Evidence of meeting #51 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was measure.
A video is available from Parliament.
Ontario Director, Canadian Taxpayers Federation
Yes. I don't have the specific B.C. numbers with me, but for the average Canadian, at least with the federal gas tax, they pay an extra $330 a year if they're filling up a sedan once a week.
If you're filling up a pickup truck once a week, it's about $500 a year. If you're filling up more than once—if you have a long drive to and from work—you could be paying close to $1,000 a year if you are filling up your pickup truck twice a week.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I think I saw that when you did the 63¢ a litre, it works out to an average of $40 in taxes. Does that ring a bell?
Ontario Director, Canadian Taxpayers Federation
Yes, absolutely. That sounds about right.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
We charge GST on top of those taxes. Is that correct?
Conservative
Ontario Director, Canadian Taxpayers Federation
Yes, absolutely. I'm a bit more familiar with the Ontario numbers, but here in Ontario, drivers are paying about 2.5¢ a litre just in tax on tax. For some people, it might not seem like a big tax, but the principle of it is that the government should not be charging taxes on taxes that it has already imposed. Also, every dollar counts for Canadians who are struggling to get by.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
The government is telling us that it needs this revenue to be prudent, but the federal gas tax brings in about $6 billion a year. Is that correct?
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
You've said that government should make this tax cut permanent and find the money by cutting spending.
Now, you may have heard us, as Conservatives, talk about more than $6 billion that we've found in savings. We've found $150 billion in potential savings with such things as reducing the size and cost of the federal bureaucracy, cutting spending on outside consultants, cutting corporate subsidies, reducing foreign aid and cutting spending on projects like the government's Alto high-speed rail plan.
Are those reasonable places for government to look for those savings, Mr. Jarvis?
Ontario Director, Canadian Taxpayers Federation
Yes. For years, the Canadian Taxpayers Federation has been calling on the government to cut wasteful spending. You've named a few areas that we've been calling on the government to cut spending on and—
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I'm sorry. I'd like to cede my time to my colleague.
Richmond—Arthabaska—des-Sources, CPC
Thank you very much.
Madam Chair, I would like to move a notice of motion. The motion is as follows:
That the committee report to the House that it calls upon the government to save Canadians money on the cost of diesel by immediately adopting measures to remove all taxes on the production of diesel.
Liberal
The Chair Liberal Karina Gould
Okay. We'll go to a vote.
Do we need a recorded division, or can we agree to adjourn debate?
Liberal
The Chair Liberal Karina Gould
Okay. We will have a recorded vote on the motion to adjourn debate.
(Motion agreed to: yeas 6; nays 4)
The debate is adjourned.
We will continue now with Mr. MacDonald for five minutes.
Liberal
Kent MacDonald Liberal Cardigan, PE
Thank you.
I've had at least three different viewpoints on our tax suspension, and I would argue that geography in Canada dictates a lot about our consumption of gasoline and diesel, if that's our choice of fuel. I represent a rural area of the country, so I would ask all the witnesses to comment on how effective a mechanism it was, although we've argued over whether it was targeted or not targeted. In my mind, it's offering relief to those who need the breathing room the most because they live in a rural area. They drive more, so the tax break, because of their consumption, has given them a little better of a break than a broader macro mechanism that we could have put in place.
Each of the witnesses can answer the question. We'll start with the online witness.
Associate Professor of Finance, As an Individual
Thank you.
I was looking at the 2001 paper by Yatchew and No on usage of gasoline by geographic area and other factors, and you are correct. Rural drivers will get much more of a benefit, about 33% more benefit, than urban drivers. This tax relief will have a powerful effect for drivers who are in rural areas and in the north.
Assistant Professor, Department of Taxation, Université de Sherbrooke, As an Individual
Certainly, the benefit is proportional to the distance travelled. So, if you travel longer distances, you benefit more.
What happens, unfortunately, is that it benefits not only people in rural areas—who may be disadvantaged and therefore need it more—but everyone who drives more. Some live in rural areas, but that is not the case for everyone.
So, in this case too, we lose some of the targeting by opting for a measure with such broad application.
