Nfld. & Labrador

Hidden gas taxes gouging Newfoundland drivers: advocacy group

The Canadian Taxpayers Federation says that charging HST on top of already-taxed gas mean drivers in Newfoundland and Labrador spend an extra $35.8 million at the pump each year.
Newfoundland and Labrador consumers pay both a federal and a provincial gas tax, and then HST on both. (CBC)

A national advocacy group says that hidden gas taxes mean drivers in Newfoundland and Labrador spend an extra $35.8 million at the pump each year.

The Canadian Taxpayers Federation is calling on government to stop charging HST on top of federal and provincial gas taxes. The federation says that drivers spend an extra three cents per litre as a result of this tax-on-tax, or around $1.80 per fill-up.

"You're paying tax on top of these other taxes, and that's resulting in windfall for the government," said Kevin Lacey, Atlantic director with the CTF.

"Newfoundland drivers are paying some of the highest gas prices in all of Canada. The government has rigged a system where they're maximizing the amount of tax they're hitting drivers with at the pumps," Lacey said in an interview.

For every litre of gas there is a 10 cent federal gas tax and a 16.5 cent provincial gas tax. Because HST is charged on top of the already-taxed gas, the CTF says that drivers spend an extra $35.8 million over the course of a year.

If the proposed two-point HST hike comes into effect in 2016, this extra HST will increase to around four cents per litre.

The group also wants the federal government to eliminate a 1.5 cent per litre "deficit elimination" gas tax, which was introduced in 1995 as a means of balancing the budget. Although the budget was balanced in 1997, the tax has remained in place.

"With the federal government now in a balanced budget situation they can afford to remove this tax, which was supposed to come off once the books were balanced," said Lacey.

The federal government recently announced a balanced budget for 2015.

The CTF is encouraging people to contact their local MPs and MHAs and demand the tax-on-tax be removed.

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