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Sunday, June 23, 2024

New Budget Has Huge Impact on Newfoundland & Labrador Trucking Companies

The recent Newfoundland & Labrador budget announcement has many tax increases and some will have a significant impact on the trucking industry. The 5-cents/litre diesel tax increase combined with the 15% sales tax on insurance premiums and not to mention the fee increases on licenses and permits will have serious implications on trucking companies’ bottom line. Carriers domiciled in Newfoundland & Labrador will be the worst hit obviously and will put them in a competitive disadvantage as well.

Jean-Marc Picard, Executive Director of the Atlantic Provinces Trucking Association says, “This has definitely caught the industry off guard and will cost Newfoundland & Labrador trucking companies thousands of dollars in extra costs”. It’s unfortunate, but consumers will end up bearing most of these costs. “Our industry cannot sustain these additional costs, some of them will have to be passed down to customers and ultimately, consumers will end up paying more for their goods.” Picard adds.

We understand the province is in a very difficult financial situation but a 5-cents/litre increase on diesel tax is very steep. It puts Newfoundland and Labrador at the highest in the country along with New Brunswick at 21.5 cents/litre for diesel tax.

This is not the ideal scenario since residents of Newfoundlander & Labrador traditionally pay more for their goods because of the ferry services that bring goods on the Island. Along with the HST and permit increases, the cost of goods might be worse than expected for the residents.

The APTA says it was never consulted on the potential impact these changes would have on the trucking industry and feels that they should have been. Trucking is a very important part of the economy in Newfoundland & Labrador and is a crucial part of the supply chain that brings goods to the province.

Picard adds “The trucking industry is going to feel the effects of these costs increase for a long time and likely puts some companies at risk of shutting down.”