Have you filled up your tank lately If you have, a few expletives probably crossed your lips. Gas prices in most cities across Canada are hovering between 77 and 86 cents/litre. And while charges of collusion or a price-fixing conspiracy are often made, evidence of this is non-existent. In July 1999, the Competition Bureau - in response to 243 complaints - concluded, "there is no evidence of communication among the gasoline companies to coordinate a price increase."

And this past January, the Conference Board of Canada noted that "Canadians are well served by the current market system that determines gasoline prices - the volatility and uniformity in gasoline prices is a direct result of the competitive nature o the business at the street level."

This is not to say Big Oil is perfect: far from it. Indeed, they have done a pathetic job at explaining the pricing process and other factors driving volatility at the pumps. But our mandate and focus is government spending and taxation.

And courtesy of your gas tank and wallet, both the federal and all provincial governments are doing a booming business at the pumps. Consider the following facts:

In the last year, gasoline taxes accounted for an average of 42% of the pump price paid by Canadian motorists.

With pump prices hovering around 80 cents/litre, Canadian motorists are paying between 38% and 46% in taxes to provincial and federal governments.
Federal gasoline tax increased over 500% between 1985 and 1995, from 1.5 to 10 cents/litre.

Ottawa increased the federal gasoline tax from 8.5 to 10 cents/litre in 1995 as a deficit reduction measure. The deficit is gone, but the tax remains.

GST is charged on the full pump price, gasoline taxes included. It's a tax on tax.

Gasoline tax revenues and motoring related fees have reached record high levels. Yet, the vast majority of federal gasoline tax revenues are not channeled back into road and highway improvements. Of the $4.7 billion collected in federal gasoline taxes last year (1999/2000), Ottawa returned a paltry 4.0% or $190 million back in provincial transfers for road and highway development and 96% of this amount was spent east of Ontario.

A report by the federal and provincial transportation ministers found that the 25,000-kilometre National Highway System has not improved since 1988 and that a complete facelift would cost over $17-billion. The report estimates that the average annual impact of such an investment would save drivers 84 million hours in travel time and 173 million litres in fuel.

But it's a different situation south of the border. In 1998-99, the US federal government collected $25 billion in gasoline tax revenues and spent $21 billion on roads and highways. In all, 84% of US gasoline tax revenues went back into concrete.

To change this situation, the CTF has made several recommendations that include:

Dedicating gasoline tax revenues to highway construction and maintenance;

Transferring a greater share of federal gasoline tax revenues to the provinces for the express purpose of highway development;

Elimination of the HST and GST charges on the tax component of the pump price; and

Reducing gas taxes to a level commensurate with roadway spending.