Clarity needed on Ottawa's plan to help small businesses with carbon tax
Rise in fuel prices impacts manufacturing, imports, exports and operations costs
While some New Brunswickers will know what to expect at the gas pumps Monday, small businesses still don't know how the carbon tax will impact their revenue and operations.
Fredericton Chamber of Commerce CEO Krista Ross said some business owners are worried about the impact the new, federally imposed tax will have on the costs of operations.
She said a rise in fuel prices doesn't just increase prices at the pump, but it also makes manufacturing, importing and exporting more expensive.
"We've also heard from businesses in the tourism hospitality industry, wondering about people travelling here with the increased cost of fuel and so on," she said.
On Monday, gas taxes in New Brunswick jumped 4.42 cents a litre. It's the highest increase in Atlantic Canada, because New Brunswick did not come up with an acceptable carbon tax plan of its own. The other three provinces did, so don't have to deal with the federal backstop.
The intention behind the added cost is to "put a tax on pollution," according to Prime Minister Justin Trudeau, and disincentivize people from using non-renewable energy.
Consumers are getting rebates on the carbon tax, and Ross said the federal government has promised $5 million in assistance funds for small and medium businesses as well.
But if there's any information available on how the fund works, neither she nor her counterparts in other parts of the province have seen it.
"We have no information about how this program would work, what it looks like," she said.
On Fredericton's north side, George Youssef stands outside his business, Checker Cab and Deliveries, and wonders what his bottom line is going to look like.
"Well I'm thinking that everything that's delivered, as far as even parts, will probably go up," he said.
Youssef co-owns 45 taxis and employs about 100 drivers.
He said he may need a rate increase to offset the increase in fuel prices.
"I think we're being overtaxed as it is right now, but there's nothing we can do about it so we'll just grin and bear it," he said.
The chamber represents more than 970 businesses, and Ross said about 950 of them employ fewer than 100 people.
All cost, little rebate
The Canadian Federation of Independent Business conducted a survey of businesses in the four provinces, where the federal backstop is implemented — Saskatchewan, Manitoba, Ontario and New Brunswick.
Eighty-seven per cent of small businesses surveyed in those provinces oppose the federal carbon tax plan.
The federation says small businesses, municipalities, universities, school boards and hospitals will contribute almost 50 per cent of the carbon tax revenues but get just seven per cent back in the form of grants and rebates.
In the survey, four out of five businesses said they would be able to pass on less than a quarter of the new costs to consumers.
Busing and trucking
The impact on the trucking industry and Maritime Bus fares are different from taxi companies. Trucks and buses use diesel, and because they travel across provinces, they charge differently.
Diesel prices will rise by about four cents per litre Monday.
Jean-Marc Picard of the Atlantic Trucking Association previously told CBC that New Brunswick is protected somewhat by international agreements that require trucking companies to remit diesel taxes to provinces based on distances driven in each province no matter where they fill up.
Mike Cassidy, president of Maritime Bus Coach Atlantic, said fuel is close to 20 per cent of operating costs, but as they analyze the carbon tax and what's being done by certain provinces, "we do not want to change our prices."
He said diesel prices fluctuate during the year, so the bus company charges a surplus, depending on the price of the day. For every five cents the price goes up at the pump, they add one per cent fuel adjustment for the price of the ticket.
"When the price drops, we remove that fuel price adjustment," he said.
Hoping for clarity
Ross said she hopes for more clarity from the government on how it plans to spend that $5 million to help small businesses deal with the tax increase.
"Up until this implementation our biggest ask was to renegotiate with the province and have a chance for us to come up with a made-in-New Brunswick solution," she said.
"At this point that door is closed."
With files from Robert Jones