May 1, 2006

Proposed tax reduction can save money and emissions, report says

Ottawa, Ontario – “Drive Green: Company Car Tax Shift”, a new proposal from the David Suzuki Foundation, would change the way company cars are taxed in Canada, and save employees and businesses money on gas and taxes while reducing greenhouse gas emissions.

Drive Green would enable employees who drive fuel-efficient company cars to enjoy a tax reduction, while those who choose gas guzzlers would be taxed at an increased rate. Under current tax rules, employees who receive company cars pay additional income tax based only on the cost of the vehicle.

“It’s a relatively simple policy since it involves changes to existing tax rates,” says Pierre Sadik, a senior policy advisor with the Foundation. “All the institutions and mechanisms required to carry out the policy are already in place.”

The Foundation’s analysis found that in Canada, other benefits to Drive Green would include a reduction in fuel costs for businesses and employees who use company cars, and the avoidance of job loss in Canadian automobile assembly plants, while retaining current income tax revenue. The proposal is modeled on a successful program in the U.K. that reduced carbon dioxide emissions by more than half a million tonnes in its first year.

A recent survey of industrialized countries found that Canada’s greenhouse gas are two times higher than the average, and major smog-causing air pollutants are two to three times higher. Among 30 leading industrialized countries, Canada ranked 26th in greenhouse gas emissions.

Connect with