should the fed gas tax be reduced?

[Tim]

Martin says it funds local transit and should not be reduced.

[Neal]

Since the crude oil price has gone up the major oil companies profits are reported to have tripled. That's free enterprise. True capitalism. Charge what the market will bare. If the feds lowered the gas tax do you really believe that the oil companies would pass it on? Ya, right, and George Bush is going to sign the Kyoto Accord.

[Bogie]

Federal Gas tax should be pegged at "x" cents per litre, and remain that way until further budgets come out. Then treated like any proposed tax increase.

That wibble-wobble about justifying because of the transfer to provinces is just political mumbo-jumbo and shell-game. The transfer to the provinces was budgeted well-before the recent gas price hikes. Let's not also forget that there are provincial taxes as well on gas (see below).

This is a share of gas tax, not "fuel" tax. So only gas tax sharing is included in this transfer "promise".

The "Tax on Tax" is killing us.

From the Canadian Taxpayers Federation website:
webpage link here (http://www.taxpayer.ca/main/news.php?news_id=2066)
Ever feel like placing a 9-1-1 call to report a robbery whenever you pull up to the pumps? Gasoline prices have now jumped to a weekly average price of over 90 cents per litre, and have regularly surpassed $1 per litre in many parts of the country.

The pump price motorists pay can be broken down into four components: crude oil costs, refining costs, retailer's profit margin and gas taxes. Depending on the province, gas taxes represent between 30 and 43 per cent of the pump price. On average, taxes account for about 38 per cent of the pump price.

Alberta has one of the lowest provincial gas tax rates at 9 cents per litre. Vancouver’s provincial/municipal gas tax is a whopping 20.5 cents a litre. Quebec’s provincial levy is 15.2 cents/litre, plus motorists pay a 7.5 per cent sales tax on gas, and Montreal drivers are whacked with an additional 1.5 cent tax on each litre of gas they buy. Down east, Atlantic Canadians are hit mighty hard by the 15 per cent Harmonized Sales Tax (HST) at the pumps.

The original argument for imposing higher gasoline taxes was to curb consumption. But consumption has chugged along and so has governments’ tax take. Between 1985 and 2003, gasoline sales steadily increased at an average rate of just over one per cent per year. According to Statistics Canada, retail gasoline sales in 1985 were just over 32 billion litres and just over 40 billion litres in 2004.

In fiscal 2004-2005, the federal government collected $4.5-billion in combined federal gasoline and diesel taxes, an 18 per cent increase over what was collected ten years earlier. One explanation for the rise is the steady increase in gasoline tax rates. The federal gasoline levy increased 567 per cent between 1985 and 1995 – from 1.5 cents per litre to 10 cents per litre.

Many of these tax hikes were sold to Canadians as a way to reduce the federal deficit. In 1995, the year Ottawa’s gasoline tax jumped from 8.5 to 10 cents per litre the hike was labeled a “deficit elimination measure” by then-Finance Minister Paul Martin. Canada’s deficit was vanquished in 1997-1998, but the tax remains and the federal government’s gouging at the pumps continues even with multi-year, multi-billion dollar federal surpluses.

Another contributor to growing federal gasoline tax revenues is the GST and HST (paid in New Brunswick, Nova Scotia and Newfoundland & Labrador). The GST and HST are charged on the full pump price, gasoline taxes included. It is a tax levied on the other gas taxes. And as pump prices climb, Ottawa rakes in even more GST revenues. Between 1996-1997 and 2004-2005, GST revenues from gasoline sales increased from $909-million to $1.2-billion – a 31 per cent increase! At current price levels, the federal treasury will likely pump another $175-million over the next year — bringing total GST revenues from gas to over $1.35-billion.

It is time Ottawa end its gas gouging. This can be accomplished with three easy steps. First, Ottawa should end its GST/HST tax on tax bite. This will lower the price, on average, by 1.5 cents a litre. Next, scrap the deficit elimination tax, which will save another penny and a half. Lastly reduce the federal levy by 2 cents, bringing the total saving to motorists to a cool 5 cents a litre.

