Uber Canada is criticizing the federal government's move to require ride-hailing companies to pay 13 per cent HST as bad for business, customers and the environment.

The change was announced in Wednesday's federal budget and is set to go into effect July 1.

"This new tax on innovation would hurt over a million Canadians who use ride-sharing to earn income and get around their cities," said Uber Canada general manager Ian Black in a statement.

Josh Dannenberg

Josh Dannenberg says he won't mind paying HST on his Uber bill. (Steve Fischer/CBC)

"At a time when Canadians spend far too much time stuck in traffic ... we should be supporting policies that make sustainable transportation more affordable, not more expensive."

But an Uber driver interviewed while waiting for fares near the Ottawa International Airport had a different take. 

The man, who did not want to provide his name, told CBC he didn't think the added tax will hurt business.

"I don't know how much people pay for their taxis, but it will still be cheaper [to use Uber] just based on my gut, because taxis pay much more for their commercial car insurance," the driver said.

Taxi companies wanted level playing field

Hanif Patni

Hanif Patni is president and CEO of Coventry Connections, an Ottawa taxi dispatch company. (Steve Fischer/CBC)

Hanif Patni, president and CEO of Ottawa taxi dispatcher Coventry Connections, said he's pleased with the decision to charge HST for ride-hailing companies like Uber, which forced its way into the local market in 2014.

"What we have always said is we want a level playing field where they have the same regulations that we have and they have to pay the same taxes that we have to pay," Patni said.

Josh Dannenberg, who uses both Uber and traditional taxis, said he's fine with the new tax.   

"Everything else is taxed and Uber is pretty much just like taxis," he said. 

But another Uber rider said the tax will make Uber less appealing.

"I think it's a little disappointing because we use it because it's cheaper," said Annalee Yerxa.

The new tax on ride-hailing services won't add much to federal coffer, with just $3 million in extra revenue predicted in 2017-18.

Annalee Yerxa

Annalee Yerxa says she's disappointed her Uber bill will soon include HST. (Steve Fischer/CBC)