Business

Uber Canada hits back at Liberal plan to charge tax on rides

Tax policy should support innovation, Uber says, not make it more expensive

Uber Injunction 20160202

The federal government plans to being charging GST/HST on ride-hailing fares as it does with taxi fares. Uber says the tax exemption should apply to both ride-hailing and taxi service. (Ryan Remiorz/Canadian Press)

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Uber Canada says it wants the federal government to hit the brakes on plans to charge GST/HST on ride-hailing fares.

Finance Minister Bill Morneau unveiled the proposed tax in Wednesday's budget.

An executive with Uber's Canadian operations on Thursday called it a "tax on innovation" that would hurt Uber drivers and users.

"At a time when Canadians spend far too much time stuck in traffic — and people should be encouraged to leave their cars at home, take public transit, and share rides — we should be supporting policies that make sustainable transportation more affordable, not more expensive," said Ian Black, regional general manager for Uber Canada, in a statement.

Morneau's proposed tax on Uber and other ride-hailing services would for the first time impose GST/HST on fares, much like they are added on traditional taxi services. The change will broaden the definition of a taxi business to ensure Uber and other web-based ride-hailing services are required to charge and remit the tax.

The change in the definition of a taxi business will go into effect on July 1.

The change would add just $3 million in additional revenue to Ottawa's coffers in 2017-18, but the federal budget suggests the measure is to help level the playing field and create tax fairness.

Uber disagrees with the government's approach.

"Federal tax laws already offer small business owners a break on collecting sales tax, but unfairly exclude taxi drivers," Black said. "The best way to support taxi drivers and level the playing field is to extend the same exemption to them."

Uber said it is hoping for "meaningful" consultation with the government on the issue.

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