Canadians unhappy about gas prices should blame the government – particularly the rascals in Ottawa – because they have the ability to lower taxes. With crude prices and consumption predicted to climb, it is time the federal government give motorists a break at the pump.

[Neal]

I like your suggestion to have a set tax on the gas rather than a percent. Makes sense to me.
Of course you expect that slant on a article from the Canadian Taxpayers Federation. Just like the Canadian Federation of Independent Business or small business or what ever it is. Hardly objective. You don't see them talk about Ralph Klein and the huge money going into Alberta's coffers. But then again Ralphy isn't a Liberal is he? Only the government gouges, not the oil companies. Get even with the government, buy a more fuel efficient car or take public transit when ever possible.

[Bogie]

I like your suggestion to have a set tax on the gas rather than a percent. Makes sense to me.
Of course you expect that slant on a article from the Canadian Taxpayers Federation. Just like the Canadian Federation of Independent Business or small business or what ever it is. Hardly objective. You don't see them talk about Ralph Klein and the huge money going into Alberta's coffers. But then again Ralphy isn't a Liberal is he? Only the government gouges, not the oil companies. Get even with the government, buy a more fuel efficient car or take public transit when ever possible.I realize that a group lobbying for change is usually to one extreme, but their concepts and ideas do strike home. Obviously an extreme critique expects to draw a middle-ground resolution.

But using the excuse that the feds have promised tax transfers to the provinces, before the recent massive hikes in gas prices (and possibly more to come), does not justify raking in the bucks as if they just won the lottery at our expense overall.

Sure, as citizens of a country, we expect to be taxed, but there are limits to what the average family/person can afford. Until recently, the rise in gas prices have been close to inflation, but 50% over the past months isn't compensated by a similar increase in wages/income.

[reiver]

I hate to agree with the Liberals, but they are absolutely correct in that any gas tax reductions will just go into the coffers of the oil companies. Much like how replacing the 14% Manufacturer's Tax with the 7% G.S.T. did not lead to lower prices for consumers.

[Neal]

The gas tax and it's by percent increase has been there for a while. The current sharp rise in oil prices leaves people looking for a way to blame the government for it and the tax seems to be their current focus. All the neo con think tanks and organizations will gladly jump on this to attack any government that is not extreme right. Any government is only a tool used to make things better for big business IMO. Why not, at least equally, go after the obscene profits of the major oil companies. How many billions are enough. It's not that I disagree with your underlying thought it's just that it is too simple to think that if you cut the tax on oil/gas, everything will be better. Let's cut all taxes and eliminate the government altogether. Simple idea, more money in my pocket, but who will build roads run the health care build and maintain urban transit etc., etc.? Do you think that the oil companies will jump in to fill the gap? At least with a government tax some of the money goes back to benefit the population. With the oil companies all you get is feel good commercials which are probably tax deductible. With oil a dwindling resource the worst is yet to come and cutting the tax or eliminating it won't fix the problem. Sure I would be happy to pay less for fuel but how does the government make up for the lost revenue.

[Bogie]

Oh a couple of sore spots with me in those logics.

1. "Much like how replacing the 14% Manufacturer's Tax with the 7% G.S.T. did not lead to lower prices for consumers."

Not a fair comparison at all. I fully disagreed with GST replacing FST (I was in business at that time and having to deal with it). BUT .... the extra cost incurred by all levels of distribution (wholesale and retail), by the GST management, meant that costs could not be lowered. This was a government "greed grab" and a slam on the taxpayers of this country. Anybody who wants to debate GST vs FST I would be glad to carry-on about it.

2. Lowering the taxes on gasoline will not increase costs to the fuel distribution network, like GST did to the product distribution system. Therefore no excuse to raise the price of fuel to compensate, and it would be blatantly obvious. Bad comparison.

By pegging the taxes, federal and provincial, as "x" cents per litre, then any increase in fuel costs will be directly on the shoulders of the fuel distribution system. They become the sole target.

Two wrongs do not make a right. Do not jusify one because of the other - sounds like government/political rhetoric.

[Bogie]

" ... but how does the government make up for the lost revenue."

What lost revenue?
The end does not justify the means.

