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SUMA hits the brakes on gas tax

Author: David Maclean 2003/02/05
Hats off to Saskatchewan Urban Municipalities Association (SUMA) delegates for voting down a resolution calling for a one cent per litre increase in gasoline taxes as a form of "alternative revenue" for municipalities.

After a spirited debate among delegates, the resolution was defeated by just a few votes. Close votes are not common at SUMA conventions, particularly on resolutions proposed by elected members of the Board. When all was said and done, SUMA delegates recognized what many SUMA Board members don't - that Saskatchewan residents can't tolerate another tax increase.

Saskatchewan residents are burdened with the highest property and school taxes on the prairies. As a percentage of GDP, property taxes in Saskatchewan are the second highest in Western Canada. At 15 cents a litre, our province has the fourth highest fuel tax rates in Canada. Just a couple cents more and we would have the dubious distinction of having the highest gas taxes in Canada. This is definitely not the message we want to send to people considering a move to Saskatchewan, and definitely not a sign that Saskatchewan is "open for business".

Municipalities are charged with ever-expanding responsibilities as the provincial and federal governments offload services on to municipalities. Over the years government revenue sharing has slowly dwindled down to a trickle, leaving municipalities (especially growing ones) with massive infrastructure deficits - in some cases municipalities are a hundred years behind on road maintenance.

Recognizing the need for a greater share of the cash being sucked out of municipalities in the form of fuel taxes, SUMA delegates voted to support a revised resolution calling for $15 million from the province - which roughly equals a one cent share of the 15 cents the province currently collects.

Of course, the province is not the only culprit here. The federal government shares an even greater degree of responsibility. Of the $4.8 billion collected in federal gas taxes last year, only 2.4 per cent was returned back in provincial transfers for road and highway development, of which 99 per cent was spent east of Ontario.

The Canadian Taxpayers Federation has a proposal, the Municipal Roadway Trust, that would return a portion of the fuel tax money to communities to go toward what was originally intended - roads and infrastructure. It also includes built-in accountability - a scarce commodity these days. Under the Municipal Roadway Trust program $92 million would be sent to Saskatchewan towns and cities each year. This money would be legally dedicated to roads, bridges and infrastructure - not bocce ball courts and park fountains.

The Municipal Roadway Trust is a fair and principled approach to the municipal cash crunch. This is not a cash call for government, and it's not a way of playing the 'blame game.' Tax money should be returned to communities to be spent in an open and accountable manner.

In what was ultimately a victory for taxpayers, SUMA delegates made the right decision in scrapping the fuel tax idea and calling for a fair share of provincial fuel tax revenues. Now the ball is in the provincial government's court. Can they continue to justify spending on film companies, ridiculous advertising campaigns and ethanol plants while municipalities struggle to fix roads

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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