Alberta’s Carbon Levy
Over the past two months you may have noticed that the cost to move freight through, originating or destined to Alberta has increased, and here’s why.
On January 1, 2017 the province of Alberta implemented a carbon levy in order to help reduce greenhouse gases that are responsible for climate change. These gases include, transportation and heating fuels such as diesel, gasoline, propane, and natural gas. The idea behind putting a price on carbon is to encourage individuals and businesses residing in Alberta to become more energy efficient in order to reduce their carbon footprint.
The carbon tax added 4.49 cents per liter to gasoline, 1.011 cents to natural gas, 3.08 cents to propane, and unfortunately for our industry, 5.35 cents to diesel. The transportation industry is taking a big hit, and the added cost of this levy is too great for most carriers servicing Alberta to absorb. In order to offset the costs associated with this new tariff, Alberta trucking companies are passing the extra cost on to their customers. Following wages, fuel is a transport company’s biggest expense, and not just to run their fleet, but to keep their offices and warehouses running as well. Cavalier Transportation Services, Grimshaw Trucking, and Hi-Way 9 Group of Companies are just a few carriers that have announced that they have increased their rates by adding a 0.8-1% carbon surcharge to their invoices. As the carbon tax increases from $20/tonne to $30/tonne in 2018, the carbon surcharge rate is sure to follow.
So, what will Alberta’s Carbon Levy cost you?
We have already started to feel the effects of the levy at the pumps, and unfortunately that won’t change anytime soon. This levy impacts all transportation providers, customers, and consumers. When diesel goes up, so does the cost of goods and services, because as you know, everything we have has been in the back of a trailer at some point in time.
For those who ship with Grand Porter, although we won’t be including a carbon surcharge on our invoices, for any shipments that are subject to the Alberta Carbon Levy, the extra costs will be included in our rate. You will not be surprised by any extra lines on our invoices. We take great pride in the relationships we have with our customers and carriers, and we promise to provide both parties with a fair rate through this tough economic time.
At Grand Porter we are committed to frequent communication, and our goal is keep you informed of any changes that impact our industry. For more information on the Alberta Carbon Levy please visit the Government of Alberta’s website.
>> Grand Porter Logistics is a third-party logistics (3PL) company with expertise and resources to successfully coordinate a wide range of freight shipments. Contact us today for a quote.
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