The revenue is only going up due to increased gas prices. If anything, a set tax per litre will stabilize the system.

[Bogie]

If this logic of justified taxation continues our "tax free" day will land up in November!

[Taz]

I agree Bogie, a set amount / litre makes sense. Is the provincial tax not that way already ? That and they need some kind of regulations in place concerning price changes, the price at the pump should directly reflect what they paid for whats in thier tanks not whay they are going to pay for next weeks gas

[Digiital]

The problem with a set tax is this. Currently we are paying GST on top of the other taxes and cost of gas. So say the cost is $1(minus) GST so the over all price would be $1.07. Now if the set tax is set so say 7cents per L. Then when and IF the gas was ever to fall down to say 70 cents(minus the GST) we would pay 77 cents. Now if we go back and do the tax on tax thing. 70 + GST works out to: 74.9 Either way we always get screwed.

[Bogie]

Provincial taxes are set per litre. The feds "tax the tax" and tax the gas. Price goes up, then so does the federal tax portion. A set federal tax would be stable, not "tax on tax" (which is insane), and not add to the impact of the fuel-source price increase.

Fuel suppliers are "free enterprise" - a necessary part of our society. We are sort of caught between a rock and hard place with that part. But, government taxation is controllable by government. The government is supoosed to be "for the people, by the people". We are "the people", and I haven't talked to anybody that agrees with the method of taxation. Change is required in government thinking and method of taxation.

[Bogie]

When you purchase a product in a retail store you pay provincial sales tax and federal sales tax - but you do not pay GST on PST. This, what should be illegal, "tax on tax" hidden in gas prices is illogical, greed, and a grave injustice to society as a whole. It is mismanagement of our taxation.

[jovin]

Reduction in taxes is a meaningless and insignificant short-term exercise as gas prices fluctuate wildly and will skyrocket in the future. What we need is form of long term control of rampant price gouging. But of course such intervention by the government would be contrary to a free enterprise capitalistic system where only corporate profits count and companies are allowed to do whatever they want. Maybe Trudeau's concept of a national energy program wasn't too far off the mark considering the tremoundous energy resources Canada possesses.

By the way has anybody been noticing the dramatic escalation in the cost of natural gas. Many people will be shocked this coming winter.

[Bogie]

Reduction in taxes is a meaningless and insignificant short-term exercise as gas prices fluctuate wildly and will skyrocket in the future.I fail to see the relationship between fluctuating gas prices and taxes. One is free-enterprise, the other is taxation. The rise in the cost of a litre of gasoline does not affect the costs incurred by government because of that rise (except, of course, the cost of fuel for government vehicles, but that still does not justify the taxation flowing with the price increase). And, it has nothing to do with the fact that the feds are taxing tax!

What we need is form of long term control of rampant price gouging. But of course such intervention by the government would be contrary to a free enterprise capitalistic system where only corporate profits count and companies are allowed to do whatever they want.Such is the conundrum. Your next comment addresses this issue bang on.

Maybe Trudeau's concept of a national energy program wasn't too far off the mark considering the tremoundous energy resources Canada possesses.The power that the energy industry holds over government is scary. Very large corporations raping the resources of our country, for huge profits both inside and outside of Canada, and a government that stands idly by and watches. AdScam pales in comparison.

By the way has anybody been noticing the dramatic escalation in the cost of natural gas. Many people will be shocked this coming winter.It has been talked about, but isn't "immediate" in its affect. We don't need to crank up the furnaces yet, so the press is fairly quiet. It isn't controversial until it hits the pocketbook. Many experts have stated that switching back to oil-fired furnaces will be less costly. Damned if you do, and damned if you don't. I'm on electric heat, well-insulated brick townhouse, and my heating costs are low in comparison. Have a gas hot water tank.

That long overdue recession could be just around the corner.

[Just Doug1]

I like your suggestion to have a set tax on the gas rather than a percent. Makes sense to me.
Of course you expect that slant on a article from the Canadian Taxpayers Federation. Just like the Canadian Federation of Independent Business or small business or what ever it is. Hardly objective. You don't see them talk about Ralph Klein and the huge money going into Alberta's coffers. But then again Ralphy isn't a Liberal is he? Only the government gouges, not the oil companies. Get even with the government, buy a more fuel efficient car or take public transit when ever possible.

