Diesel Prices Rise, Carbon Tax Questions Remain

TORONTO, Ont. — Federal carbon taxes were tacked onto fuel prices in four provinces April 1 – and they came with the threat of a $2,000 fine for affected carriers who failed to register with the Canada Revenue Agency.

As the prices roll forward, however, many questions remain about the reporting structure, an underlying rebate program, and even whether the tax will apply to reefer fuel.

“It’s an absolute nightmare,” said Terry Shaw, executive director of the Manitoba Trucking Association. “How do we utilize that carbon tax so we can actually become more efficient as opposed to it being a revenue distribution scheme?”

The federal tax is now applied in Manitoba, Saskatchewan, Ontario and New Brunswick, all of which have failed to meet federal benchmarks for carbon pricing. Other provinces have introduced programs of their own, while Nunavut and Yukon have opted for the federal pricing mechanism that takes effect July 1.

Ontario estimates the carbon tax will increase diesel prices in its jurisdiction by 5.37 cents per liter this year and 13.41 cents by 2022.