Madam Speaker, it is a pleasure to rise today to speak to the Canadian Alliance motion, which reads as follows:
That, in the opinion of this House, Canada's infrastructure needs should be met by a regime of stable funding; and that accordingly, this House call on the government to reduce federal gasoline taxes conditional on an agreement with provinces that, with the creation of this tax room, provinces would introduce a special tax to fund infrastructure in provincial and municipal jurisdictions.
As I address this motion, I want to bring just a few facts to the attention of the House and to those Canadians who are following this debate.
Currently the federal gasoline excise tax is 10¢ per litre. In 2001-02, the federal government collected $4.7 billion in revenue. Some people believe that the gasoline tax is a dedicated tax for roads, or that it used to be. In reality, the Canadian federal gasoline excise tax has always gone to general revenue. The original purpose of the tax was to increase the government's bottom line and discourage consumption.
In 1975, it was finance minister John Turner who introduced the gasoline excise tax as a measure to “encourage immediate conservation”. Subsequent increases were instituted as revenue raising measures to control the deficit and the debt, the most recent of which came in the 1995 budget, which I will quote from:
To help meet the deficit targets, the budget announces increases in taxes on business and an increase of 1.5 cents per litre on the excise tax on gasoline.
The Liberal government has bragged for years about having eliminated the budget deficit, but it has remained all too happy to continue to collect the excise tax to fatten its own spending sprees. It should be noted that under the former finance minister's watch, Canadian consumers have been and continue to be gouged at the pump by a tax that has outlived its purpose.
Here are a few facts that illustrate how the Liberals have been ripping off Canadians on the gasoline excise tax. Motorists, as I mentioned before, have paid $4.7 billion in excise taxes in the year 2001-02. They paid $2.25 billion in GST on the gasoline in that same period of time. So they paid a total of $6.95 billion in federal gas taxes and GST on gasoline in the year 2001-02.
One of the most interesting parts of this little list of facts is the fact that $329 million of that total amount of taxes paid to the federal government is GST on the excise tax. That is a tax on a tax. That is the Liberal way of tax fairness. That is the Liberal brand of honesty. Not only does the government continue to collect a tax that has outlived its stated purpose, but it adds insult to injury by taxing the tax. That gives the taxpayer a double whammy and the government does it with this little tax called GST.
The GST, as it is commonly known, is properly the goods and services tax. It is a tax carried on by the government in spite of its campaign pledge to scrap the GST. It is a tax placed on consumer spending. It is designed to tax spending on the purchase of material goods. It taxes things like boats, cars, furniture, clothes and food and just about anything we can carry home and some things that we cannot.
The GST also taxes service charges. Repair services of all kinds fall into this category. Again it is a tax on services received by a consumer. It taxes something that is being used by the consumer but at least the consumer is receiving something to his or her benefit, and in a sense that benefit, or at least the expenditure for that benefit, is being taxed.
What benefit is the consumer receiving for meeting the demand of paying an excise tax? It is tax on a tax. How can that be fair? How can it even be legal? Or is it? And if so, why should it be? Why has the public not already revolted on this inequity alone? Does the government think this kind of taxpayer abuse is being fair? Does it think it is being honest? I do not think so.
Many people think that gasoline taxes, especially federal ones, are supposed to be dedicated to roads and highways. As I mentioned earlier, this is a misconception. However, the concept of having this tax designated to highways and infrastructure is one that is well received by the public.
According to a July 2002 survey conducted by the City of Regina, 85% of the respondents strongly agreed that fuel taxes should be spent on highways, streets and roads. Almost 88% of the respondents believed that municipal governments should receive a portion of the fuel tax collected. It is no secret that municipalities across the country, including the City of Regina, have struggled to meet their ever increasing infrastructure demands.
According to the recent City of Regina brief to the Province of Saskatchewan, it stated:
Simply put, cities do not have sufficient revenues to meet the costs of services and infrastructure expected within a city. Cities also have expenditure pressures, particularly for the capital funding necessary to deal with an aging infrastructure.
So the obvious question then becomes, what shall we do? Our motion today, in part at least, attempts to address the issue of the ever expanding infrastructure needs facing Canadian municipalities. It presents a strong suggestion of what we could do. Our leader, the member for Calgary Southwest, has stated:
What we are proposing instead is that the federal government permanently vacate a portion of the federal gas tax, say three to five cents a litre, and allow provinces the option of collecting that revenue. In order to ensure that this money is not used for other purposes, the transfer of these revenues to provinces and on to municipalities would be conditional on signed agreements that these resources would be used for infrastructure.
I hope people understand that this is suggesting that the excise tax be lowered. The lowering of that amount would be designated for the provinces to claim that tax, or they could leave it as a deduction if they wanted to.
What we are proposing is supported by many of the individuals and organizations as evidenced by the following comments which were also in that Regina brief. The Canadian Taxpayers Federation stated:
Gasoline taxes are a user fee and should be earmarked primarily for roadway and highway maintenance andimprovement. In many cases the tax take far exceeds roadway expenditures. In particular, the federal government has reaped the revenue windfall, but has provided only token support for roadway spending. This must change.
Harry Kitchen wrote an article entitled “Municipal Finance in a New Fiscal Environment”. He stated:
Of the alternatives that are generally viewed as possible supplements to—not substitutes for—property taxes, access to a municipal fuel tax would make considerable economic and political sense, especially in large urbanized areas with severe traffic congestion.
One of the problems that we face out in the real world, especially in Saskatchewan, is that the burden for infrastructure and schools falls heavily to those who own property. Property taxpayers are burdened because that is the only area that the municipalities have control over and property taxes continue rise.
Transport Canada stated:
Canada's public road network extends about 900,000 kilometres. Only about 15,000 km are owned and maintained by the federal government, mostly minor roads in parks and on other government property. Some 231,000 km of the national network are owned by provinces and territories...The remaining 655,000 km are owned and maintained by municipal governments, including streets and arterials in towns and cities, as well as the extensive sub-network of rural access roads.
We believe in fiscal responsibility and accountability. Our motion would achieve both these ends and assist our communities in a real and dependable way. I would urge all members of the House to support this motion to give the needed financing to our municipalities in order to support, renew, and maintain the infrastructure so necessary in our communities.