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National Defence doesn’t know impact of carbon tax on fuel costs

The Department of National Defence hasn’t yet measured how much more it will be paying for fuel under the federal carbon tax.

The military spends around $200 million on fuel per year.

In response to an order-paper question in mid-December, National Defence parliamentary secretary Serge Cormier said the department “is in the process of determining the broad implications of the price on carbon pollution.” A spokesperson from the department confirmed today it hasn’t yet decided how it will assess these costs.

National Defence doesn’t know impact of carbon tax on fuel costs
By Charlie Pinkerton. Published on Jan 16, 2019 6:52pm

The Canadian Armed Forces uses different types of fuel to run its vehicles, aircraft and naval vessels, and for heating, cooking and generating power. While costs follow the ebb and flow of fuel prices in Canada, the military has spent over $183 million in each of the last five years. The highest total was in 2014, when it spent $246 million. Last year, the total came to $195 million.

Since it buys fuel in Canada and abroad, it won’t have to pay a tax on all purchases.

The exact costs will vary by province or territory, but the federal government’s fuel charge will be $20 per tonne of carbon emissions in 2019, increasing by $10 per tonne each year until it reaches $50 per tonne in 2022. For a tank of gas, the tax is expected to add 4.4 cents per litre in 2019 and 11 cents per litre in 2022.

The federal government says 90 per cent of what it collects will be returned directly to Canadians, which will amount to about $300 per Ontario household, what the government estimates more than 70 per cent of Canadian households will pay.

National Defence will eventually have to determine the impact of the carbon tax on its operations and maintenance budget.

In its response to Conservative MP Karen Vecchio’s order-paper question, the military declined to say how much it expects the price on carbon will cost the department in each of the next five years. It says costs “are not tracked or forecast,” and it couldn’t formulate a response in the time allowed. This is typical for order-paper questions, since the government is required to respond in 45 days.

According to the Liberals’ new defence policy, they plan to invest $225 million in infrastructure projects by 2020.

Cormier’s response echoes another commitment of Canada’s “Strong, Secure, Engaged” defence policy, in that the Armed Forces will transition 20 per cent of their non-military fleet to hybrid or electric vehicles by next year.