Ottawa: The Canadian Taxpayers Federation (CTF) responded today to recent announcements by the New Brunswick Liberal and Conservative parties indicating that regardless of which party is elected to form the next government on September 18th, the province will end up with the country's second lowest provincial gas tax levy. Soaring gas prices has clearly become a major election issue in the maritime province.

Opposition Liberal leader Shawn Graham launched his party's election campaign Friday with a promise to give drivers a 3.8¢ per litre break at the pumps and to end the failed practice of the New Brunswick government regulating gasoline prices at the pumps - a policy that has led to retailer boycotts and no reduction in the price at the pumps. Conservative Premier Bernard Lord countered by announcing a 4.5¢ gas tax cut. The Conservatives will reduce the tax by 2¢ within a month of election day with the balance realized over the government's next mandate. The Liberal reduction will be implemented within 120 days.

New Brunswick currently taxes gasoline at 14.5¢ a litre (plus the HST, see "Gas Tax Facts" below for more). The Liberal proposal will drop the provincial levy to 10.7¢ and the Conservative plan to 10¢. Alberta has the lowest gas tax rate of 9¢ a litre.

"Approximately one third of the price of a litre of fuel in Canada is taxes. Taxpayers want action in the form of lower taxes on fuel, not more excuses from politicians why gas taxes cannot be reduced," stated CTF federal director John Williamson. "Political leaders from New Brunswick's two dominant parties have responded to soaring gas prices by unveiling significant tax relief proposals. The tax reduction will save motorists between $42-million and $50-million a year."

The CTF has led the charge in blowing the whistle on tax gouging at the pumps. The price motorists pay can be broken down into four components: crude oil costs, refining costs, retailer profit margin and gas taxes. Depending on the province, gas taxes represent between 26 and 37 per cent of the total price. Canadian governments cannot control the world price of oil, but legislators can reduce pump prices by lowering gas taxes.

"Over the coming 12 months there will be elections in several provinces and possibly a national election. The New Brunswick campaign teams have correctly identified high gas taxes as an important voter issue," said Williamson. "We expect gas tax gouging will be in play elsewhere, particularly at the federal level. Prime Minister Stephen Harper vowed to lower gas taxes in opposition yet has failed to take action and front-runner Liberal leadership candidate Michael Ignatieff is proposing higher gas taxes."

Gas Tax Facts:

During the 12 month period between May 2005 and April 2006, the average cost of a litre of gasoline paid by motorists was approximately 96 cents. Gas taxes account for an average of 34 per cent of the pump price. Gasoline prices have today jumped to a weekly average price of over $1 a litre.

The federal gas tax levy is 10¢ a litre. Per litre provincial gas taxes are 16.5¢ in Newfoundland & Labrador; 11.5¢ in P.E.I. (plus a 10% provincial sales tax); 15.5¢ in Nova Scotia; 14.5¢ in New Brunswick; 15.2¢ in Quebec (plus a 7.5% provincial sales tax); 14.7¢ in Ontario; 11.5¢ in Manitoba; 15¢ in Saskatchewan; 9¢ in Alberta; and 14.5¢ in British Columbia. Additional provincial taxes are levied in Montreal, Vancouver and Victoria.

Another contributor to the tax bite is the 6% GST and 14% HST (paid in N.B., N.S. and Nfld.). The GST and HST are charged on the full pump price, gasoline taxes included. As pump prices climb, Ottawa and the HST provinces rake in even more revenues.