Canadian Trucking Alliance calls for suspension of carbon tax on diesel and excise tax relief in pre-budget submission

The Canadian Trucking Alliance (CTA) has put forward a series of recommendations in its 2025 pre-budget submission aimed at fostering a greener trucking industry while advocating for a fairer tax and regulatory system. The CTA is urging the Canadian government to reconsider the application of the carbon tax on diesel and to provide excise tax relief for certain emission-reducing technologies.

Stephen Laskowski, CTA President, stated, « The trucking industry must be part of the solution in achieving a carbon-neutral transportation sector. However, it is crucial that government policies and regulations recognize the current technological limitations within the heavy transport industry. The path toward zero-emission engines is a long one, and government support is necessary for the sector to continue its efforts in reducing its carbon footprint. »

As part of this submission, the CTA is asking Ottawa to incorporate the following environmental measures in the Fall 2025 Budget:

– Reinstate the federal excise tax (FET) refund for Trucking Idle-Reduction Technology (TIRT), which the industry uses to reduce fuel consumption.

– Reverse the removal of excise tax refunds for fuel consumed by Power Take-Off (PTO) units.

– Implement a tax exemption for fuel-saving technologies.

– Provide greater support for risk-free testing of green and emerging technologies in real-world conditions.

– Suspend the carbon tax on diesel for at least four years**. With no viable alternative available, this tax currently offers no tangible environmental benefits.

– Work with the Quebec government and the Quebec Trucking Association to resolve the issue of double taxation between federal and provincial carbon pricing systems.

The carbon tax remains the primary point of contention, which the CTA argues is needlessly penalizing the industry. « Despite the efforts and investments by suppliers and carriers, the trucking industry currently lacks viable zero-emission engine technology. The carbon tax on diesel fuel is having no positive impact on the environment and is only serving to unnecessarily increase costs for Canadian families and businesses, » Laskowski explained.

The CTA estimates that the carbon tax of 17.4 cents per liter results in additional fuel costs for a long-haul truck operator of between $15,000 and $20,000 per year, per truck. This additional fuel cost represents about 6% of a truck’s total operating cost. This burden affects small, mid-size, and large fleets alike, worsening an already challenging situation in a market where an increasing number of carriers are relying on the spot market for freight.