With Victoria Day weekend just over, our traditional vacation and travel season begins. This year, with the implementation of the federal government’s ill-advised carbon tax going into effect across the country, we are seeing record prices — not just rising gas prices us usually happens at this time of year — across the country. The increases are heading west to east and regular gas has hit $1.75 in B.C. these increases are heading here and we’re not that far behind anyway. We need a break.
A proposal that has many proponents is to reduce the federal excise tax on gasoline for the summer travel season. It’s an idea our lawmakers in Quebec and Ottawa should consider since the political promises Prime Minister Trudeau made that his carbon tax would be revenue neutral at the pumps. That of course is not happening.
The urgency for this move is building to crisis proportions. In Montreal, taxes amount to about 30% of the per litre cost of gas. With regular gas at $1.40 that’s almost 37 cents a litre. As much as the carbon tax reasoning is faulty, many of the reasons that were originally used for the imposition of federal and provincial surtaxes no longer exist. In particular, one of the original excuses was the federal budget deficit. This federal government created an articifial deficit. Let it give some real relief back in cutting its own taxes.mthe other reason given for increasing taxes at the pump was investment in alternative energy. Whatever one may think of that goal, it has not been realized either.
What higher gas prices are doing however is compromising what little fragile economic stability most Canadian working families have left. Reports from Statistics Canada as well as commentaries from economic think-tanks of the right and the left — such as the Fraser Institute and the Centre for Policy Alternatives -demonstrate that not only are some one-third of urban households living below the poverty line, but that almost a third of working Canadians are classified as “working poor” surviving paycheque to paycheque.
It used to be a rule of thumb that working households should not spend more than a quarter of their gross income on housing costs. That average has been long abandoned. Today most spend 30-40% on housing costs. With prices at the pump rising almost 30% over the past six months, most people are spending $250 a month – at a minimum – just to keep themselves mobile enough to get to work. That’s $3,000 a year or almost 8% of average household after tax income in this country. With prices expected to rise another 12% through the summer, that would mean 11.5% of working families gross income will go to gas prices alone. At that rate it may well be the straw that breaks a very weak camel’s back.
It is often discussed how energy prices affect our industrial competitiveness. But how competitive will we be if workers – hit hardest by the cost of fuel because they typically drive longer distances in old-model cars — run short of money to get to work? Consumers will have to cut somewhere else because they have to get to work. The question is where will they cut in their personal budgets and how badly will that affect their standard of living. It’s just not fair! The fedral government should act now to ease the pressure on working men and women and easing the tax pressure at the pumps is one of the most effective ways of doing it.