By Leah Murray

Shipping companies say prices will increase due to carbon tax

Dec 21, 2016 | 1:44 PM

MEDICINE HAT, AB — Freight and shipping companies in Alberta are bracing for a large hit from the provincial carbon tax, and the costs of the tax will likely be passed on to consumers

The tax is slated to come into effect on January 1. Albertans will be paying more to heat their home, fill their vehicle and even more for food at the grocery store.

Shipping companies in particular are bracing for a large impact to their bottom lines, which will be passed on to their customers.

Rosenau Transport Ltd. ships freight all across western Canada. They have terminals and offices in British Columbia, Alberta, Saskatchewan and Manitoba, including a terminal here in Medicine Hat.

According to Southern Alberta Regional Manager, Dillon Rosenau, the company operates 450 trucks and 1,400 trailers. Next to wages, fuel is their biggest expense.

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“With an industry average of a profit margin of 5 cents on the dollar, we have no choice but to pass along the added expense or risk our ability to really operate,” he said over the phone from Calgary.

Rosenau says that profit margin exists for shipping companies of any size, whether they run one truck or 450.

Grimshaw Trucking is another company which says it will be impacted by the carbon tax. The released a statement on their website, saying it will be charging customers a surcharge equal to the carbon tax.

“Unfortunately all of the [fuel] increases will adversely affect the transportation industry and will have an immediate impact on all transportation providers and their customers,” the statement reads.

As far as the cost to the companies. Rosenau said they don’t know for sure exactly what the impact will be financially but it could be upwards of $600,000

“We have rough estimates, we can’t say for certain. Our fuel alone, it’s going to be in the six figures, but until we actually see it on the bottom line we won’t know for sure.”

But it’s not just the cost of fuel for the trucks they are having to worry about. Rosenau said they also operate around 1 million square feet of warehouse space.

“It’s not just the diesel expense that’s going to get us, it’s everything else,” he said. “It’s the power to run the buildings, keep the lights on, that sort of thing as well.”

Lisa Kowalchuk, executive director with the Medicine Hat and District Chamber of Commerce, said the Chamber has not developed an official stance on the carbon tax, buit have heard concerns for its members about how the tax will impact them.

She says the direct costs are easy to calculate, but the indirect costs have business concerned.

“I don’t think we can possibly forsee all of the costs that are going to be passed down through the carbon levy, because obvoislu, business will need to be able to recoup those costs,” she said.

The government has reduced the small business tax one per cent during the last budget.