By Jim Kerr
I have been watching with interest the reaction to the Federal Government’s “feebate” policy on new vehicles. If you haven’t heard about it, the Government has developed a program of rebates and fees on newly registered cars and trucks as part of their plan to reduce greenhouse gases from automobiles. As much as I applaud the effort to protect our environment, I believe this “feebate” program is not the way to do it, and is just another form of taxation for many families.
The premise of the “feebate” program is to provide rebates to vehicles with the best fuel economy (and therefore less greenhouse gas emissions) and charge a fee on those with poor fuel economy. The scale is progressive, with a $2000 rebate if the car is rated at 5.5 L/100 km or better. Vehicles between 5.6 and 6.0 L receive a $1500 rebate while those between 6.1 and 6.5 litres get a $1000 rebate.
There are no rebates or fees for vehicles rated between 6.6 litres and 12.9 litres, but above that, charges to the manufacturers apply, increasing to $4000 if your car gets 16 L/100 km or worse. Trucks have their own scale, with progressive rebates below 8.3 L/100 km and fees for those above 13 L/100 km.
While this initially looks like a good program, I see several flaws. First of all, larger vehicles will be taxed the most, yet these are also the vehicles that families use every day. While these vehicles do contribute more to greenhouse gases than small economy vehicles, there are other ways of reducing greenhouse gases. Incentives for car pooling, or rebates for drivers who can show they drive under the average annual mileage on all vehicles registered to them would do more to reduce greenhouse gases.
To reduce greenhouse gases without impacting families and businesses that need larger vehicles, more money could be invested in public transportation and infrastructure. Reducing traffic jams, improving traffic flow by synchronizing traffic lights and resurfacing roads for lower rolling resistance would make a huge improvement in fuel economy for everyone and lower greenhouse gases. Even having tire inflation checked regularly would help, and improve safety at the same time. Perhaps the government should offer free drive-through tire inflation stations! It would make more sense to me than the “feebate” program.
Another flaw is the arbitrary rating system for fuel economy: the Honda Fit is a good example. This economy vehicle is rated at 6.6 L/100 km so it receives no rebate, yet by removing standard equipment such as air bags and ABS brakes, the vehicle could get better fuel economy and receive a rebate. The rebate program promotes bare-bones stripped vehicles, but at what cost to occupant safety?
Instead of looking at rebates and fees when purchasing vehicles, consumers need to look at what they really need in a vehicle, then look at total operating costs of that vehicle over the ownership period. Reliability and low maintenance costs also reduce greenhouse gases, as they reduce the manufacturing and shipping of replacement parts.
Consider that newer vehicles are often more fuel efficient than similar vehicles from past model years. If your new vehicle is going to be charged a fee because of its fuel economy rating, then you may delay purchasing that new vehicle, even though your old one is far less efficient. Perhaps it would be better if vehicle taxation policies were more like those in Japan, where the newest vehicles cost the least to license, with fees increasing as a vehicle ages. This would tend to remove the most polluting vehicles off the road.
Several provinces such as Manitoba, Quebec, Ontario, PEI and British Columbia also have programs or incentives for vehicles that reduce greenhouse gases. Unfortunately, the Federal “feebate” program and provincial programs are not integrated and may be based on different criteria, causing confusion for buyers.
Do we really need a rebate program to move buyers into vehicles that obtain better fuel economy? I think not. Higher fuel prices already are doing that, without any intervention from government. Even the National Round Table on the Environment and the Economy recommended in 2005 that the Government of Canada decide to not implement a vehicle “feebate” at this time, but instead develop a comprehensive, integrated strategy aimed at reducing greenhouse gas emissions in the transportation sector. I agree.