-- CTF Encouraged by Martin's Musings on Gas Taxes, CTF Discouraged by Manley's Smokescreen Study --

OTTAWA: The Canadian Taxpayers Federation (CTF) today reacted to several media reports pointing to a willingness on behalf of the Federal Finance Minister to meet with his provincial counterparts to discuss the possibility of lowering gas taxes to provide much needed pump price relief for beleaguered Canadian motorists.

"Provincial Finance Ministers should be booking airplane tickets today to get to Ottawa to discuss this matter," said CTF federal director Walter Robinson. "Ottawa and the provinces rake in $10 billion in fuel taxes each year and put very little back into road construction and highway development. In fact, Ottawa returns a mere 5% of what it collects at the pumps back into road construction and highway development."

"Gas taxes are a user fee on roads. Lowering gas taxes to a level commensurate with highway development would have an immediate impact at the pumps," added Robinson. "Oil companies would be crazy not to pass through any savings to consumers as a result of lower gas taxes, it would be commercial suicide."

The CTF pointed out that a pump price of 70 cents a litre, taxes account for 43% of the total price. The federal tax component is 10 cents/litre and provincial fuel taxes range from as low as 9 cents/litre in Alberta to a high of 16.5 cents/litre in Newfoundland. In addition, GST (or HST in three Atlantic provinces) is a component of the total price, essentially a tax on a tax.

"Minister Martin's willingness to look at gas taxes is a constructive approach to begin to alleviate consumer pump rage," added Robinson. "And it is in stark contract to the approach of his colleague, Industry Minister John Manley, who is going to waste almost $700,000 for yet another study of the structure of the oil industry and petroleum retailing."

"The time for studies is over, the time for action in the form of lower gas taxes is now," stressed Robinson. "Gas taxes are a user fee for roads. Their current levels amount to highway robbery. Lowering them is the quickest and surest road to take to arrive at a destination of lower pump prices."