Martin's road to victory is one that needs paving
Author:
David Hanley
2003/09/30
Given B.C.'s status as a have-not province, Paul Martin's recent visit was more like a royal tour of a sick bay. It's not that he bypassed Alberta or other "alienated" western provinces for political reasons; he was simply attending to a more chronic ward.
Still, granting B.C. such an early audience was princely of Mr. Martin. But before too many more foreheads are bruised from all the kowtowing, let's be clear about his pre-coronation promise to share the federal portion of gas taxes with municipalities.
First, he didn't promise anything. He only hinted that sharing a portion of the federal gas tax is "part of the answer to make municipal funding more predictable."
As the Canadian Taxpayers Federation has highlighted for years, the vast majority of federal gasoline tax revenues are not being spent to improve our roads and highways. Of the $4.7 billion collected in federal gasoline taxes in 2001-02, Ottawa returned an infant's allowance worth: 2.5 percent or $118 million.
Of that pittance, 99 percent was spent on roads in Quebec and the Maritimes. (Perhaps that's why Mr. Martin decided to come so soon, and quickly, while passable roads exist in B.C..)
By contrast, the U.S. federal government collected $25 billion in gasoline tax revenues in 1998-99, and spent $21 billion on roads and highways. That's 84 percent of tax revenues being poured into new concrete for American roads.
Mr. Martin's comments indicate he is not unaware of the problem. His hints may even morph into promises that evolve into results. But his blessings didn't hint at how much he might give back to municipalities, only that "it's going to have to be a reasonable amount."
Here's what is reasonable, sir. First, before you give anything back to municipalities for road and highway improvements, we'd like to offer you something. Please take the 1.5 cent/litre tax you introduced in 1995 to eliminate the deficit. Under your able stewardship, we taxpayers have killed the deficit, so you can have your tax back.
That would bring the federal portion of tax taken at the pump down to 8.5 cents/litre from 10 cents. Recall that in 1985, just three years before you were first elected to Parliament, the federal gasoline tax was 1.5 cents per litre. And, my, how we've all grown.
Next, we ask that you transfer 50 percent of that reduced federal gas tax to municipalities for roadway development, preferably using the CTF's Municipal Roadway Trust model. More on our model below.
Finally, the GST must not be charged on the full pump price (which, of course, includes all other gas taxes). This is a tax on a tax.
The Association of Consulting Engineers estimates that Canada's roads and highways need improvements costing $17 billion. In the spirit of your 1995 deficit-eliminating gas tax, our Municipal Roadway Trust model would eliminate the highway improvement deficit in less than eight years by using 50 percent of federal gas taxes.
To ensure that funds were only spent on roads, each municipality would identify the road, bridge or section built or repaired, and provide the cost of each project. Each year, the Auditor General would provide an audit of the Municipal Roadway Trust model to the House of Commons. The program could run for three years and would be subject to renewal by Parliament.
B.C. taxpayers send more than $750 million to Ottawa as part of the federal gas tax. Mr. Martin, you can change part of our "have-not" status, when it comes to what is returned for road improvements, by halving what Ottawa keeps. Then our foreheads won't be so scraped from bumpy roads on your next return.