Canadian Taxpayers Federation Criticizes Gasoline Taxes Canadian Taxpayers Federation Criticizes Gasoline Taxes

by Mike Godfrey,, Washington

23 May 2017

The Canadian Taxpayers Federation (CTF) has called on the federal Government to end the practice of applying the HST/GST to gasoline after provincial and federal excise taxes have already been charged.

According to the CTF’s 19th annual Gas Tax Honesty Day report, across Canada, taxes make up 36 percent of the pump price for gasoline and 33 percent for diesel. On average, Canadians pay 43 cents of tax on each litre of gas and 36 cents on each litre of diesel.

The survey found that Newfoundland and Labrador has the highest taxes, at 60 cents per litre, with Montreal charging 52 centres per litre. Manitoba, on the other hand, has the lowest gas prices and the lowest tax.

The CTF estimates that federal and provincial governments will collect CAD23.5bn (USD17.4bn) in fuel taxes in 2017.

The CTF also said that the federal and provincial “tax-on-tax” – the application of the harmonized sales tax (HST) or the goods and services tax (GST) on top of fuel duties – will in 2017 cost an extra three centres per litre on average. This is worth an additional CAD1.4bn in revenue, it claimed.

The CTF estimates that the average Canadian pays CAD738 in gas tax each year, with the “tax-on-tax” comprising CAD58 of this total.

The CTF recommended that the GST/HST no longer be applied on top of federal and provincial fuel excise taxes, and that the federal Government reduce gasoline taxes by five cents per litre and diesel taxes by two cents per litre.

It added that the Government should be legally required to spend all revenue collected through gasoline and diesel taxes on roadway-related infrastructure and maintenance, or else reduce taxes. It also argued that the CAD0.015 per litre tax increase introduced in 1995 for use in “deficit elimination” be scrapped once the federal budget returns to surplus.

Published at Mon, 22 May 2017 19:00:00 -0500