Dan McTeague.
Nelson Zandbergen
Farmers Forum
OTTAWA — As soaring fuel prices squeeze motorists and farmers across the country, governments are raking in billions of additional fuel-tax revenues at the pumps. Prime Minister Mark Carney’s recently announced temporary federal excise tax cut — 10 cents on gas and 4 cents on diesel — falls well short of relieving consumers of the windfall Ottawa has enjoyed at their expense since war broke out in the Middle East, energy expert and former MP Dan McTeague points out.
Carney’s excise tax cut comes into effect on Monday, April 20, and lasts until Labour Day. “Yeah, temporarily,” scoffed the Canadians for Affordable Energy president.
When you account for the 13 % HST that remains in place on elevated fuel prices, both the federal and the Ontario governments are “still making a hell of a lot more money than before the war began,” McTeague said.
Ottawa and Toronto divide the HST spoils on a 5 % to 8 % split. Carney should “talk to his buddy Doug Ford” about addressing that tax, he said, although neither Ottawa nor Toronto has indicated a willingness to cut more at the pumps.
“So you’re not giving us anything more than what you’re taking in, what you’re raking in,” he said of Carney’s latest move.
Ontario alone is pocketing $15- to $20-million more per day in extra HST revenue resulting from the higher fuel prices, according to McTeague.
For its part, the federal government is expected to collect more than $9 billion in extra tax revenue this year because of the oil-price spike, including taxes generated by more profitable Canadian oil producers, according to the Official Opposition Poilievre Conservatives. That’s almost four times more than the $2.4 billion the government will lose after cutting the excise tax.
Although modest and temporary, the cut does follow a trend of lowering taxes at the pumps recently. Last year, Carney eliminated the hated consumer carbon tax (17.6 cents per litre on gas and 21.4 cents on diesel), and Ontario Premier Doug Ford made permanent a COVID-era cut in provincial fuel taxes (5.7 cents on gas and 5.3 cents on diesel). Despite these reductions, McTeague estimated that Ontario motorists still pay more in fuel taxes than their U.S. counterparts, with the possible exception of California.
He also highlighted the increased cost of fuel driven by a weak Canadian dollar. And for that, he said, we can thank “net zero nonsense” policy decisions that have undermined the Canadian oil patch over the last decade. Where the Loonie was once a “petrocurrency” that strengthened with high oil prices, reaching par with the U.S. dollar as recently as 2013, that doesn’t happen anymore. McTeague said today’s low dollar currently adds 35 cents per litre to the price of gasoline as a result. “138 (Canadian) pennies to buy one US dollar has really sapped, really eroded our purchasing power and turbocharged inflation in this country.”
