Taxpayers federation calls for end to fuel tax-on-tax

Daniel MacEachern
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The Canadian Taxpayers Federation renewed its annual call Wednesday for federal and provincial governments to lower fuel taxes.

“The taxation system is rigged against drivers,” Kevin Lacey, director of the federation, told the Telegram on Wednesday. “We pay tax on just about everything we buy now, and now with gas, we pay tax even on our own taxes that we pay. And given that Newfoundland has one of the highest excise taxes, or consumption taxes, in the entire country, it’s a bigger problem here than it is almost anywhere else in Canada.”

Provincial and federal taxes are charged per litre, said Lacey, and the HST is charged on top of that. “What we’re calling for is actually to put the HST on the base price, and then charge the two taxes on top of that. So that way, at least, you’re still charging HST on top of the product price, but you’re not charging taxes on top of taxes.” The federation estimates that the tax-on-tax amounts to about 3.4 cents per litre, and about $22.8 million per year in government revenue.

“The price of gasoline has really gone up over the last three years, and because of that, the governments are reaping more and more revenue from higher gas prices, because the HST is charged as a percentage on the gas prices. So the government’s already earning more and more revenue, and second, it’s really an issue of principle, and whether or not the government really should be charging taxes on its own taxes.”

George Murphy, MHA for St. John’s East and co-founder of the Consumer Group for Fair Gas Prices, said governments have collected fuel taxes this way for years but it could change with the stroke of a pen.

“The only thing you have to do is develop a consensus between the federal government and the provinces in order to change the way that the tax is levied now in order to have fair and equal taxation on it. But we’re simply not getting a fair taxation level on it. What you’re seeing here is an extra three and a half cents that’s collected by the feds and the province and divvied up. It’s double-taxation.”


For more, see Thursday’s Telegram., Twitter: @TelegramDaniel

Organizations: Consumer Group for Fair Gas Prices

Geographic location: Newfoundland, Canada

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