Coal producers call for tough action on taxes

A persistent bunch, Canadian coal producers are renewing pleas to various levels of government as part of an ongoing effort to reduce taxes levied against them.

A recent study by the Coal Association of Canada outlines the punitive taxes that have damaged the industry’s competitiveness, and the association warns that the tax base is at risk.

James Gardiner, chairman of the association, said the government must reduce taxes now if the industry is to survive. Four mines have changed hands in the past two years as a result of financial difficulties, and more than 2,000 jobs have been lost in the past 18 months.

Gardiner said the industry has received vague promises for years but that nothing has been done.

Railway property taxes and federal-provincial taxes on diesel fuel cost western coal producers an additional $1 per tonne of coal shipped to Roberts Bank, and an additional $2 per tonne shipped east to Ontario and the U.S. Lease rates paid by Westshore Terminals to Vancouver Port Corp. are also targeted by the study. Rates have tripled since 1987, while the price of coal has decreased by 35%. Based on the current rate structure, Vancouver Port receives a 50% return per year on its investment at Robert Bank and the coal industry sees this as excessive.

Most importantly, the industry notes that it has cut on-site costs to the bone and is looking not for subsidies but for what it calls a “level playing field.”