Wednesday, August 31, 2005

No more excuses

Gas prices are soaring, and the government is raking in hundreds of millions in GST revenue.

In 1995, the year Ottawa’s gasoline tax jumped from 8.5 to 10 cents per litre the hike was labeled a “deficit elimination measure” by then-Finance Minister Paul Martin. Canada’s deficit was vanquished in 1997-1998, but the deficit reduction tax remains and the federal government’s gouging at the pumps continues even with multi-year, multi-billion dollar surpluses.

Another contributor to growing federal gasoline tax revenues is the GST and HST (paid in New Brunswick, Nova Scotia and Newfoundland & Labrador). The GST and HST are charged on the full pump price, gasoline taxes included. The tax is levied on Ottawa’s 10 cent per litre fuel excise tax as well as provincial taxes, which range from a low of 9 cents/litre to a high of 20.5 cents/litre.

As pump prices climb, Ottawa rakes in even more GST revenues. Between 1996-1997 and 2004-2005, GST revenues from gasoline sales increased from $909-million to $1.2-billion – a 31 per cent increase. At current price levels, the federal treasury will collect at least another $300-million over the next year — bringing total GST revenues from gas to over $1.5-billion.

3 comments:

Anonymous said...

I have to say - 5-7 cents a litre at these prices is not going to make much difference.

The GST/HST needs to be COMPLETELY removed from the gas prices, in addition to the removal of the 1.5 cent deficit tax and the levy reduction. That would save at least 14 cents as a start (22 cents in Atlantic Canada). Also look at possibly reducing provincial taxes...particularly those who charge PST on gas as well. That could cut the gas prices by about 20-25 cents a litre. They'd still be high, but the gouging would be gone.

David MacLean said...

Great point. We start with the feds, and then turn our attention to the provinces.

Anonymous said...

Right on David!! We MUST keep the smokescreen up to protect the oil companies from public criticism by ALWAYS insisting that the problem is 'taxes' and not the opportunistic gouging of Esso, Shell, Gulf, etc. Keep up the good work!

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