Good advice although it is limited in scope.

The most frequent argument I hear about gas prices point to Britian and Europe as comparison.

(Hand raps firmly on door) Hello people?

You can drive from one end of Euro to the other in less time then it takes to leave Ontario.

A jaunt from one end of Canada to another is 7+ 9 hour days of driving.,, same for the U.S.

Not counting ferry waits.

[Neal]

I agree with you Bogie on a set tax and no taxing a tax. But if you think that the Oil Companies work in a free market I would have to disagree. They are a monopoly whether there is one or ten companies. How often do you see the guy down the street raise his price to match the competitor? Sometimes they lower to match. Hardly competition. I have often asked the Shell dealer (one of the few selling diesel in my neighbourhood) why nobody comes to his station? I think his theroy is that if he sells gas at a million dollars a litre he only has to sell one litre and he can retire. People, or their cars, need fuel and driving around while you shop for a better price is silly. I just don't think the free market works in this case. They have us over a 'barrel'. I just find it hard to believe that they have to raise the price every time a hurricane is forming in the Gulf. Especially when the gas is already in the pump and purchased at a lower price. Unless you believe the 'blended price' nonsense. Their recent profits say otherwise. Why not cap their profits?
Don't get me wrong, I dislike paying taxes for sure. I think even if you removed the tax from fuel it would still be too expensive for me. People tend to think that fuel whether it is gas, natural gas, hydro or propane is a necessity of life and they have every right to use what they want. Just ain't so. Maybe, just maybe, the government and some lobby groups are using the cigarette tax logic. Highly tax smokes and some people will stop. Tax the heck out of the gas and maybe people will curb their driving habits. Like driving to the corner store for a bag of milk when you could walk or buying a smaller SUV.
I drive a long way to work and I drive for a living. The overwhelming number of cars on the road with only the driver tells me that the tax and the price of gas aren't affecting too many people....yet.

[Bogie]

Many people are starting to drive less. This is out of "lack of funds", pure and simple. Punishment is not the way to handle this situation. Is "recession" a punishment that we deserve? Go sit in your corner and do without?

Higher taxation on cigarettes is not "punishment" against smokers, but a government doing their job to protect the health and welfare of their people - only after severe and persistent lobbying by anti-smoking groups and the medical profession. If the people did not speak up, then nothing would have happened. Tobacco taxes were an excellent source of income for the government - and still is. This is why our government is by "representation of the people". How often do you communicate with your representative? Even is you didn't vote for that person, they are still your representative. Careful planning segued tobacco taxes into lottery taxes - a previously illegal enterprise.

Because we are such a large nation - the most mobile nation in the world - we need a national energy policy and protection of our natural resources. If we don't take care of home first, we won't be able to help others later. Protectionistic? Yes, most definitely. The U.S. is protectionistic while touting "free trade" between nations. We do need to help our neighbours (US) in a time of crisis, but it isn't "we" that is helping them for their fuel shortages, it is the US companies pumping oil in Canada - our oil - and blackmailing us into paying more or it will all go south where they are willing to pay more. Government protection of our own "home" supply is required, and at a price that is not governed by "supply and demand" in another country. Do you think that the US companies will pack up their bags and go home if we implement a protection of our "at home" pricing? I doubt it.

Remember, for those who are old enough to have experienced it, the "running out of oil" scare, of not too many years ago, that started the gasoline and oil price increases? "The sky is falling" was the hue and cry as Chicken Little ran around fueling the "fuel crisis". Now we are part of the "world energy marketplace" - what a load of bunk. If that was true then global prices would be relatively equal in all participating countries - and they are not. As low as 12 cents per US gallon in Venezuela (gov't subsidized and hurting their economy) to over $5 per litre in others. Canada has the second largest oil resource in the world, but we still pay higher than our neighbours to the south. Hmmmm ... does Saudi Arabia charge almost $5 gallon for their gas to their own people?

http://www.geeksmedia.com/tcm/emoticons/rantswitch.gif

[Mr. Apollo]

No it shouldn't. The majority of oil costs are "refining costs". Any reduction is the gas tax will not be passed on to the consumer. It may for a short time but I'm sure there would soon be an increase in "refining costs" to make up for the reduction.

