April 30, 2002

CAA opposes 10 cent fuel tax to fund Kyoto accord

Ottawa, Ontario – In a letter to Finance Minister Paul Martin yesterday, the Canadian Automobile Association urged the federal government not to apply an extra 10 cent per litre tax burden on Canadian motorists to pay for the Kyoto Climate accord and asked that the government honour its promise that a carbon tax would not be imposed on Canadians.

“Throughout the federal climate change process, CAA has opposed the implementation of fuel taxes to address reductions in greenhouse gases,” said Elly Meister, Vice President of Public Affairs and Communications and member of the Transportation Table on Climate Change. “A 10 cent per litre tax will not change driving behaviours of motorists and to impose this additional charge on Canadians to pay for the implementation of Kyoto is unfair.”

Canadians already pay a 10 cents per litre federal excise tax and GST on gasoline as well as provincial and in some cases municipal taxes. An increase of 10 cents would bring the federal tax to 20 cents and increase the overall tax portion to approximately 39.5 cents (based on Ontario tax costs).

Meister says, “Increased fuel taxes would also have a major effect on transportation costs. Not only on consumer goods through increased truck transportation costs but also increased airline costs to business and leisure travellers as a result of increased jet fuel costs.” It is estimated that every one-cent increase in fuel costs Canadian airlines $1 million per day. A 10-cent increase would cost airlines $10 million per day with these costs all being passed on to the consumer.

The CAA has asked the Minister of Finance to ensure that a new tax dedicating funds to implementation of Kyoto is not instituted.

The CAA is a federation of 11 automobile clubs serving over four million members through 130 offices across Canada.

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