St. Andrews (New Brunswick): The Canadian Taxpayers Federation (CTF) continues to speak out on the issue of high gasoline taxes. Overnight the prices of gas jumped to $1.31 a litre in Ottawa, $1.20 in Toronto, $1.15 in Montreal and $1.13 in Vancouver. The price hikes come amid reports of extensive damage to oil platforms in the Gulf of Mexico caused by hurricane Katrina. The CTF has led the charge in blowing the whistle on tax gouging at the pumps, and is again calling on the federal government to act by lowering fuel taxes.

"Approximately one third of the price of a litre of fuel in Canada is taxes. Taxpayers want action in the form of lower taxes on fuel, not more excuses from federal politicians why gas taxes cannot be reduced," stated CTF federal director John Williamson. "It is time Ottawa ended its gas gouging. This can be accomplished with three easy steps. First, Ottawa should end its GST/HST tax-on-tax bite. This will lower the price, on average, by 1.5 cents a litre. Next, scrap the deficit elimination tax, which will save another penny and a half. Lastly reduce the federal levy by 2 cents, bringing the total saving to motorists to 5 cents a litre."

In fiscal 2004-2005, the federal government collected $4.5-billion in combined federal gasoline and diesel taxes (not including GST revenue), an 18 per cent increase over what was collected ten years earlier. One explanation for the rise is the steady increase in gasoline tax rates. The federal gasoline levy increased 567 per cent between 1985 and 1995 - from 1.5 cents per litre to 10 cents per litre.

In 1995, the year Ottawa's gasoline tax jumped from 8.5 to 10 cents per litre the hike was labeled a "deficit elimination measure" by then-Finance Minister Paul Martin. Canada's deficit was vanquished in 1997-1998, but the deficit reduction tax remains and the federal government's gouging at the pumps continues even with multi-year, multi-billion dollar surpluses.

Another contributor to growing federal gasoline tax revenues is the GST and HST (paid in New Brunswick, Nova Scotia and Newfoundland & Labrador). The GST and HST are charged on the full pump price, gasoline taxes included. The tax is levied on Ottawa's 10 cent per litre fuel excise tax as well as provincial taxes, which range from a low of 9 cents/litre to a high of 20.5 cents/litre.

As pump prices climb, Ottawa rakes in even more GST revenues. Between 1996-1997 and 2004-2005, GST revenues from gasoline sales increased from $909-million to $1.2-billion - a 31 per cent increase. At current price levels, the federal treasury will collect at least another $300-million over the next year - bringing total GST revenues from gas to over $1.5-billion.