Taxi Industry Feeling the Carbon Tax Pinch
HALIFAX — Last Sunday, while Haligonians were enjoying a rare sunny day, Rizwan Anees was doing calculations in his head. July is off to a rough start for any business owner in Nova Scotia who uses a lot of gasoline, now that the carbon tax has taken effect.
On the first of the month, gas shot up by 16.7 cents per litre, most of which was caused by the new tax. It now costs a pricey $1.74 per litre when you fill up your car with regular fuel.
Anees uses more gas than most. He is the owner, and one of the drivers, for ARF Airfleet Cab and Limousine. The taxi company specializes in driving people to and from the Halifax international airport. His rates remain flat regardless of sudden increased business costs. Most Haligonians pay $60 to the airport, and $70 from it.
While doing all the math in his head, Anees, already a busy man, figures he will have to work an extra two hours a day to make up for the spike in gas prices.
“Last night I was sitting. On Sundays I usually work less. My thought was, I’m working 12 hours but to make the same money, I need to work 14 hours a day,” Anees told Huddle. “Because of that carbon tax… it’s like I have to work two hours extra. If you’re not going to work 14 hours you’re going to make less money because you’re going to use more money in gas.”
Because taxi drivers and companies can’t increase prices on their own, any gas price hike automatically cuts into profit margins. Anees estimates that now, after taxes and expenses are deducted, a taxi driver makes less than $20 for an airport run, even though it can take up to an hour or more. The only exception is if a rider tips generously.
“Airport has a flat rate. And that’s fixed by the airport authority and the taxi commission,” he explained to Huddle. “Even if you’re riding city taxis, they also have a $4.70 fixed rate [plus the meter], it doesn’t matter. Nobody cares about the gas price going up and down.”
“If you’re driving to the airport [as a taxi], you can’t drive a very small car, which is very efficient for fuel. We need at least 2.5 litre [engine]. So 2.5 will easily cost you $20 for gas on one run.”
Anees drives cabs himself because it’s hard to make a lot of money being just a dispatcher unless you have a large fleet of vehicles. Anees says cab drivers pay him just $3 per customer for dispatching services.
“They are not happy to give us $3 because the costs and everything is so high. They are saying we are only making $17- $18. So what’s going to happen?” Anees asks rhetorically. “We can’t go more than that because we need to pay Google, and the phone bills and the company bills. So, many drivers are leaving the taxi industry.”
Anees also expressed frustration that few seem to take notice, or care, about the troubles of the taxi industry. Higher gas prices is just one thorn. There is now heavy competition in Halifax from Uber. And, like other industries, taxis are still suffering from people going out less since the pandemic.
Then there is the issue of skyrocketing insurance costs. Anees says he is paying nearly double for his own cab’s insurance compared to when he started just a few years ago, despite being accident-free. Anees blames this on a lack of competition. He claims there used to be two companies that offered insurance to cab drivers. Now there is just one.
“There’s so many things [wrong] right now,” he said. “I’ve been driving since 2016. I’m not a very old driver. At first, I was paying $3,500 a year for my insurance. I don’t have any accidents. Insurance is now $6,500; $3,000 more than it was five years ago.”
But you don’t need to be directly tied to a gas-guzzling industry to feel the affects of the carbon tax. As Patrick Sullivan, the president and CEO of the Halifax Chamber of Commerce explains, most goods are imported into Nova Scotia.
“This is going to have an impact on, frankly, everybody in the city,” said Sullivan.”It’s obviously going to have an impact in terms of filling up the gas tanks and filling up the oil tanks, but…there’s not enough products in Nova Scotia produced consumers. So virtually all the food we get comes from other areas. And those trucking companies will have to fill up with gas somewhere.”
Sullivan also notes that, while the federal government is offering carbon tax rebates to individuals, he has heard nothing for business support. He said consumers in Halifax could see prices go up in a matter of weeks because of the carbon tax.
“The only conversations I’ve heard, primarily from the federal government, is that there will be support for consumers. I’ve heard nothing of a support for businesses. And of course from the provincial government, I’ve only heard that the federal government is to blame.”
“It won’t be long (before prices increase). Businesses and transportation companies are not in the habit of absorbing cost. So they will need to pass on any additional costs that they’ve seen.”