BINDA: Ottawa must pump the brakes on the gas tax hike

Count the days. 

Ottawa is going to make your life more expensive on September 8. The government is planning to slap a 10-cent-per-litre tax back onto every litre of gasoline. Diesel will jump four cents.

That means you’ll pay more at the pump. Costs will ripple through our economy. 

Prime Minister Mark Carney needs to abandon his plan to hike gas taxes this month. 

Nowhere will that land harder than Metro Vancouver, where drivers already pay the most for gas in the country. A litre runs $1.90 here on average. In Alberta it’s $1.55. Same fuel, 35 cents apart. Tax is the biggest reason why.

Start with the tax almost nobody notices. TransLink charges you 18.5 cents out of every litre you pump. You pay it if you drive to work and never ride a bus or SkyTrain.

Fill a 64-litre tank and roughly $12 vanishes into TransLink’s account before you’ve pulled out of the station.

That’s the tax that sets this region apart. It’s why drivers in Metro Vancouver hand over more tax at the pump than anyone else in BC.

Then comes another hidden tax: the 18 cents a litre buried in BC’s Low Carbon Fuel Standard. That’s essentially another carbon tax embedded in a complicated provincial regulation that requires energy companies to buy and sell credits. The costs are passed down in every litre of gasoline and diesel that you buy. That hidden tax is a big reason why BC stands out nationally. In the rest of Canada, fuel regulations add about seven cents per litre. 

Then there’s nine cents in provincial fuel tax.

If that’s not bad enough, Ottawa charges GST on top of all the other taxes. That means you’re paying a tax on your taxes. 

About 55 cents of what you pay per litre is tax, not fuel. On a single fill, that’s roughly $35 handed to different levels of governments before you’ve bought a drop of gas.

And now Ottawa is planning on taking even more. 

It doesn’t stop with the people at the pump.

Think about a courier running parcels from Richmond to North Vancouver and back, five or six days a week. He fills up more than most of us. And after Sept. 8, every tank costs him another $7 in tax. For a tradesperson running a diesel pickup, it’s closer to $11 a fill. That’s money off the top of a paycheque, week after week. If they can’t afford to eat those costs, they might raise prices for their work to offset the tax hike. 

Every truck that hauls groceries to the store, every van that delivers a couch, every rig that carries lumber to a job site, pays the same tax and passes it down the line. The federal government admits its own tax drives up costs for “truckers and businesses in the food, agriculture, housing, construction and delivery sectors.” 

Think about what that means for Vancouverites. Grocery bills go up. Housing and new builds become even more expensive. 

Ottawa suspended this tax back in April, when war in the Persian Gulf sent oil prices soaring. That was the right decision. 

That war is still happening. Gas prices are still high. People still can’t afford Ottawa gas tax. All of the conditions underlying that April decision are still in play.

Canada’s government can’t steer a war overseas, but it can decide how deep to reach into your wallet at home. Reaching back into your pockets on Sept. 8 is a choice.

It’s a choice that hits hardest at the low-income levels. A $35 tax bill is pocket change to someone doing well. To a single parent in Surrey scraping by on minimum wage, it can force the impossible decision between driving to work or filling the fridge.

British Columbians don’t want Ottawa to hike gas taxes. Sixty-four percent oppose the September hike, according to a Leger poll. Among those with an opinion, opposition climbs to 75% in BC and 71% nationally.

When three out of four taxpayers are telling Ottawa to back off, the best move is to leave the tax where it is.

Carson Binda is the BC Director for the Canadian Taxpayers Federation.