The Canadian Taxpayers Federation (CTF) is calling on the federal government to end the practice of applying the HST/GST after provincial and federal excise taxes have already been charged. This practice of “tax-on-tax” was highlighted as part of the CTF’s 17th annual Gas Tax Honesty Day, with press conferences held across the country from Victoria to Saint John.
Back in 2004, as Leader of the Opposition, Stephen Harper said “the fastest and easiest way to give Canadians relief at the pump is for the federal government to stop charging GST on top of gasoline excise taxes. It’s time to axe the tax on the tax.”
For example, in Ontario, the tax-on-tax costs drivers an extra 3 cents per litre. Eliminating this hidden tax would save Canadian drivers a total of $1.5 billion each year.
“There are lots of drivers who will drive across town to save 3 cents per litre, and yet that savings could be passed on to them instantly if the federal government just stopped taxing their own taxes,” said CTF Research Director Jeff Bowes. “Stephen Harper knew this was the right thing to do in 2004 and he should know it’s the right thing to do in 2015.”
The CTF’s annual Gas Tax Honesty Day report shows that taxes make up most of the price difference between at the pump from province to province, and even city to city. Alberta has the lowest gas prices because it has the lowest gas taxes and Vancouver and Montreal have the highest prices because they have the highest gas taxes.
“On average Canadians are paying 34 per cent of the price at the pump in gas taxes,” said Bowes, “It’s 39 per cent in in Vancouver and Quebec. It’s a hidden tax rip-off that all Canadians bear, but some worse than others.”
The CTF is also calling on the federal government to eliminate the 1.5 cents-per-litre federal “deficit elimination” gas tax. The tax was introduced in 1995 to balance the budget, but when the budget was balanced in 1997 the tax stayed. It survived 11 surpluses between 1997 and 2007.
“Last time the federal government ran surpluses, motorists kept paying this ‘deficit elimination tax,’ but now that the federal government is in surplus again, it’s time for this tax to go,” concluded Bowes.
Canadian Taxpayers Association
