The CTF began its Gas Tax Honesty Campaign in 1999 to inform Canadians of the gasoline taxes they pay at the pumps (see gas facts, below, for updated figures), to ensure gasoline taxes are dedicated toward roads, and to pressure Ottawa to cut gasoline taxes not spent on road construction. In 2002, the CTF proposed a Municipal Roadway Trust - a practical model for returning half of federal gas tax revenues directly to municipalities to spend on roads and highway development and maintenance.

In addition to implementing a MRT-style model, the CTF is calling on Ottawa to eliminate the 1.5 cent/litre "deficit elimination tax" as a first step; stop taxing taxes by removing the GST (and HST where applicable) charged on federal and provincial gas taxes; and reduce the federal levy an additional 2 cents. These three measures would reduce the gas tax bite by 5 cents a litre. To date, the CTF has delivered more than 150,000 petitions to Parliament Hill demanding lower and dedicated gas taxes. (On October 5, 2005, then-Opposition leader Stephen Harper accepted 35,000 of these petitions.)

This year's gas tax report - entitled Gas Taxes: Promises Made, Promises Unkept - highlights past problems with Ottawa's gas tax sharing schemes, notes the continued gouging of consumers as gasoline prices soar, and details the Harper government's election promises.

"Past gas tax transfer deals miss the mark by making the construction and maintenance of roads, highways and bridges a secondary priority," said federal director John Williamson. "The government should be commended for dedicating a greater percentage of gas tax revenues to roadway spending. Now they need to make good on their election promise to renegotiate the so-called New Deal with cities so that roadways are made a priority, and gas tax dollars are spent on road construction and maintenance."

On gas taxes the Conservative government is in full retreat from commitments repeatedly made in opposition. "Stephen Harper vowed to reduce the gas tax bite, and we believe a promise made in opposition should be a promise kept in government," continued Williamson. "As record-high gas prices pump unanticipated millions of dollars into federal coffers, it is time to give some of that money back to taxpaying motorists who are running on empty."

Canadian Gas Facts -

Over the past 12 months - the period of May 2005 to April 2006 - the average cost of a litre of gasoline paid by Canadian motorists was approximately 96 cents. This represents a 12-cent increase over last year's average price. Taxes account for an average 35% of the pump price. Gasoline prices have now jumped to a weekly average price of over $1 per litre in every region of the country.

Of the $5.2-billion collected in federal gasoline and diesel taxes in 2005/06, Ottawa will spend 17% or $882-million on actual road and highway construction and maintenance.

In addition, 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. Two years ago, the federal government collected $1.4-billion in gasoline GST revenues. For every 10 cent increase in the price of gasoline, Ottawa's GST revenues rise by $175-million. Due to soaring gas prices, Ottawa will collect $1.8-billion in GST from gasoline in 2005/06, up $400-million over the previous year.

As a deficit reduction measure in 1995, Ottawa increased the federal gasoline tax from 8.5 to 10 cents per litre. The deficit was vanquished eight years ago, but the tax remains and the federal government's gouging at the pumps continues even with multi-year, multi-billion dollar federal surpluses.

Despite a greater investment in roadway construction and maintenance, the new government is in full retreat from commitments to reduce gas taxes. On August 18, 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 previous 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."

In opposition, the Conservatives made repeated promises to remove the GST tax-on-tax bite and pledged to remove the GST completely when gasoline prices exceeded 85 cents per litre.

The Conservative platform committed the government to expand the New Deal to allow all cities and communities - including cities with more than 500,000 people - to use gas tax transfer dollars to build and repair roads and bridges to improve road safety and fight traffic congestion.

In 2003, Canadian municipalities spent $6.4-billion building and maintaining roads. More than eighty per cent of all roads in Canada are municipal roads.