reasonable solution to this issue.

Of these measures, the single largest policy issue under the environment negatively impacting the trucking industry is the carbon tax.

"Despite supplier and carrier efforts and investments, the trucking industry has no viable zero emission engine technology to deploy currently," explains Laskowski. "The carbon tax on diesel fuel is currently having zero impact on the environment and is only serving to needlessly drive up costs for every good purchased by Canadian families and businesses. The carbon tax needs to be repealed from diesel fuel until viable propulsion alternatives are available for the industry and the Canadian supply chain to choose from."

The Canadian Trucking Alliance estimates the carbon tax of 17.4 cents per litre translates into extra fuel costs for a long-haul truck operator of between $15,000 - $20,000 per year, per truck. This extra fuel cost represents about 6 per cent of a truck's entire operating cost.

This is hurting small, mid-size and large fleets alike. A small business owner with 5 trucks is seeing between $75,000 and $100,000 in extra costs associated with the carbon tax. These situations are made worse by the current market conditions where an increasing number of carriers are relying on the spot market for freight.

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