The Canadian Taxpayers Federation is launching its annual campaign against gas tax "gouging," while a gasoline industry watcher says Canadians are facing record-high prices at the pump.
Michael Ervin of Calgary's M.J. Ervin and Associates told CTV.ca that Canadians are paying the highest prices he's ever recorded in his weekly pump price survey.
In the weekly result released Tuesday, Ervin found an average price of $1.29 per litre, up 3.9 cents over the May 7 average.
To compound that bad news, Ervin said Canadians can expect to pay another 10 to 15 cents per litre in the coming weeks as summer driving season starts.
Ervin said up until now, "gasoline prices have been moving up generally in line with changes in the price of crude oil."
The price for light, sweet crude on the New York Mercantile Exchange hit almost $127 before sagging. The mid-day price on Wednesday was US$124.75 per barrel for the June contract.
But refined gasoline is facing reduced inventories across North America, "and like any other commodity, low inventories spell higher prices," he said.
While it's cold comfort for motorists, prices could have been poised to rise even higher than the predicted 10 to 15 cents. But demand for gasoline is slightly less this spring than in recent years and that will temper the increase, Ervin said.
Ian McLellan, the vice-president of Energyshop.ca told CTV's Mike Duffy Live that the price of oil is dragging natural gas prices up as well.
He said that the average Canadian could be paying an additional $300-400 a year to heat their home with natural gas, based on rising prices.
Gas taxes
Of the $1.29 average pump price, 33.5 cents goes to governments in the form of taxes, according to Ervin's survey.
"We're trying to raise awareness of the tax component of the pump price," John Williams of the Canadian Taxpayers Federation told CTV.ca.
His group has found that taxes account for 28 per cent of the pump price. And unlike taxes on regular consumer goods, gas taxes are buried in the price, he said.
To drive that point home, the federation reimbursed some motorists the taxes they paid on a fill up. In Toronto, one motorist got back $12 on a $40 fill.
Williams admitted the general run-up in gasoline prices is driven by the soaring cost of crude, not taxes.
"Part of it is to redirect some fire at members of Parliament who are quick to denounce Big Oil for price-gouging, but rarely if ever talk about gouging coming from Big Government," he said.
In the House of Commons' question period on Wednesday, NDP Leader Jack Layton attacked the Conservative government, saying it had no strategy for dealing with rising gas and food costs.
Prime Minister Stephen Harper said his government provides no subsidies to oil companies and has cut taxes for businesses and individuals.
On Mike Duffy Live, Jason Kenney, the secretary of multiculturalism said that the Conservatives had already cut gas taxes by reducing the GST by two percentage points.
"The reality is though, that the bulk of the prices . . . at the pump is a consequence of international market pricing," Kenney said. "Frankly, there isn't anything any government can do to stop that increase in price."
The proposal
The federation proposes:
- Eliminating the 1.5 cent/litre "deficit elimination tax";
- Removing the GST (and HST where applicable) charged on federal and provincial gas levies; and
- Reducing the federal levy an additional 2.5 cents.
Taken together, that would cut the tax burden by five cents per litre.
A Strategic Counsel poll for CTV and the Globe and Mail found that 57 per cent of respondents would like to see the gas tax reduced.
Some provincial branches of the federation are also calling for all of gas tax revenues to be directed towards roads and transportation infrastructure.
Manitoba and Saskatchewan already do that, Williamson said.
