THE ISSUE THAT WILL NOT RUN OUT OF GAS
First day back, Tories strike on a Canadian sore spot
Desperation drives men to extreme measures. For example, the first person to eat an oyster must have been on the verge of starvation.
A similar recklessness may have gripped the Conservative party’s morning meeting, where it appears someone suggested that, rather than calling the Liberals names, perhaps the Opposition could instead ask them about their policies.
Behind in the polls and having exhausted all possible parliamentary acceptable euphemisms for “thieving bastards,” the Tories clearly decided they had nothing to lose. The result was that on the first day of the new session, a civilized debate nearly broke out.
The Opposition probed the government’s position on a range of issues, from its sentencing policy, through to the CBC strike to its recent suspension of advanced rulings on income trusts. But the main focus was on the cost of gas, more particularly, the government’s revenue bonanza as a result of soaring prices.
Harper asked the Prime Minister when the government’s “100 days of inaction” would end, and it would cut its fuel taxes.
Paul Martin replied that the excise portion of the government’s tax — 10¢ a litre — does not go up with the price of gas and that 50% of its revenues go to municipalities to pay for urban transit, sustainable development and good roads.
“If what the Honorable Member is suggesting is that in fact that money going to the municipalities should be cut, I think it would be very, very counterproductive,” said the Prime Minister.
Harper countered that every time gas goes up 1¢, the government receives an extra $ 40- million in tax revenue. “It should stay in the pockets of consumers,” he said.
The Prime Minister had an answer for this too, saying that the money doesn’t go into government coffers but into a fund for medical devices set up by Ralph Goodale, the Finance Minister, the last time the Liberals were getting heat for gouging drivers. “We are looking at the same type of thing,” he said.
Peter MacKay, the Conservative deputy leader, also hammered the Liberals on fuel taxes. " The Prime Minister said lowering the gas taxes will not be an answer; that is not what is required. His Finance Minister said the same thing: lowering taxes at the pump will not make a difference. [But] it would make a difference for Canadians,” he said.
Goodale replied that “complexities and volatility” were at play and that any tax break would become “invisible,” by which he meant taxation issues should be left to the Liberal party, the acknowledged experts in spending other people’s money.
The government is relying on consumers becoming so bemused by these claims and counter-claims that, when the Finance Minister stands up and says it’s a really complicated business, they will nod reluctantly and continue to turn out their pockets.
But Harper has hit on a rich vein of discontent that will last as long as gas prices sit north of a buck — and that could be a very long time. People like Ray Hickin, an 84-year-old airforce veteran from Chilliwack, B.C., who lives on a pension of $1,019 a month and just paid $39 to gas up his Honda, are outraged. “Canadian consumers are being subject to price gouging, the leaders in this racket being our governments through tax, on tax, on tax,” he said in an e-mail.
Goodale might claim it’s all very complicated, but consumers are savvy about gas prices. They know that taxes in Canada constitute up to 40% of the pump price, compared to 23% in the United States.
They are subconsciously aware that between 1986 and 2003, the price of gas, excluding taxes, rose 50%, while taxes increased 67%. They vaguely remember that the tax increases were deemed necessary to reduce the federal deficit, including an increase in the excise tax from 8.5¢ to 10¢. It remains even though the deficit was eliminated in 1997- 98.
And the Conservatives have had some success in pointing out that the government charges an additional 7% GST on the pump price of gas, which means the tax is levied on the10¢ per litre fuel excise tax, as well as provincial taxes that range from 9¢ to 20¢ a litre. This tax on a tax adds about 1.5¢ a litre to the price.
It may have taken the desperate measure of engaging the government on its policies on the floor of the House of Commons, but the Conservatives, so long criticized for being out of touch, have seized on an explosive issue that the Liberals seem unable or unwilling to defuse.