Mr. Speaker, that is good news. I would like to commend the member for Ontario for this initiative. I suppose we are all affected by the price of gasoline, not only those who own vehicles. There are many people across the country who are dependent on fuel in vehicles in order to bring all the goods and services to them in order to enjoy their standard of living.
All across the country people are dismayed at the cost of gasoline. Just the other day I told someone that had the government not pushed us into the metric system I sincerely doubt that we would be very excited about the cost of gasoline because it would be in the neighbourhood of $2.40 a gallon. I believe most of us would say that is excessive. We would object to that high price and yet that is approximately what the price is. By the way I think it is considerably more, probably about 80 per cent more, than the cost per gallon in the United States. Then of course, we would have to make adjustment for the difference in the dollar and the size of the gallon. But there is a tremendous difference in the cost of gasoline.
It is a shame that gasoline should be so highly priced. Living in the very harsh climate which we have in the north part of the northern hemisphere, we are really dependent on fuel and the energy it provides. We are also a very sparse country. It is not easy for us to get around without a vehicle.
I want to share a personal story with the House that I hope members will find interesting. Some 26 years ago we moved into the country about 20 miles from the nearest town.
When I lived in the city I used my bicycle to go to work. It was a 6.8 mile trip every day. I always felt good about using my bicycle. I saved pollution from entering the atmosphere and I saved costs. Believe it or not, I was able to travel about one-third of the width of the city of Edmonton in about the same time as I could if I used Edmonton's so-called rapid transit system. I was in very good shape in those days. Members think I am probably still in good shape, it is just that my shape has changed. It was also very good exercise and a great thing to do.
When we moved to the country I drove my bicycle but once because it took too long. It was a two hour trip each way and I did not have four hours a day. I wish now that I would have kept it up because I would have been in such fine condition. Unfortunately I bought a two wheeler with a motor and it does not take that much energy to shift the gears on a Honda motor bike.
Getting back to the price of gasoline, one of the reasons I used this motor bike to go to work after we moved to the country was the cost of fuel. In those days we had vehicles that were not quite as energy efficient as they are now. I bought a little motorcycle that delivered for me some 100 miles per gallon. I was able to save a great deal of money even in the days when fuel was only about 20 to 25 cents a litre by using my motor bike instead of my large car.
Since then gasoline has gone up in price so it is now between 50 and 65 cents a litre across the country. I was totally appalled in Saskatchewan recently to see the prices there were edging close to 62, 63 cents per litre in some places. That is excessive.
We must recognize that is a damper on our economy. We must recognize that the high price of fuel makes it less easy for our businesses and individuals to be competitive with the rest of the world.
Although the member for Ontario has fine intents in limiting the way fuel companies can cause the price of gasoline to fluctuate, I must come back to a theme which is very dear to my heart. What is the cost of gasoline? Where does the total cost come from? Whether we like it or not, a very large part of the cost of gasoline is due to taxation.
I made a little chart a little over a year ago, and the prices have changed somewhat, but I do not think the percentages will have changed that much. The price of fuel by the time it reaches the retail level is made up of approximately 30 per cent, crude cost, about 25 per cent federal tax, about 25 per cent provincial tax, between 20 per cent and 25 per cent refining and marketing costs, profits, and then there is retail margin for the retailer.
I do not know if members realized that provincial tax is around 25 per cent, although it varies from province to province. In Quebec it is around 36 per cent. Federal tax varies from province to province as a percentage of the total price because the total price varies from province to province, but it is around 25 per cent federal tax.
I object that this government, like governments before it, uses fuel as a source of revenue. I really do not believe that taxing fuel, which is such a necessary commodity in order for us to compete on a worldwide scale with our industry, with our agriculture, with our tourism, is justified or valid. We should not be taxing fuel as a source of revenue. It should not be singled out from other products for additional taxes.
Approximately $4 billion per year is taken out of our economy and put into government coffers through the federal sales tax on gasoline.
I have to add another thing. When it comes to gasoline, the federal government has displayed an odd characteristic in that it is adding a tax to a tax. After the federal sales tax is added to the gasoline which would bring the price in most provinces to around 50 cents, then it adds the GST. The government actually charges GST on the total price, which means the government is charging GST on the federal sales tax. It is unconscionable to force Canadians to pay taxes on the taxes they pay with money they have earned on which they have already paid income tax.
In that regard, I did a little computation. Follow this. I earn $3.33. My marginal rate of income tax, both when I was an instructor at the college before I came here and now, is about 50 per cent but overall I used 40 per cent. From the original $3.33, I pay 40 per cent or $1.33 in combined provincial and federal income tax. That leaves me with $2. I go to the pump to buy gasoline. The total provincial and federal sales taxes is around 50 per cent of the price at the pump, which means if I buy $2 worth of gasoline, I pay another $1.
What I got was $1 of gasoline in my tank. That is the worth of it, with $1 being tax and $1.33 being income tax that I paid in order to have the $2 when I went to the pump. In total, I earned $3.33. In order to buy $1 of gasoline, I paid $2.33 in tax. That is not acceptable. It is too high a rate.
While the member's bill is well intentioned, the much more important thing for us to do as parliamentarians is to bring government spending under control so that we can reduce our demands on the taxpayer's purse and reduce taxes. I would begin with a reduction in the fuel tax. What a tremendous boost that would be to our economy. What a job builder that would be. What a relief it would be to Canadian families who find it difficult.
I have appreciated the opportunity to comment on this bill.