Don't bring in vehicle "feebates" on their own
says National Round Table

Ottawa - The National Round Table on the Environment and the Economy (NRTEE) has recommended to the federal government that it not introduce a program of vehicle "feebates" in the next federal budget. Feebates - fees or rebates for vehicle sales depending on their fuel efficiency - may not on their own be effective in achieving their goals of encouraging conservation and minimizing greenhouse gas emissions in Canada."

The NRTEE's Report is in response to the Government's request in Budget 2005 that it examine feebates, consult with stakeholders and make recommendations prior to the next budget. After researching the issue and consulting with industry, labour, consumer and environmental organizations and government representatives, the Round Table concluded that:

• A feebate program on its own would not likely bring about its intended goals - encouraging people to purchase more fuel efficient vehicles and thus lessen greenhouse gas emissions that contribute to climate change. There are too many unknown or poorly understood external factors that could distort how the vehicle market works - some factors could actually lead to increased emissions such as increased purchases of used vehicles or cross border arbitrage.
  
• It would be better to develop a comprehensive, integrated strategy aimed at reducing greenhouse gas emissions across the whole transportation sector. Within this strategy, a vehicle feebate could be considered further. All stakeholder groups consulted agreed that a comprehensive strategy would work better.
  
• A step forward would be for the Federal Government, with the Canadian Vehicle Manufacturers' Association (CVMA) and the Association of International Automobile Manufacturers of Canada (AIAMC), to release a detailed plan for the implementation of the existing Memorandum of Understanding (MOU) that commits the Canadian automotive industry to achieving a target for reducing greenhouse gas emissions by 5.3 megatonnes (Mt) of greenhouse gas emissions (CO2e) from cars and light trucks in 2010. This plan should be released to the public no later than November 1, 2006.

"Feebates are not the most promising tool for achieving significant greenhouse gas reductions in Canada's transportation sector and are not consistent with the approach the NRTEE is taking on its longer term advice to the Prime Minster on a post-Kyoto climate change strategy," said Glen Murray, NRTEE Chair. "Feebates alone could cost consumers more for little benefit to the environment and hamper our vitally important automotive industry."

The NRTEE, an independent federal agency, is dedicated to exploring new opportunities to integrate environmental conservation and economic development, in order to sustain Canada's prosperity and secure its future.

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For more information, please contact:

Ms. Kelly Bagg, Communications Advisor
Tel.: (613) 947-0664 / Cell: (613) 447-8519
Fax: (613) 992-7385 / E-mail: baggk@nrtee-trnee.ca

Media Contacts

NRTEE - Terms of Reference for the Development of Options for a Revenue Neutral Vehicle Feebate in Canada

Development of Options for a Vehicle Feebate in Canada
--Final Report--

The NRTEE commissioned this study, whose objectives are to: understand the nature of the motor vehicle market in Canada and trends, including the recent Memorandum of Understanding (MOU) between the industry and the Government on greenhouse gas (GHG) emissions; identify the key feebate options that meet the mandatory parameters identified by the Government; and, assess the options against the criteria established in the Budget 2005 Framework.

Full Report (HTML)
PDF Version