By Jack Mintz, May 30, 2022
Conservative MP and leadership candidate Pierre Poilievre certainly knows his retail politics. With our sky-high inflation tax of 6.8 per cent April-to-April, consumers are feeling the pinch — especially with gasoline, which is up 33.6 per cent. Poilievre is calling on federal Minister of Finance Chrystia Freeland to adopt a temporary holiday from paying fuel excise tax, carbon tax and GST this summer. Worth about 22 cents per litre, such a cut would be very popular, especially with truckers, commuters and vacationers. Since well before becoming an independent director of Imperial Oil in 2005 I’ve been arguing we should turn the federal fuel excise tax into a broad environmental tax.
Some governments have already started cutting fuel taxes. Alberta has suspended its fuel excise tax from April 1st to June 30th. And since gas prices won’t be coming down any time soon, don’t be surprised if it extends that. Ontario’s PC government has pledged a 5.7-cents-per-litre cut in gas tax starting July 1st, which is one election promise they will surely keep.
Critics argue that the loss in gas-tax revenue adds to the deficit or could be better used for other purposes — as they also do whenever someone proposes a tax cut to shrink the size of government. But if the proposal is to expand government by raising spending, somehow the deficit is no longer a problem or the proposed spending has big offsetting multiplier effects.