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How feds make $750 m = $37 m

Author: Victor Vrsnik 2002/11/28
Federal Finance Minister John Manley recently sent the big-city mayors away empty-handed after they made a pitch for a share of federal gas taxes.

The mayors are looking to pro-Kyoto federal Liberals to ante-up the cash needed to expand some eco-friendly urban transit systems. More buses, they claim, mean less cars and less carbon emissions. You'd think the federalist would be all over the idea.

But it appears last on the Liberal's priority list are road repairs in Surrey. The vast majority of federal gasoline tax revenues are not channeled back into road and highway improvements. Of the $4.8 billion collected in federal gasoline taxes last year, Ottawa returned 2.4 per cent or $113 million in provincial transfers for road and highway development, of which 99 per cent was spent east of Ontario.

B.C. received only $37 million of the $750 million motorists gave Ottawa in gas taxes last year.

Meanwhile, roads and highways are getting ripped to shreds by unrepaired wear and tear. The ten Premiers have a snowball's hope in hell to wrestle cash out of Ottawa for roads after queuing up for $7 billion in health care funding. but cities can't realize their full economic potential without improvements in their infrastructure.

Ottawa should set up a municipal road trust and dedicate $2.2 billion or 50 per cent of its gas tax revenues to municipalities for road development. It would provide instant cash for stretched urban regions and provide accountability for spending of federal tax dollars. The feds should also: reduce gas tax rates to levels commensurate with road and highway funding; eliminate the 1.5 cent/litre tax started in 1995 as a deficit fighting measure; and eliminate the GST on the tax part of the pump price. It is not a question of creating new taxes, but one of fairly distributing existing taxes.

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