Gas Tax Report

Ottawa: The Canadian Taxpayers Federation (CTF) today concluded its Running on Empty, Fuming to Ottawa campaign in Ottawa. The 30-day cross-country tour began on May 25th at Mile Zero on Vancouver Island and traveled through British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. The tour stopped in 40 communities to build support for the CTF's Municipal Roadway Trust - a practical model for returning half of the federal gas tax revenues directly to municipalities - and for a gasoline tax cut of 5 cents a litre to give consumers a break at the pumps.

"'Use it or lose it' is our gas tax slogan, and at the end of this campaign we believe there is consensus from three party leaders that federal gas taxes revenues should be spent on roadway development and highway maintenance," said John Williamson. "But, and this is a big but, we will continue to press Members of Parliament after the election to deliver on the promises made by party leaders to dedicate gas taxes to municipalities. The gas tax money Ottawa collects comes from motorists across Canada and should be returned to their communities and spent on roads."

Williamson went on to note, "On the question of reducing gasoline taxes, to date, only the Conservative party has said it will move ahead in this area, albeit by a modest amount."

The Municipal Roadway Trust policy and a gas tax cut received the support of mayors and councilors from across Canada. To date, over 1,500 mayors and councilors from over 450 municipalities have signed the CTF's gas tax petition. The petition is available at https://www.taxpayer.com/cuttaxes.htm. The CTF has collected more than 80,000 signatures on its petition. They will be delivered to the next government following the June 28th election.

The CTF's campaign decorated van traveled 7,164 km and was driven across western Canada and Ontario by federal director John Williamson. A total of $804.63 was spent on gasoline, of which $253.64 was tax (31.5 per cent). The CTF launched the campaign to inform Canadians of the gasoline taxes they pay at the pumps, to ensure gasoline taxes are dedicated toward road construction, and to pressure Ottawa to cut gasoline taxes not spent on road construction.

Canadian Gas Facts:

• Of the $5.3-billion collected in federal gasoline and diesel taxes in 2003/04, Ottawa returned a paltry 2.5 per cent or $135-million back in provincial transfers for road and highway development. (In addition, Ottawa collected $1.178-billion in gasoline GST revenues.)
• Over the past 12 months - the period of May 2003 to April 2004 - the average cost of a litre of gasoline paid by Canadian motorists was 73.3 cents. Taxes accounted for 42 per cent of the pump price. Gasoline prices have now jumped to an average weekly price of 88 cents/litre. GST is charged on the full pump price, gasoline taxes included. It is a tax on tax. As the pump price increases so too does the GST.
• The federal gasoline tax increased by more than 550 per cent between 1985 and 1995 - from 1.5 to 10 cents/litre. As a deficit reduction measure in 1995, Ottawa increased the gasoline tax from 8.5 to 10 cents/litre. The federal deficit was vanquished six years ago, but the tax remains.
• Liberal leadership candidate Paul Martin pledged to share federal gasoline tax revenues with municipalities, but did not deliver on this promise in the recent budget. Despite this failure, the Prime Minister has again campaigned on the policy in the 2004 general election.

In 2002, Canadian municipalities spent $7.8-billion building and maintaining roads yet received none of the federal gasoline tax revenues. More than 80 per cent of all roads in Canada are municipal roads.

In addition to the Municipal Roadway Trust, the CTF is demanding Ottawa eliminate the 1.5 cent/litre deficit tax as a first step; remove the GST (and HST where applicable) charged on the federal and provincial levies that total 19 to 30 cents per litre of gasoline to net another 1.5 cents in savings; and reduce the federal levy by an additional 2 cents.