Efficiency - Transport | Food Policy for Canada

Improve environmental efficiencies in fuel standards and design

Encourage electric light freight and farm vehicles

Measures to reduce trucking – cabotage, fees, tolls and taxes

Subsidize rejuvenation of rail branch lines

Improve environmental efficiencies in fuel standards and design

Given initiatives already underway by TC, and the Canada-U.S. Regulatory Cooperation Council, an efficiency stage strategy uses existing and emerging regulations and programmes to progressively ratchet up fuel efficiency and emission reduction requirements for all transport modes (including passenger cars) in the spirit of continuous improvement. As discussed above, the needs are especially high for rail and air, which lag behind requirements for truck and ship. Although industry will usually balk, from a regulatory perspective, such changes are usually straightforward since they involve changes to technical specifications that can usually be adopted through Orders-in-Council. Some shipping companies have already pledged to only purchase new ships running on carbon neutral fuels (Reuters, 2021), regulators have an opportunity to push other firms to follow suit.

Encourage electric light freight and farm vehicles

Although federal emission rules are changing to improve heavy and light trucks, a further strategy is to encourage electric light freight vehicles. For under 3.5 tonnes, conventional trucks have high emissions / tonne-km (Edwards-Jones et al., 2008), so presumably all electric or hybrid light trucks can bring down emissions more quickly than just changing standards for combustion engines and their vehicles. For trucks over 3.5 tonnes, electric power is a less viable option, although battery innovation continues to improve.

LCA reveals that, due to battery components and assembly, production impacts on the environment are more significant for electric light vehicles than combustion ones, but use impacts are significantly lower, depending on the electricity mix. Sensitivity analysis suggests that the cleaner the electricity mix, the lower the overall GHG emissions (Hawkins et al., 2012), which supports increasing renewable electricity production. There are however concerns regarding use of farmland for solar and wind farms (see Goal 5 Protecting Agricultural Land). There is significant debate about the negative socio-economic and environmental affects of mining of minerals associated with batteries and renewable energy technology, including lithium and cobalt, even to the point where some are labelled "conflict" minerals (cf. Global Witness, 2022). Such minerals are now considered strategic commodities and of geopolitical significance, resulting in a rush to exploitation by many states. Given the generally poor environmental performance of the mining sector, many cases of economic exploitation, and the failures to recycle many mineral components, these realities could have a negative impact on the evolution of the electric vehicle market (cf. IPCC, 2022; chapter 10).

Regarding the fit with urban environments, “electric vehicles are suitable for duty cycles in (sub-)urban areas involving a low daily driving range and a relatively low load capacity. Also they work best when driving at low speed on flat terrain. Charging stations should be available at regular intervals and charging times of more than 30 minutes are required to utilise electric vehicles to their full potential .... Electric freight vehicles are best suited for last mile deliveries in compact cities involving short distance” (ENCLOSE, 2014). Range can be an issue (150-200 km a day is feasible), and there can be issues with draw on the battery from heating and cooling in extreme weather. There are payload losses because of battery weight and elevated floors to accommodate the battery’s space requirements (ENCLOSE, 2014). Although the 20 ft container is the dominant size and would not fit on such trucks, there are currently also 6, 8 and 10 ft containers that are more suitable.

Although light EVs are the most promising, food distributors are now working with semis on urban / suburban warehouse to grocery store routes. For example, Loblaw's is purchasing 5 heavy duty EVs to perform these functions (out of a fleet of 160) as part of their decarbonization initiative (Canadian Grocer Staff, 2023).

There are several strategies provinces and municipalities can employ to encourage electric truck / van fleets. Roads are primarily owned and maintained by different levels of government. They have the authority to regulate what goes on the road. Provinces use vehicle registration infrastructure to regulate the types of vehicles permitted. For example, the Ontario Highway Traffic Act allows regulations for the type of equipment and vehicle registration^[1]. Eight provinces and territories have incentive programs for zero emission vehicles (ZEVs) (ECCC, 2022). Quebec offers $8000 rebates to consumers and businesses for ZEVs of $60,000 or less. BC's Specialty Use Vehicle Incentive has the strongest program which all provinces should adapt, recouping 1/3 of the purchase price, up to $100,000 (or 2/3 for tourism and hospitality) for medium and heavy duty ZEVs (Wallcraft, 2021).