We are also taxed on postage stamps which is a tax itself. Technically that's illegal too.

Personally I think the Canadian Taxpayers Federation is overrated. After talking with some of them, they see themselves as a huge powerful lobby group. They get a lot of press and complain a lot but don't really have an impact.

[Just Doug1]

A reduction of the Federal Gas Tax can be done at the pumps. The government just has to have the balls to tell big oil to collect it as a percentage of volume sold and forward them the money. And watch/kick their collective arses if they screw around.

[Bogie]

No it shouldn't. The majority of oil costs are "refining costs". Any reduction is the gas tax will not be passed on to the consumer. It may for a short time but I'm sure there would soon be an increase in "refining costs" to make up for the reduction.You've lost me here. What does that have to do with the price of gas? Tax is tax - not profit for the oil companies. They don't lose a penny if taxes are lowered.

We are also taxed on postage stamps which is a tax itself. Technically that's illegal too.Not since our postal service became a separate entity in itself. It is now a service, unlike the US and British postal services that are still government-run. I don't agree with tax on postage, as that should have been preserved as a right of Canadians.

Personally I think the Canadian Taxpayers Federation is overrated. After talking with some of them, they see themselves as a huge powerful lobby group. They get a lot of press and complain a lot but don't really have an impact.Yes, they are a bit pompous, but do you suggest that we just sit back and don't do anything? Just let taxes rise and not speak up in some form of unity? This is why government has become so bloated over time - we are too complacent. Very hard to reverse gov't actions afterwards. The tax income becomes part of the "golden pot" that is drawn from to sustain programs, patronage, and things that gov't shouldn't be involved in.

[jovin]

Here's another example of how gas companies gouge consumers. I drive a car that needs premium gas. I have always paid 10 cents more per litre for premium gas, now it's about 11 or 12 cents. It costs oil companies less than 1 cent per litre above regular gas to produce premium gas. Ye come agin', ye hear!

[Athlon_9800]

They're gouging because they know there's nothing we can do about it. That's all there is to it. The prices are outrageous.

[Bogie]

Here's another example of how gas companies gouge consumers. I drive a car that needs premium gas. I have always paid 10 cents more per litre for premium gas, now it's about 11 or 12 cents. It costs oil companies less than 1 cent per litre above regular gas to produce premium gas. Ye come agin', ye hear!Marketing ....
example: go into Tim Hortons and ask for a tea.
"What size?"
... huh? Water and one tea bag. Put it into a pot, I'm staying here, and give me a mug.
"What size sir - small, medium, or large?".
What's the difference?
"Cost"
Logic completely escapes me.
Say Small, and get free refills of water for the pot, and as many milk "packets" as you like.

Marketing ... you have a car that needs "Premium" ... pay for it or do without ... ping, ping, ping, ping.

[jovin]

Marketing ....
example: go into Tim Hortons and ask for a tea.
"What size?"
... huh? Water and one tea bag. Put it into a pot, I'm staying here, and give me a mug.
"What size sir - small, medium, or large?".
What's the difference?
"Cost"
Logic completely escapes me.
Say Small, and get free refills of water for the pot, and as many milk "packets" as you like.

Marketing ... you have a car that needs "Premium" ... pay for it or do without ... ping, ping, ping, ping.

No, marketing it's not. I don't buy premium gas because TV ads promote its clean qualities, I buy it because my car owner's manual and my dealer say I need it for my motor and to retain the car's warranty. So buying regular gas is not an option for me and I pay the additional premium grudgingly because the premium is a ripoff in light of what additional cost is incurred by the oil companies to produce it.

The point I was trying to make is that oil companies charge whatever they want for gasoline with no correlation whatever to what it costs them to produce and certainly no correlation to the cost of raw oil. With no competition, they can maintain the attitude of charging exhorbitant prices knowing full well that their "rivals" will match them price-wise and even outdo them. It's called gouging of the most obscene kind and the government should remember this when those same companies want tax relief or exemptions for exploration activities or other form of subsidies as they are wont to do (fat chance of that though).

