Food truck prices likely to rise as carbon tax boosts food and fuel costs
Bangkok Food Truck says it's already hurting from federally imposed tax
Bangkok Food Truck says the federal carbon tax is already affecting the company's bottom line, and the burden of higher fuel prices and food costs will be passed on to consumers.
New Brunswick was one of four provinces that did not submit a federally acceptable carbon pricing measure, so federal measures kicked in on April 1 that imposed a charge on gasoline and other fossil fuels as well as on industrial polluters.
The federally imposed carbon tax added 4.4 cents to a litre of gas starting April 1. A levy was also imposed on light fuel oil, natural gas and propane.
Adam O'Brien, manager of Bangkok Food Truck, said that in less then a month, increase costs are making it apparent that prices have to rise.
"Everything is shipped on trucks, so that affects how we get things," O'Brien said.
"The nature of our business is even worse. We're on the road all the time, we use propane and gasoline at the same time as well, not to mention gasoline for our generators as well."
The company operates seasonally and just started running one of its three food trucks this week.
"We're going through and re-costing everything to make sure we're being as fair as we possibly can."
O'Brien expects each plate of food to increase between $1 and $1.50. A plate of food from one of the company's trucks costs about $10 now.
Sylvain Charlebois, professor of food distribution policy and director of the agri-food analytics lab at Dalhousie University isn't surprised that food costs are already rising.
"There are going to be two industries which will be heavily influenced or affected by the carbon tax … food processing and food service."
He said both sectors require a lot of energy.
"In fact, I would expect most menu prices to go up over the next little while to allow restaurateurs, managers to absorb the extra cost generated by the carbon tax."
But while consumers may notice they're paying more while dining in or out now, this may not always be the case, Charlebois said.
"What we saw in other provinces where carbon tax was implemented years ago is that there were little bumps here and there, but overall things did stabilize over time."
Charlebois said British Columbia implemented a carbon tax in 2008, and the province is no worse off.
"Food inflation rates over 11 years are somewhat similar to the general or national inflation rate. BC was not an outlier, in any way."
Charlebois said anything that requires transportation within the country will reflect the changes, but when food is coming from outside Canada's borders, it's a different story.
"Unfortunately, if you are importing food from abroad these companies are not necessarily feeling the effects of the carbon tax, so it gives a bit of an advantage to imported foods. unfortunately for producers here right in our own backyard."
O'Brien said it's unfortunate that customers will bear the brunt of higher food and fuel costs, but someone has to eat the extra cost.
"We don't want to raise the prices," he said. "We don't want to do that, but unfortunately, dollars and cents, we have to make a profit, so we can keep our staff employed."