No breaks on carbon tax

Federal Liberals say smaller businesses will get financial help to adapt but no pass

OTTAWA — The federal government expects to spend nearly $1.5 billion helping small and medium-sized businesses adapt to carbon pricing over the next five years — but it will not exempt them from the new carbon tax regime.

Environment Minister Catherine McKenna says the government is no longer allowing anyone in Canada to pollute for free but that there will be supports to help small businesses adapt by making their operations more energy efficient. Pollution is already costing us money, said McKenna, as costs from climate-change-related weather events has soared to more than $1 billion a year in Canada.

But Conservative MPs produced a list of companies on Friday that say they will be harmed by a carbon levy in what is becoming a repeat of last year’s fight over the effect of proposed tax changes on small businesses.

Conservative finance critic Pierre Poilievre said wealthy corporations are getting a “sweetheart deal” compared to small business owners when it comes to the carbon tax.

One of the companies on the list was Bert Baxter Transport Ltd., in Estevan, Sask.

Darryl Shirley, the company’s owner, said the funding isn’t going to help his business. The company, which has about 60 trucks on the road at the moment, and employs about 80 people, uses more than four million litres of diesel a year.

At $20 a tonne, the price of diesel goes up about 5.5 cents a litre, adding more than $221,000 to Shirley’s fuel costs. In 2022, when it rises to $50 a tonne, or 13.7 cents on a litre of diesel, the bill will rise to $554,171.

Shirley said small trucking companies will go under because it is difficult to stay competitive if they have to raise their rates. He said he already raised his rates two per cent to counter the Alberta carbon price, and will have to hike it even more once Saskatchewan’s is imposed.

While the government hopes the carbon levy is an incentive for companies to pay for innovations that lower their energy costs, Shirley said electric trucks are not an immediate option because the charging infrastructure is not there.

His company already paid to add systems to their trucks that help burn diesel more cleanly, but he said it actually takes more diesel to run those systems.

Small and medium-sized businesses will pay the carbon price on their energy input costs — $20 a tonne in 2019, rising by $10 a year until it hits $50 a tonne in 2022. Big industrial emitters are exempt from paying it on the energy they consume. Instead, the government has set an emissions cap, based on 80 to 90 per cent of the average emissions in a specific industrial sector. Big companies will pay the tax only on their emissions above that cap.