[Bogie]

I think we have a case of miscommunication. I did not mean to imply that "Premium", "Super", or whatever higher grade was just marketing hype, but that the much higher price is.

To increase cost of any product, simply have a better grade of that product and call it something like "Premium", "XL", "XE", "Supercharged", etc. Even if the cost to produce is minimal, charge a lot more to imply a greatly increased cost to produce.

If you labelled gas as Level 1, 2, or 3, it would not have the same psychological impact on pricing.

When I mentioned "ping, ping, ping" I was refering to noise that engines sometimes make when inferior gas is used when you are supposed to use "Premium".

[Yogi]

I didn't read all the responses but a good start would be to kill that temporary so-called "deficit-fighting" surtax on gas. The Liberals had promised to kill it once the books were balanced, and, last time I checked, the books were balanced about 8-9 years ago, (with big surpluses to boot) and we're still paying that damn surtax at the pumps :mad:

[Yogi]

Martin says it funds local transit and should not be reduced.
I'll bet the TTC brass would take issue with Martin on that.

[Yogi]

Here's another example of how gas companies gouge consumers. I drive a car that needs premium gas. I have always paid 10 cents more per litre for premium gas, now it's about 11 or 12 cents. It costs oil companies less than 1 cent per litre above regular gas to produce premium gas. Ye come agin', ye hear!
When I shopped around for a new car last year, one of my prerequisites was that it run of regular gas. We may not be able to control gouging and taxing at the pumps, but hey, I can still choose the car I want to drive so I can save a bit at the pumps. My car give me 240 hp with a V6. I'm amazed at how many similar spec'd cars from other manufacturers recommend premium.

How about just dumping the premium gas car in exchange for one that runs on regular? - seems like a simple enough solution to me.

[jovin]

I didn't read all the responses but a good start would be to kill that temporary so-called "deficit-fighting" surtax on gas. The Liberals had promised to kill it once the books were balanced, and, last time I checked, the books were balanced about 8-9 years ago, (with big surpluses to boot) and we're still paying that damn surtax at the pumps :mad:

I don't think you've been paying close attention to recent Canadian history Yogi. Our currrent federal and provincial governments are hooked on taxes and gambling revenues. They will never, ever relinquish existing taxes and they will continue to expand gambling operations across Canada, which is another form of taxation. Remember the prime reason Chretien got elected the first time? Yep, it was his promise to get rid of the GST. His reward for breaking that fundamental election promise: he got re-elected for a second term. And we worry about voter turnout at election time!

Oh yeah, by the way our income taxes were supposed to be a temporary tax measure enacted during WWI which was supposed to be terminated at the end of the war.

[Mr. Apollo]

You've lost me here. What does that have to do with the price of gas? Tax is tax - not profit for the oil companies. They don't lose a penny if taxes are lowered.
Look at when the 14% manufacturers tax was replaced with the 7% GST. It was supposed to lower costs to consumers but surprise surprise the cost of manufactured items rose about 7% and people ended up paying the same. I believe it was in the 1980s during the recession that the PST on cars was removed temporarily in order to help them sell. Guess what? The price of cars rose and people paid the same. You assume that companies will keep their costs constant in allow the the consumers to reap the benefit of reduced costs. The companies know that people get used to paying a certain price and will then increase their own costs. The companies make more money, the government less, and the consumer pays the same.

As far as the Taxpayers Federation. I don't mind paying increased taxes if I know is going to good use. I don't like some of the recent scandels that have plauged the government. However, I believe in a large, strong, centralized government.

[Yogi]

The "spin" at the time of the GST's introduction (according to Mulroney and his government) was that is was supposed to make the tax "visible" as opposed to the hidden Manufacturers Tax which was "hidden" in the cost of goods and that this was going to be "a good thing".

I never bought into the notion that goods were going to cost less.

Anyone who believed that would be prime candidates for the Nigerian scam.

[Mouse]

I don't give a **** what Martin says.

