Year after year motorists bemoan the high price of gas. An attempted national boycott against gas retailers last month is the latest expression of this growing frustration. But the outcry against gas companies has shielded government from justifying its own consumer gouging.

Originally, fuel taxes were implemented to help offset the costs of building and maintaining highway infrastructure. Today fuel taxes are regarded as "sin taxes" like alcohol and tobacco taxes. Once fuel taxes became synonymous with "sin taxes," public and government perceptions about their use and intended purpose began to change. Now these taxes are an important source of general revenues.

The result: across the country gas taxes now represent about 50% of the pump price. Or put another way, taxes represent a 100% markup on the price. For every litre of gas you buy, Ottawa walks away with 10 cents plus GST. The provinces take on average 13 cents per litre. But these are just the surtaxes. The actual gas cost, excluding the federal and provincial taxes slapped on at the pumps, already has a whole battery of gas taxes built in, such as: royalty fees, corporate income taxes, business taxes, property taxes, etc.

On May 20th, gas at many stations in the Greater Toronto area was 56.2 cents/litre. Of this amount, 26 cents was the actual cost, the other 28.2 cents went to pay taxes. And Ottawa is making a killing. Of the estimated $5-billion in fuel taxes collected by the feds, a mere 5% finds its way back to our roads.

All levels of government have commissioned studies on fuel pricing. Rather than focusing on tax burdens, committee after committee has singled out the petroleum refining and distribution industry on the presumption of alleged price fixing.

But the time has come to blow the whistle on government gouging at the pumps. The Canadian Taxpayers Federation recently launched "Gas Tax Honesty Day" - a public awareness campaign that drives home two points - "The cost of gas is 50% tax," and "Gas taxes are a user fee; use it or lose it."

The campaign appeals to the court of public opinion to raise awareness, educate and advocate a lower overall tax burden for motorists. The purpose of the campaign to re-focus and re-direct consumer frustration for high gas prices at Government.

A petition and a research report released for the campaign recommends that Ottawa dedicate gas taxes to rebuilding Canada's aging roads and cut the excess tax rate from the pump price. Motorists could well use the brake.



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FACT: On the May long weekend in 1987 the average price of gasoline in Toronto was 46.1 cents/litre;

The price without tax was 29.2 cents/litre. On the May long weekend in 1997 the average price of gasoline was 56.9 cents/litre; the price without tax was 28.0 cents/litre.

FACT: Prices may increase or decrease during a long weekend. According to the Canadian Petroleum Products Institute (CPPI) data, in 1997, prices increased on 3 out of 6 long weekends, while they decreased on the other three. And preliminary evidence indicates that prices decreased on 4 of 6 long weekends in 1998.

FACT: In 1957, taxes averaged slightly less than 2.8 cents for every 9.5 cents Canadians paid on a litre of gas, or 29% of the price. In 1998, when a litre cost 53 cents, 28.4 cents - 54% of the total - went to Ottawa and the provinces. That's an 86% increase in gas taxes since 1957.