Municipalities are permitted to regulate the types of vehicles and the amount of noise, fumes and smoke they generate. Electric vehicles produce minimal noise, and no combustion fumes. Toronto has an idling by-law. If you’re vehicle doesn’t idle, that provides a delivery advantage. Some municipal jurisdictions have developed and implemented delivery service plans for cities to reduce pollution and noise^[2]. These have numerous dimensions. Some European cities have established low – emission zones, accessed only by low emission vehicles (ENCLOSE, 2014). Off-hour delivery is feasible in residential areas if a vehicle is green, quiet and the route is optimized to assure efficient delivery. Under those conditions, qualifying vehicles can delivery anytime, otherwise time restrictions are imposed, particularly night time restrictions. Special parking zones exist for delivery e-trucks with charging stations in some German cities. Allowing electric freight vehicles free passage on toll roads is another proposal (ENCLOSE, 2014). Toronto’s municipal code (chapter 591) already exempts electric cars from the definition of a motor vehicle so this could be extended to electric freight trucks. This would facilitate exemption from rules on unloading in specified zones at restricted times^[3]. Toronto also has rules on loading standards for new developments, and these are more onerous in the downtown area (MMM Group, 2009), but could be relaxed if the locations were serviced by electric freight vehicles. Since charging stations is important infrastructure for electric vehicles, installing charging stations on those sites would also enhance the viability of the approach. Tax credits are provided in some parts of the US to commercial applicants installing such stations (ENCLOSE, 2014). If public and parapublic agencies were to institute progressive fleet replacement programmes involving electric vehicles and charging infrastructure, the utility of e-trucks would be accelerated.

Electric cargo bikes are increasingly used in dense urban areas for take out delivery and proximate small packing courier.

The 2021 federal budget announced a number of initiatives that can facilitate last mile electric freight vehicles (Wallcraft, 2021):

$56 million for charging and fuelling station standards
$46 million for advancing critical mineral supply for batteries
50% tax break for manufacturers of zero emission technologies
Incentives for ZEV program allows for write off of 100% of purchase price up to $55,000

The 2030 Emissions Reduction Plan (ECCC, 2022) has proposed increased financing for many of these provisions and added some additional incentives.

Quebec is positioning itself to be a leader in battery and ZEV light truck manufacturing.

These existing incentives do not yet appear to apply to the farm machinery market. Increasing numbers of electric tractors are now on the market (cf. Lyseng, 2019), though they cannot yet be a full replacement for diesel tractors in all classes and farm scales, since many are under 85 HP with 4-8 hour operating windows. The NFU and Qualmann (2021) posit that the movement to zero emission farm equipment could be accelerated with incentives to purchase low-emission machinery through low-rate financing and accelerated depreciation. They also suggest a re-purposing of the Prairie Agricultural Machinery Institute to sharpen focus on zero emission equipment. As much of their work is funded through producer groups and government funding programs, pressure can be exerted to shift their mandate. All these measures can build on 2021 budget provisions announced in the Agricultural Clean Technology program.

There is also early work on electrifying the inshore fishing fleet, with a First Nations in Cape Breton taking a leading role (Canadian Press, 2022).

Since budget announcements often precede full program design, the next task is getting the program designs right and off the ground in quick order. Also critical is the training for electricians in electric vehicle infrastructure maintenance. To address problems with the environmental impacts of the electricity mix, electric tractors should be linked with on-farm solar electrical capacity.

Measures to reduce trucking – cabotage, fees, tolls and taxes

Given the mode preference hierarchy presented above, the long term strategy involves shifting food delivery out of trucks. Ultimately, it means that truck freight and the trucking industry has to shrink. In the near term, the focus is to ensure truck freight is optimized (ie. limit empty or semi loads) and that routes minimize food miles. One area that needs changing is the cabotage^[4] rules. Cabotage rules evolved in earlier periods when domestic economic development and national security were priorities, eras in which understanding of ecology was significantly limited and environmental problems not apparent.

Designed to protect domestic sectors, these rules have the effect of generating ecological inefficiencies and, based on differential application of said rules across modes, favouring certain modes over others. While NAFTA provisions on cabotage were not really relaxed in shipping with the US, they were in trucking (related to international point to point routes and drivers) which helped increase truck freight. Some changes under NAFTA between Mexico and Canada did increase shipping at the expense of trucking, again suggesting that differentiated rules can favour one over the other (Higgins and Ferguson, 2011). Unfortunately, no North American intermodal concept has been implemented though it was discussed during NAFTA negotiations (Blank and Prentice, 2012). The USMCA largely retained existing cabotage rules in Canada.

Regulated under the Customs Act and Customs Tariff (cargo, vehicles, container) and the Immigration and Refugee Protection Act (drivers), cabotage in trucking needs to be modified to make truck freight more efficient. The current rules restrict certain kinds of backhaul and topping up of loads with domestic goods, and altering the route to accommodate such measures, all of which which means semi-empty or empty trucks (Kiselbach, 2013). These rules need to be changed. Total deregulation of cabotage is not recommended because that could create more truck traffic and over longer distances.

Changing US cabotage rules in shipping will be challenging. The Jones Act in the US is a fundamental obstacle to enhancing short sea shipping along the coastal waterways (Blank and Prentice, 2012). Some analysts suggest the Act will be difficult to change and it’s better to create a North American flag for US and Canadian ships that permits equal treatment in each other’s waters. Some adjustments to the Canada Coasting Trade Act would be required to facilitate this, in particular providing licences and waiving fees and duties for US ships engaging in coastal shipping of freight under such flags. It is thought that such shifts would take freight out of coastal trucking. In Canada, Montreal is a major port and a current challenge is that seaway ships are smaller than ocean ships, so containers have to be moved in Montreal, but why not ship more at least to Toronto or Hamilton? MacRae et al. (2013) provide one case study of the GHG reductions associated with maximizing ship movement.

