MAKING YOUR MILES COUNT Robert D. Scheper
These are Taxing Times! There have been TAX changes. In some parts of Canada, the changes seem more dramatic than those in the rest. The Carbon Tax… I mean Fuel Charge, is calculated nearly identically to the formula by the International Fuel Tax Association (IFTA) that has been in operation for decades. The idea for the Fuel Charge must have come directly from the federal department of redundancy department. In my second book: Choosing a Trucking Company, I spent nearly a third of the book talking about fuel costs for operators. The section has a whole chapter on fuel taxes. Many drivers still misunderstand IFTA. Too many think that fueling up in many different locations will save them money. They just do not understand. It’s a fleet consumption rate per mile (flat) that is charged to Carriers for their fleet movements. In my book, while discussing IFTA in the context of Carrier contracts, I introduced an option where Carriers could pay each operator (or credit) the entire fuel tax costs. It would be the best system to figure out actual operator running costs. Fuel tax is charged by the mile. It’s the same way Carriers charge shippers/receivers by the mile. It can be easily separated and calculated in all rates charged to shippers (usually not done) and to independent operators on the fleet (already done in many carriers). Fuel taxes shown on
8 • OVER THE ROAD
invoices probably wouldn’t be popular since government and people often don’t like to physically see taxes on their bills, but it could easily be done. Fuel tax should not even have to be seen by independent operators unless they also openly get reimbursed for it at the same time. So also, the Carbon Tax… Fuel Charge (from the Greenhouse Gas Pollution Pricing Act) can be physically calculated and displayed on invoices (not that that would happen). Fuel Charge should therefore be a cost charged directly to shippers but NOT a net cost to the independent operator. It is a flat tax based on miles traveled in the process of moving freight from point A to point B. The Fuel charge is a direct tax (cost) to freight transportation in Canada. This cost must be absorbed by the customer (shipper/receiver). In no way should an operator be consuming it. If calculations and deductions are made off an independent operator’s statement, it should be accompanied by an equal to or greater than increase in the rate per mile on their contract. The best contracts will not even calculate them on independent operator’s settlement statements… it is a Carrier cost. CRA (who administers the Fuel Charge and its Registration) has sent many letters to independent operators who work for Carriers
MAY 2021
