Pump Price Crisis
Author:
Victor Vrsnik
2000/09/27
Canadian motorists surrendered $12 billion in gas taxes last year. Over the same period, Ottawa raked in a $12 billion budget surplus. Motorists ask a simple question: what's wrong with this picture
The federal piggy bank is splitting at the seams with over-taxation. All the while Finance Minister Paul Martin turns a deaf ear to the growing chorus for a fuel tax cut.
While motorists bite the bullet with another price hike at the pumps this week, the federal government makes off like thieves. Net GST revenues from the pumps are expected to increase by 19 percent or $150 million more this year over last. Where does the money go Anywhere except for roads. Barely five percent of federal fuel tax revenues are returned to concrete.
Paul Martin refuses to budge on gas tax relief unless the Premiers agree to trim back their own provincial excise taxes. Did Martin need the provinces' permission to hike gas taxes 1.5 cents per litre in 1995 as a deficit fighting measure With the deficit slain for three years now, does he need their permission now to eliminate the tax "No" to both questions.
Expectations on Ottawa do not release the provinces from doing their share to help motorists with more affordable pump prices. Highways Minister Steve Ashton will not cooperate with Ottawa saying that the revenue sacrificed from a provincial gas tax cut would have to be made up from another source.
But the money has already been made up in spades. The NDP have 313 million more tax dollars to play with this year than last not including federal transfers. With that kind of elbowroom, the NDP could eliminate the gasoline tax altogether and still have another $156 million to boot. Surely they can afford to throw a few crumbs to Manitoba motorists.
Federal and provincial politicians have one other lame excuse. They say that any pump price decrease from a tax cut would be back-filled with a price hike by the oil companies. Unless the oil execs are sniffing fumes from their own pumps, the scenario seems remote. Neither government nor the oil industry can afford much more of the public's wrath.
If Martin and his provincial counterparts continue to dither on the pump price crisis they may find themselves as unpopular as Prime Minster Tony Blair following the British fuel protests. Martin runs the risk of naturally deselecting himself out of the Liberal leadership race if he opts to follow in Blair's tracks.
Without lowering gas taxes, the federal government will be handicapped when pressuring OPEC countries to boost oil production. OPEC leaders never miss an opportunity to remind governments of their own price gouging at the pumps.