Cabotage in air should be maintained since the proposals below are designed to discourage air freight.

There are also many fees and tolls for cost recovery (Higgins and Ferguson, 2011). To comply with the mode preference hierarchy, policies that encourage trucking need to be modified or fees and tolls for trucking should be elevated while those for rail and ship should be reduced. For example, the US Harbour Maintenance Fee appears to encourage trucking over short sea shipping between Canada and US, especially for higher value items. Efforts to create exemptions for short sea shipping have so far failed in the US. Charges for customs and coast guard could also be reduced to encourage short sea shipping that moves cargo out of trucks. Toll reductions on locks are already in place for new business, so this measure could be extended to other charges (Higgins and Ferguson, 2011).

Subsidize rejuvenation of rail branch lines

The privatization and consolidation of main branch railways has resulted in the closure of many branch lines that were deemed unprofitable, with negative implications for community economic vitality and the environment. The demise of the Canadian Wheat Board is also implicated in these developments, and the Board had a more coordinated approach to optimizing rail infrastructure than currently exists with the private grain traders. There are many reports of farmers having to ship their grain longer distances by truck due to the closure of many rail branch lines and the grain elevators associated with them (see also Goal 2, Demand supply coordination, Efficiency).

Somewhat ironically, having facilitated the demise of many branch lines, the federal government has now started to provide funds for the rejuvenation of these short lines, recognizing that their loss has had significant impacts. For example, the federal government recently allocated $4.2 million to a short line company in Alberta, 40 Mile Rail, for track, expanded sidings and expansion of a transload facility. The improvements will expand volume and make linkages to mainlines more efficient, in part required by the rules set down by the big two main line companies, CP and CN (Cross, 2019). At the efficiency stage, such investments are important until the rail infrastructure is re-acquired by the state (see Substitution).

Tie freight into transit

In the spirit of exploring underutilized infrastructure, some jurisdictions have proposed using existing transit lines to move freight. “Implementation ideas include the night-time use of rail or bus rapid transit lines for freight, the addition of freight cars to subways or commuter rail trains, or the use of rapid transit rail lines by freight-specific vehicles at regular, scheduled times during the day” (Metrolinx, 2011). Night-time use is likely dependent on using electric vehicles to mitigate noise and idling, suggesting the use of electrified street car lines where they exist, or the transition to more electric light trucks as discussed above. Such schemes require full feasibility studies.

Tax aviation fuel

In many countries aviation fuel is untaxed, typically on international flights and many jurisdictions no longer tax fuel on domestic flights. In Canada, taxes are levied provincially, with Ontario planning to raise taxes, but other provinces reducing or eliminating them. “British Columbia became the latest province to eliminate its international fuel tax in 2012, joining New Brunswick, Alberta, Quebec and Saskatchewan. Newfoundland and Labrador has no fuel tax for international flights but charges tax for flights to the United States. Manitoba has the highest rate at 3.2 cents, but nothing for U.S. and international cargo flights ….. While some provinces have eliminated fuel taxes on international flights, they all charge for domestic flights, ranging from 0.7 to 3.2 cents per litre. At 6.7 cents, Ontario would be more than double its provincial neighbours. Most U.S. airports charge little or no fuel taxes.” (Canada Press, 2014). The federal government charges rents at airports, navigation fees and security charges which are likely more targeted to passenger traffic but have some impacts on cargo as well, since cargo is moved on passenger flights.

Given these recent shifts, and the complications of taxing international flights and obtaining an international agreement on a tax regime, re-establishing taxes on passenger traffic is unlikely in the near term. However, maintaining or re-establishing fuel taxes on dedicated cargo planes might be feasible, with a medium term objective to also tax, on a proportional basis, fuel on passenger flights carrying cargo.

Improve transport of animals

The federal government regulates animal transport under the Health of Animals Regulations, Part XII, though many elements are quite general or considered by some welfare specialists to be too lax. As a result, some organizations have developed voluntary codes that build upon the existing regulations, including animal welfare groups, the organic sector, the National Farm Animal Care Council (NFACC) and Local Food Plus. These voluntary codes exhibit different degrees of precision and welfare improving requirements, but as a collectivity reflect the weaknesses of existing regulations. At a minimum, the Health of Animals Regulations should be improved to an NFACC standard, in other words creating a new mandatory minimum. The other standards can still be pursued on a voluntary basis. See also Goal 9, Human Relations with Animals.

Endnotes

[1] http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90h08_e.htm#BK288
[2] https://www.tfl.gov.uk/info-for/freight/planning/london-freight-plan
[3] http://www.toronto.ca/legdocs/municode/1184_591.pdf
[4] When foreign carriers and drivers/captains deliver domestic goods within Canada