Response to Government Consultation on Budget 2023
The Honorable Chrystia Freeland
Deputy Prime Minister and Minister of Finance
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario K1A 0G5
email: chrystia.freeland@fin.gc.ca
Subject: Response to Government consultation on Budget 2023
Honorable Chrystia Freeland,
As a clean technology manufacturer and supplier in Canada's trucking industry, Hydra Energy Canada appreciates the opportunity to provide input regarding the Government's consultation on Budget 2023, specifically focusing on the proposed Investment Tax Credit for Clean Technology Manufacturing and the Income Tax Reduction for Zero-Emission Technology Manufacturers.
Currently, both proposed measures exclusively target zero-emission vehicle (ZEV) manufacturers, leaving out low-emission vehicle (LEV) manufacturers that offer readily available transitional technologies. These technologies play a crucial role in reducing barriers to the adoption of zero-emission vehicles.
We echo the sentiments of the medium and heavy trucking industry in British Columbia and Alberta, where we currently operate, and strongly recommend that the federal government extend support to low-emissions vehicle (LEV) transitional technologies. These technologies can promptly decarbonize hard-to-abate sectors, such as heavy-duty commercial transportation, and bridge the gap in availability of zero-emission technology.
As you are aware, zero-emission vehicles (ZEVs) are not currently commercially viable for medium and heavy-duty vehicles with long or intensive duty cycles. Cost estimates indicate that once available, these vehicles will be prohibitively expensive for smaller fleets and owner-operators, who constitute a significant portion of the long-haul and heavy-duty truck population. The proposed costs, currently at least double compared to diesel vehicles, are based on US or European truck configurations, which do not consider the unique challenges faced by Canadian fleets, including heavy haul weights, demanding duty cycles, and extreme environmental conditions.
In British Columbia, approximately 83.4% of the trucking sector operates in long-haul and/or Canadian weight conditions, rendering them ineligible for the limited ZEV options currently on the market. Additionally:
Electric transportation refrigeration units and the necessary infrastructure to support them do not exist.
Current market-ready medium and heavy-duty ZEVs have limited range (300-400 km), while hydrogen fuel cell hybrids with greater range are still in early development.
Existing ZEVs are engineered to US weight standards, which are significantly lower than Canadian weights, resulting in reduced cargo capacity and increased costs if the mandate is enforced.
Limiting support for transitioning to clean transportation to ZEVs alone would necessitate up to a 31.4% increase in vehicles and drivers, leading to congestion, safety concerns, and higher transportation costs for consumers.
In summary, only 16.6% of the BC Medium and Heavy duty sector can transition to ZEVs, leaving the remaining 83.4% without a zero-emission option. For reference, we are attaching a copy of the BC Trucking Association Input Letter to the Proposed BC ZEV Mandates.
We believe that these challenges call for an expansion of any government measure supporting ZEV adoption to encompass LEV technologies as a transitional solution for immediate emissions reduction while fleets await the availability of suitable ZEV products in the Canadian market.
Given the current state of readiness for heavy-duty zero-emission technologies, it is challenging for BC and the rest of Canada to achieve established greenhouse gas reduction targets. Expanding the proposed measures for ZEVs to include lower-emission vehicle (LEV) technologies, such as Hydra's Hydrogen Internal Combustion retrofit system, to be eligible for the proposed tax credits and tax reductions, will enable the transportation industry to reduce emissions more rapidly using transitional technologies in the short to medium term.
Sincerely,
Laura Guzman
VP, Partnerships
