Travel and Taxation.

Author:Neilson, Hugh

In his 1966 song "Taxman", then-Beatle George Harrison sang the line "if you drive a car, I'll tax the street". While that may exaggerate our tax system, taxation of travel takes many forms. One form of travel taxation is via road tolls. Highway 407, Ontario's only Express Toll Route, is not presently delivering revenues to the provincial government (it was transferred to other owners in 1999 by a 99 year lease). However, 40% of it is owned by the Canada Pension Plan Investment Board, so some tolls still reach government coffers. Other provinces have occasionally imposed tolls to pay for certain road and highway construction costs, but this has been relatively rare.

That's not to say that travel costs have escaped the attention of the Taxman.

Fuel Taxes

Both the provincial and federal governments impose fuel taxes. A significant portion of the price of fuel represents various taxes. In recent years, several provinces have implemented carbon taxes. The Federal government will impose a carbon tax on those provinces which have not implemented their own, commencing in 2019. In addition, the GST/HST (5% in non-harmonized provinces) is also included in the price at the pump, which applies to both the sales price paid to the gas station and the other taxes already included.

In 2019, a combination of taxes will apply to fuel:

* a Federal excise tax of 10 cents per litre will apply to gasoline (4 cents for diesel) across the country;

* provincial fuel taxes (13 cents per liter in Alberta); and

* carbon taxes (6.73 cents per liter on gasoline and 8.03 cents on diesel in Alberta; a Federal carbon tax of 4.65 cents per liter for gasoline and 5.48 cents per liter on diesel fuel will apply in Saskatchewan, which has refused to follow the Federal plan, and is challenging it before the courts).

A price of $1.25 per liter at the pump would also include 5.95 cents of GST, bringing the total tax cost at that hypothetical retail price to 35.68 cents for gasoline (28.5% of the total) in Alberta, or 30.66 cents for diesel (24.5%). These amounts vary by province, but a significant portion of the price at the pump makes its way to the government.

License and Registration, Please

The provinces also manage the registration of vehicles, and the issuance of driver's licenses, collecting fees for these services. Whether there fees are "taxes" depends on one's perspective, but the funds find their way to provincial revenues. In some provinces, such as British Columbia...

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