CTA calls for tax breaks to fuel ’07 purchases

OTTAWA — The Canadian government should introduce U.S.-style tax incentives to fan purchases of upcoming, environmentally-friendly truck engines, says the nation’s largest truck carrier group.

Tax incentives may make more expensive, low
pollution trucks more attractive in 2007: CTA

The Canadian trucking industry says it is already ahead of the game in adopting low-emission technology, says the Canadian Trucking Alliance. The group is urging the federal government to introduce tax incentives, such as accelerated depreciation rates similar to those that already exist in the U.S., to accelerate purchases of a new generation of smog-free trucks which hit the market this fall.

By October of this year, diesel fuel used in the trucking industry must contain 97 percent less sulfur (from 500 parts per million to 15 ppm) than current truck diesel. Also, starting this fall all new truck engines must meet strict emission standards. Those engines emit 95 percent lower emissions of particulate matter (PM) this fall and, by 2010, 90 percent less nitrogen oxide (NOx).

However, many North American fleets and owner-ops are either buying current 2006 equipment or planning to buy used trucks in 2007 to avoid having to purchase the new technology. The extra $7,000 to $10,000 attached to each ’07 engine’s price tag, as well as unknown additional maintenance costs, is no doubt discouraging carriers from buying right away.

Furthermore, fuel marketers say the new ultra-low sulfur diesel fuel will cost two-to-three cents more per litre to produce and will contain about one per cent less energy content than existing diesel, requiring them to burn more fuel.

“If cleaner air is the issue, then the federal government should be looking at tax incentives like those other industries obtain, to encourage fleets to turn over their equipment sooner and therefore accelerate the penetration of the smog-free vehicles into the marketplace,” said CTA chief David Bradley, pointing to U.S. carriers who are able to write-down the cost of their trucks more quickly than Canadian carriers, which in turn allows them to re-equip their fleets at a faster pace. “It would make good environmental sense to have the new engines become the predominant engines in service as soon as possible.”