The argument for the Carbon tax

Change is hard, and without a nudge will not happen. Be it gas cars or humming generators, gas is everywhere in our society. A nearby construction site has generators humming day and night, despite having a power line they could use for less money. In fact, upon closer inspection, that construction site is using “coloured fuel”, tax exempt fuel for equipment not driving on provincial highways. So it gives us a preview of what might happen on a bigger scale should Mr. Poilievre get his wish and “axe the tax”, and its not pretty.

Lets start with a review of the construction site, its a sea of Diesel equipment, in fact, I do not see anything operating on electricity. Despite there being power available through overhead lines. In fact the businesses and houses that were at the site all used these same power-lines without any difficulty. Off camera there are some Diesel water pumps.

But there is no electric equipment available some say. Not true, in fact Volvo one of the leading suppliers of construction equipment has a range of all-electric equipment (source). Further, the Borden gold mine in northern Ontario operates on all electric equipment, much of it the same as you need on a construction site (source).

But there how to I charge the equipment, some say. Easy, use the available power-lines. Note that overnight construction activities are severely restricted (source), so an overnight charge could be done without any impact to schedule, the equipment will just sit there anyways. Tethered operation is another option that the Borden mine uses to keep going at all hours of the day (source). After all once the equipment is set up, it can only physically move a block or two.

But EVs are so expensive, some say. There is a grain of truth in here, most of the kit I see at my neighbourhood construction site appears to hail from the “older Bush” era. While 30 year old kit can be bought on the cheap, as with “Dart”, a 2007 Subaru Legacy, operating expenses on used fossil equipment easily overwhelm whatever savings are to be had (source). The EV savings might be even more pronounced when you consider the duty cycle. An older ICE car might make some sense if it is not used much. Since the construction equipment is running basically at all hours except at night when they are required to shutdown, EV savings might be quite significant.

Generators are a particularly sharp point. Operating costs on a per kWh basis, can be as high as a few dollars per kWh (source), that’s 10 times what I pay! Sure, Toronto Hydro charges a few hundred dollars connection fee (source), but that Diesel generator is not free either, United Rentals charges more than that (~ $1000/month) for a Diesel unit I similar to the one in the photos (source), fuel extra.

How much of a discount is coloured Diesel at anyways? Well, according to https://www.ontario.ca/document/fuel-tax/coloured-fuel, coloured fuel gets to skip the Ontario Fuel tax, that’s about $0.09/l (source) at the time of this writing, although usually its $0.14/l. In comparison the Carbon tax is currently $0.14/l (source), so about the same as the usual fuel tax levy.

So, should Mr. Poilievre get his wish and “axe the tax” should we expect Diesel generators everywhere? I hope not, in particular as the economics are really unfavourable for Diesel generators, to a point where I really have to question why Diesel generators are being used at my neighbourhood construction site. Its quite frankly a colossal waste of public money, designed it seems to piss of the neighbours, I cant really think of any other reason. While sometimes you have no choice but to rely on Diesel power, if there is a power-hookup available just over your nose, its stupid not to take advantage of that. Nevertheless, the myth of “cheap gas” can be quite destructive.