Paying Too Much at the Pump? Tax Federation Demands Changes

Are you aware that, if you are a two-car family, you spend about $1,225 in gas taxes per year?

Federal and provincial tax-on-tax cost Canadians an average 2.5 cents/litre, or $82 a year for a two-car family. In total, that's $1.7 billion nationally.

Taxes make up nearly 29 per cent of the pump price for gasoline.

Now, asks the Canadian Taxpayers' Federation (CTF), what does such level of taxation do to improve our (and our cars') lives?
Just as a reminder: Canada's Prime Minister Stephen Harper used to be one of the bosses of the CTF.

The CTF has prepared a set of graphs to illustrate its point, saying that, "there is a strong positive correlation between lower pump prices in provinces with lower gas taxes."

And it asks an important question: do these taxes contribute to anything we would expect them to, such as improved roads?

"Gas taxes continue to eat up a disproportionate amount of Canadian household income," said CTF federal director Gregory Thomas. "But Canadians are not only paying high gas taxes, they are paying unfair tax-on-tax."

The Conservative Party said in 2004, verbatim, that: "The fastest and easiest way to give Canadians relief at the pump is for the federal government to stop charging GST on top of gasoline excise taxes. It's time to axe the tax on the tax."

That's when they were not in government.

"We agree with the Conservative policy commitment of ending the tax-on-tax. The question is: do they still agree with themselves?" asked Thomas.

The Gas Tax Honesty Day happens each May, just before the long weekend. The idea: to remind motorists that nearly 29 per cent of the price at the pump is taxes, many of them hidden.

There is a clear and strong correlation between provinces with lower gas taxes and lower pump prices, the CTF said.

"The evidence is clear: lower gas taxes mean lower pump prices," said Thomas. "If Canadians want relief at the pump, the way to deliver it is to cut gas taxes, starting with the GST/HST tax-on-tax."

Gas and carbon tax hikes in Manitoba and British Columbia will force significant increases in gas prices in those provinces, at $68 and $216 respectively for a two-car family.

What are we actually paying for? The numbers are surprising.

And can (and should) there be a change? The CFT's answer is an unequivocal yes.

Will the politicians go for it? One of the greatest economists of all time, Joseph Schumpeter, once wrote in his diary that: "Politicians are like bad horsemen who are so preoccupied with keeping in the saddle that they can't bother about where they're going."

Your guess is as good as anybody's.


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