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Promise Breakers Club Opening an Ottawa Chapter

Author: Adam Taylor 2006/04/20
Dalton McGuinty is used to blaming others for his problems. Whether it is the so-called "fiscal imbalance" or Ontario's deficit, the premier is always quick to point the finger. But finally he seems to have gotten it right. Last week, he responded to queries from cash-strapped motorists about high gas prices by telling them to "talk to Harper."

The price of gasoline in Ontario - and all of Canada - has skyrocketed. Last week alone, the national average was $107.9 and in Ontario gas prices ranged between $1.05 and $1.10. Taxes make up approximately a third of the pump price.

In August, 2005, then-Opposition leader Stephen Harper blasted the Liberal government for refusing to reduce gas taxes as prices soared. "There's no reason for the federal government to profiteer when consumers are hurting," he said urging the old Liberal government to give motorists a break. "This is causing considerable dislocation. There are a lot of people on fixed incomes. There are a lot of businesses on thin margins that are going to be affected by this."

Mr. Harper went further, saying there were numerous ways the government could ease the pain at the pumps, "They could knock the GST off of the excise tax. They could knock the GST off of gas above a certain price level."

Last summer, Mr. Harper stated very clearly that gas taxes could be reduced by as much as 5 cents a litre. Later on Parliament Hill, he accepted 35,000 petitions from the Canadian Taxpayers Federation calling on Ottawa to cut gas taxes.

The new Prime Minister is now in full retreat from his commitment to reduce gas taxes. Recently, he signaled that the one per cent reduction in GST was the only measure that would deal with gasoline levies.

The federal government benefits immensely from higher gas prices. Because GST is charged on the total pump price, taxes included, GST revenues go up as gas prices increase. Every ten cent increase in the price of gasoline pumps an additional $175-million into federal coffers. In 2006, the federal government stands to collect $1.8-billion in GST revenue from gasoline, up $400-million from 2005. In short, as taxpaying motorists get gouged, government revenues soar.

Mr. Harper is now saying that high gas prices are here to stay and that paying them is something taxpaying motorists will just have to "get used to." Never mind, what he said in opposition. Why would he change tunes so quickly, especially as skyrocketing gas prices leave taxpayers running on empty

A promise made in opposition should be a promise kept in government. With the Prime Minister set to put the federal government in reverse on gas taxes it looks like there is a national version of Dalton McGuinty in the making in Ottawa.

Politicians that say one thing in opposition and do another in government, is this what taxpayers should get "used to" from Mr. Harper

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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