Leave the money in the consumers pockets. They can spend it more efficiently then big government, any day.

:(

[Tim]

The "spin" at the time of the GST's introduction (according to Mulroney and his government) was that is was supposed to make the tax "visible" as opposed to the hidden Manufacturers Tax which was "hidden" in the cost of goods and that this was going to be "a good thing".

I never bought into the notion that goods were going to cost less.

Anyone who believed that would be prime candidates for the Nigerian scam.
that would be the majority of Canadians who voted for the Tories the second time.

[Bogie]

Oh, I gotta comment on the debate about FST vs GST, but I'll leave that until tomorrow morning :d

[Yogi]

that would be the majority of Canadians who voted for the Tories the second time.
Yup, but I wasn't one of 'em. I wonder if Walter was though?? :d

[jessomine]

Gas 96.7 right now at Sunoco (Cawthra/Queensway) Mississauga. Not hard to fillup these days at that price.

[jessomine]

Look at when the 14% manufacturers tax was replaced with the 7% GST. It was supposed to lower costs to consumers but surprise surprise the cost of manufactured items rose about 7% and people ended up paying the same.



IMHO, the FST wasn't replaced by the GST to lower the prices for consumers (as THEY attempted to convey) nor the amount of tax collected by the government. Changing to GST was really to get rid of the unfair advantage held by importers over Canadian manufacturers. In addition, too many companies were getting on the bandwagon of using loopholes to get huge refunds of FST paid in prior years and lowering what they paid subsequently (and this was not normally passed on to consumers).

[Tim]

some interesting opinions. The one thing that sticks out to me, is that if the government lowers their tax on gas, the gas companies would just swallow that whole, and instead of it going into government, the gas companies get it. So perhaps it's a simple question of which would we'd rather it go to?

[I LIKE EGGS]

Gas 96.7 right now at Sunoco (Cawthra/Queensway) Mississauga. Not hard to fillup these days at that price.

106.9 now, not even 12 hours later. I wonder how that happens overnight.

[I LIKE EGGS]

some interesting opinions. The one thing that sticks out to me, is that if the government lowers their tax on gas, the gas companies would just swallow that whole, and instead of it going into government, the gas companies get it. So perhaps it's a simple question of which would we'd rather it go to?

Exactly....I was just thinking that. If the Gov't lowered by 15%, the gas company would just increase it 15%.

[jovin]

106.9 now, not even 12 hours later. I wonder how that happens overnight.

I think the gas stations use a random number generator every hour for anything over a buck and just display whatever comes up.

[Bogie]

some interesting opinions. The one thing that sticks out to me, is that if the government lowers their tax on gas, the gas companies would just swallow that whole, and instead of it going into government, the gas companies get it. So perhaps it's a simple question of which would we'd rather it go to?In other words, our government has created their own monster - as usual.

This, again, is where a national energy policy is required. Label the energy sector as "an essential service" and regulate accordingly. This would put it under the control of a regulatory body (I know, more expense) that would oversee, and have a say in, any price increases applied for by the oil companies. Like the CRTC does for telephone.

This whole thing is not as simple as that, but I think you get the picture.

If GST was lowered, or actually reformulated, on gasoline, then it is quite possible that the gas compnaies would find an excuse to increase the price by that changing amount, at that time. It would be like a one time shot at the consumer - but only a one time shot. That GST amount would no longer be applicable as a "tax on tax" after that.

So many negative attitudes and lack of solutions. This is typical of any debate or dialogue. This is why nothing happens. People complain, but no viable solution seems to be presented, no plan of action, no solution that is acceptable.

"Tax on tax" is not acceptable - and this must be persistently conveyed to our government through your local representative (MP).

Using "GST" on fuel is not acceptable, as the formula for this tax is based on the selling cost of the product, and that cost also includes provincial taxes that are not a percentage (funny how the provinces could do it but not the feds). A set-amount, not percentage, "gas/fuel tax" should be imposed instead. This "new" tax would become part of future federal budgets and subject to debate in parliament.

It is obvious that the price of gas is "price fixing" on a large scale. Let's not beat around the bush on this one. Differences of Penny here, penny there, is only a smoke-screen to create the illusion of competition.

