August 14, 2002

CAA opposed to proposed new taxes for improved transit

Ottawa, Ontario – The Canadian Automobile Association announced its
opposition to reports that the federal government is considering the
introduction of another tax on gasoline to pay for more buses, subways
and streetcars in the country’s congested cities.

“Canadians already pay a 10 cent per litre federal excise tax and
GST on gasoline as well as provincial and, in some cases,
municipal taxes. The suggested additional tax comes at a time
when the revenues already collected from road users are not
adequately reinvested in Canada’s road and transportation
infrastructure,” said CAA President David Flewelling.

“It is recognized that improvements to transit systems will
require additional funds, but governments must also devote more
funding for road improvements and expansion,” added Flewelling.
“Our primary concern is the need to develop a safe and effective
comprehensive transportation plan for Canada that includes a
national highway policy, adequate funding for our road
infrastructure, fair treatment of the motoring public and equal
consideration for roads in respect to other infrastructure
components. If additional revenues are required, the federal
government should consider dedicating existing revenues from
gasoline taxes, a step they have resisted to-date – before
contemplating new taxation mechanisms.”

According to the CAA, a minimum of 25% of the federal excise tax, or
2.5 cents per litre of gasoline, would generate approximately $13
billion dollars over 10 years that could be reinvested in Canada’s
road and transportation infrastructure.

The CAA urged the federal government to introduce a permanent
national transportation infrastructure program with stable,
reliable funding and long-term planning. The CAA said that urban
transportation planning should be based on factual analysis of current
transportation requirements and projections of future
transportation needs, recognizing the individual’s choice or need
to use private vehicles.

The CAA also cautions that additional fuel taxes would have a
major effect on transportation costs, costs that would be passed
onto consumers.

Connect with