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TORONTO / REGINA: The Canadian Taxpayers Federation (CTF) today launched its 11th Annual Gas Tax Day. In addition to demanding lower gas taxes, the CTF’s latest gas tax report calls for a new federal Gas Tax Accountability Act. The Act requires that gas tax revenues be dedicated 100 per cent to roads and also mandates transparency of spending.
CTF Federal Director, Kevin Gaudet said “shedding light on how gas taxes are spent will help ensure it is dedicated to roads, bridges and highways; instead of bocce ball courts, canoe museums and various other non-road related projects.”
The CTF’s yearly campaign kicks-off the summer travel season for Canadian motorists. It is also the day of the year that taxpaying motorists are reminded of the high tax component hidden in the price of gasoline and how governments spend that revenue.
Since the beginning of 2009, the average national pump price of gasoline has been $0.85/litre, 37 per cent of which is taxes. Despite falling gas prices government continues to collect substantial gas tax revenues.
“It’s time for government to stop hosing drivers and cut gas taxes now by 5 cents a litre,” continued Gaudet.
“The GST is charged to the full pump price, which includes an average of $0.28/litre in taxes. This is a ‘tax-on-tax.’ That $0.28 includes a ‘deficit elimination tax’ which never went away during years of massive government surpluses. Government can begin by first eliminating the GST ‘tax-on-tax,’ and then ending the ‘deficit elimination tax’ as soon as it balances the books,” said Gaudet.
CTF directors fanned out across Canada where they held press conferences on issues highlighted in the 11th Annual Gas Tax Honesty Report, entitled “Are We There Yet?” The report includes a draft version of a Gas Tax Accountability Act. The governments of Saskatchewan and Manitoba already have a version of such an act.
In Regina, CTF Saskatchewan Director Lee Harding delivered about 1,000 petitions to Leader of the Opposition Lorne Calvert to push the Sask Party government to reduce provincial gas taxes by 7 cents per litre. “At 15 cents per litre, Saskatchewan’s levy is far higher than Alberta’s nine cents or even Manitoba’s eleven-and-a-half,” said Harding. “It’s a competitive disadvantage that Premier Wall railed against in opposition but has not moved on since gaining power.”
Harding left the legislature to travel to Saskatoon. In the afternoon, a few lucky motorists at the Husky Station at the corner of 33rd Street West and Confederation Drive received their gas taxes back. This amounted to almost one-third of the price at the pump.
When the CTF launched the Gas Tax Honesty Campaign in 1998, the federal government spent only 26 per cent of what it collected from taxes on gasoline and diesel on infrastructure. In 2009, it is expected that the government will spend 146 per cent of what it collects on infrastructure; however a significant portion of that figure is so-called ‘stimulus’ spending. In 2002, the CTF introduced its Municipal Roadway Trust model which the federal government has largely adopted.
“The federal government should be commended for its real action on roadway spending. We are often critical – and rightly so – about how government spends our money, but this is an example of where government gets something right,” added Gaudet. “The Gas Tax Transfer among several other measures is what’s needed for stable and sufficient roadway infrastructure spending at the local level.”
Despite the federal government closing the gap between what is collects in gasoline and diesel taxes and what is spends on roads, major accountability measures are missing. Federal ‘infrastructure’ spending figures do not specify what is spent on roads, but rather are grouped together with other spending measures that include recreation facilities and Kyoto-inspired initiatives.
The CTF’s 11th Annual Gas Tax Honesty Day report, entitled “Are We There Yet?” can be found at http://www.taxpayer.com/bank/report/206.pdf with supplementary data at http://www.taxpayer.com/bank/report/207.pdf.
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