Fuel is an essential service required for the survival of our society and our economy. It needs to be regulated by our government - the reason for government is "representation of the people". When Bell wants to raise their prices for telephone service they need to go before the CRTC and justify the increase - let's have the same for fuel.

[I LIKE EGGS]

I think the gas stations use a random number generator every hour for anything over a buck and just display whatever comes up.

That or that 36 sided die from the old dungeons and dragons game :D

[I LIKE EGGS]

So many negative attitudes and lack of solutions. This is typical of any debate or dialogue. This is why nothing happens. People complain, but no viable solution seems to be presented, no plan of action, no solution that is acceptable.

Truer words were never spoken Bogie.

[Bogie]

Look at when the 14% manufacturers tax was replaced with the 7% GST. It was supposed to lower costs to consumers but surprise surprise the cost of manufactured items rose about 7% and people ended up paying the same.The poltical rhetoric/spin at the time was to make the tax visible and help vendors lower prices. The government knew this wouldn't happen, and couldn't, as the cost to all levels of distribution just increased by this new replacement tax.

FST was a one time, one level of distribution, tax that required very few people in government to monitor. Only one business had to track and submit this tax collected.

BTW, what is this talk about FST being exempt for importers? FST was charged on imported goods if they were for resale.

Welcome GST .... now every level of distribution has to collect and submit this new tax to a new bloated government department. It now involves each company to do accounting for incoming and outgoing GST. Keep track of how much is charged and track every penny of GST paid-out for business purposes. At the reporting period (varies per business income level) that business must subtarct whatever GST they paid out against GST invoiced/charged and submit the balance to the government.

Now here is one of those new expenses incurred by business. GST owing is based on invoiced or immediately paid for on sales of products/services. If the business invoices a client for $1000 of goods ($70 GST), and the client takes 45 days to pay, the collected GST is payable whether or not it has been collected by the time of the GST submission report being due. If the client defaults, or whatever happens to the sale, then the business can apply for a rebate of the uncollectable amount (you can imagine how long that takes). In other words, businesses are bank-rolling the government GST taxes, and at the business expense. See this part of the picture?

Especially larger businesses had to hire or deligate employees full time to GST tracking. Another business expense that the cost of has to be considered in the selling price of their products/services. Another reason why prices did not drop.

Retailers spent millions of dollars upgrading their cash registers and payment collection systems to handle GST - another cost that could not be absorbed and had to be included in their cost of goods and services. The government finally relented and supplied some funds to assist in this process, but far from enough, and you know who paid for that!

The "coup de grace" ....
Independent business people and businesses submitting their GST returns do not properly track their GST paid to minimize their GST submitted. This has meant many millions of dollars in extra revenue for the government. The system is so complex and time consuming that the 7% is really much higher, and even the government was pleasantly surprised at how much extra was flowing into their coffers. You know how the government likes to see "extra" money and what they can do with it (Adscam ring any bells?). It is like a kid in the candy store with a pocket full of money.

Anybody who is in business can relate to above. Anybody who is not, read and be educated.

Anybody who is in business also knows about their tax returns and applying the vehicle expenses "formula" to reduce your taxes owed. It costs more in time and effort to tally it all up than what you could get back - and even then it is questioned, and sometimes audited, by the government. Most people I know, in business have just given up on trying to submit that part. Again a lot of tax dollars that should be going back to individuals and businesses is staying in government hands ... and the tax money monster is still hungry.

Business accountants are smiling, as their billings to submit small business tax returns for their clients escalates every year due to tax complications.

[jessomine]

BTW, what is this talk about FST being exempt for importers? FST was charged on imported goods if they were for resale.


Bogie, I didn't say that imports were exempt from FST, I said importers had an advantage.

[Bogie]

Bogie, I didn't say that imports were exempt from FST, I said importers had an advantage.
OK, where did importers have an advantage? I was an importer back in the days of FST, would have preferred to buy in Canada, but only imported because of product selection or not available in Canada at all - not cost (cost was actually higher because of protective duties at that time, pre-free trade).