Okay, so everyone is fuming over gas prices. The gas stops are yelling "Don't blame us! We barely make any money! The price is all taxes and cost of gas from the distributor!" To which I ask why the pump prices fluctuate by the hour. Neither taxes nor distributor costs could be changing that rapidly.
The Distributors all cry "Don't blame us! It's the taxes!" Again, taxes don't fluctuate at the rate to explain the price increases.
So if no one is to blame, who's making off with all the money? Also I'm a little confused about the taxes. Aren't the pump prices subsidized somewhat in Canada? That's why it's so much cheaper here than in the EU. Why is the government taxing its own subsidy?
Canadian taxes on average are 30-40% of the cost of gasoline at the pump; this is dependent on what province you live in. Generally the Feds take 10% and another 5% with the Goods and Services Tax. So every time gas goes up 10 cents the government gets $150 million dollars (ref: 3rd link), but you have to remember that this money goes towards road maintenance and safety issues.
The rest of the price differences is attributed to transportation and product manufacturing costs...and corporate posturing
Oil and gasoline companies get billions $$$ in tax benefits and breaks from the government. (Ecojustice or Canadian Centre for Policy Alternatives, Green, NNDP have rants on this)
But one thing that I never understood.. road upkeep and maintenance (the reason for the immense taxes on gas) should be a fixed cost... there should be a cap on how much tax can be charged on gas... I mean as gas prices continue to rise, that is all $$ straight into the coffers to be wasted somewhere else). At any rate, I'm sure the government can do TOO much about the wastefulness when it comes to taxes, but perhaps there should be additional income tax reimburrsement for all recepits with gas being over $1.00/litre or something?!?
The costs of road maintenance do rise with the cost of oil (asphalt is a petroleum based product), so that explains part of it. The other part is that it's another opportunity for our government to screw us.
While it's true that gas taxes help with the cost of maintaining roads, by no stretch of the imagination does all the funds collected get re-invested into roads or infrastructure:
In the 2007-08 fiscal year, Ottawa collected $5-billion in gasoline and diesel taxes (not counting GST revenues). In 2007-08, the federal government dedicated $1.8-billion to roads and highways (both stats - and those to follow - from http://www.taxpayer.com/main/news.php?news_id=2866 ... I'm not one to use multiple sources or check facts - takes the fun out of ranting)
I'm not very good at math, but it seems to me that 1.8 Billion is less than 5 Billion by a fairly wide margin (in the neighbourhood of 3.2 Billion - or 64 %) ...
And let us not forget that the GST is paid on the 'full pump price' - so it is also on the provincial and federal taxes. Last I checked, the tax on gas, is not a good or a service. But it's been a while since I checked, so maybe I'm wrong on that one ...
And finally ... in 1995, the government increased the gas tax from 8.5 - 10 cents per litre (it was 1.5 cents / L in 1985) in an effort to reduce/eliminate the deficit. Last I checked, the federal budgets have had surplusses for the past decade - the government has collected an additional $6B in additional revenue since then due to the additional tax.
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