Source: Canadian Trucking Alliance (CTA).
The 25 percent tariffs announced last night by US President Trump will devastate a trucking industry already suffering from the worst freight economy in 40 years.
“Widespread tariffs on our customers’ freight to US suppliers and consumers will have shocking effects on our membership and the overall supply chain. The longer these tariffs are applied, the more strain there will be on carriers, which will lead to job losses and permanent closures of fleets,” said Stephen Laskowski, CEO and president of the Canadian Trucking Alliance (CTA).
Trucking moves most (70 percent by value) of Canada-US trade. In March 2024, the total value of Canada-US trade moved by all four transport modes totaled $77 billion.
In recent fleet surveys conducted by various trucking associations, carriers across Canada report that customers have already begun canceling orders in the weeks leading up to the tariffs, with declines ranging from 20 to 80 percent at some businesses in certain provinces.
As a result, carriers have already started laying off employees. In Ontario, for instance, as many as one in three fleets surveyed indicated layoffs—a number that is expected to grow in the aftermath of the tariffs.
CTA is calling on the Government of Canada to immediately implement achievable temporary relief for the trucking industry:
• Announce the immediate removal of the carbon tax, especially on the eve of another scheduled increase on April 1.
• Along with suspending the carbon tax, reduce or eliminate the federal excise tax on diesel—a tax that serves no useful policy purpose.
• Develop a trucking tax relief program through the Council of Ministers, which includes the premiers and prime minister, covering measures such as on-road provincial diesel fuel taxes, provincial trucking industry fees, and government procurement practices.
• Increase on-road meal allowance deductibility to 100 percent for truck drivers facing reduced demand for their services.
• Ensure that any relief packages, including work-sharing programs, are strictly available to payroll employees or independent contractors who have voluntarily opted into EI, preventing abuse by the underground economy and carriers violating labor and tax laws, as seen during the COVID wage subsidy programs.
The removal of the carbon tax alone would save a trucking company between $15,000 and $20,000 per truck per year. Small business owners with five trucks are facing $75,000 to $100,000 in extra costs due to the carbon tax. These financial pressures are exacerbated by current market conditions, where more carriers are forced to rely on the spot market for freight.
“We need an immediate short-term relief package that starts with tax measures, but we also need long-term planning to improve our productivity and efficiency,” Laskowski added. “The interprovincial trade barrier pilot is an excellent start, but with these tariffs in place, we must expedite all possible solutions to enhance the competitiveness of our sector right now.”