VICTORIA: The Canadian Taxpayers Federation (CTF) today responded to fee and licence increases announced at this morning's Provincial Cabinet meeting. The CTF applauds the streamlining of fees but calls upon the provincial government to reduce personal income taxes in next week's budget by a minimum of $23 million to offset today's fee and licence increases.

The CTF supports the rationalization of user fees on the conditional that:

1.) fees recoup the cost of the service provided, as opposed to setting fees haphazardly in terms of what the market can bear.
2.) fee increases are offset by personal income tax cuts in the upcoming budget

"A $35 fee hike for a 5-year driver's license is acceptable providing the revenues generated are dedicated toward road safety that protects the public and reduces public insurance benefit payouts," said Victor Vrsnik, BC Director for the Canadian Taxpayers Federation. "But setting the cost of driver licenses in line with the Canadian average is unfair because there is no linkage to the cost of the service."

On balance, the $23 million fee increase still leaves a net tax cut of approximately $1.4 billion (taking into account last February's MSP and PST hikes). "Increases to user fees are far superior to any income tax hike because only the user of the service has to pay, eliminating the subsidy from all working British Columbians," said Vrsnik.

The CTF prefers that provincial revenue sources to be transformed from wealth killing income taxes to fees related to the cost of services provided so that users directly pay for the service.

"Today's fee increases should not stop the provincial government from actively working toward broad-based tax cuts," concluded Vrsnik.