Opinion: It’s time to cut the big tax bill at the pump

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How much pain will politicians let people feel before they finally cut fuel taxes?

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From the skyrocketing cost of oil to the war in Ukraine, there are many factors that are making it more expensive for families to go to the cabin or take a road trip this summer. But Prime Minister Justin Trudeau and Prime Minister François Legault could provide relief today by cutting the big tax bill at the pumps.

With federal and provincial fuel and sales taxes, along with a carbon and transit tax, drivers pay six different taxes every time they fill up on fuel in Montreal. These taxes add about 65 cents per liter of gas at the pump price, or nearly an extra $50 each time a family fills up their minivan.

The federal government also plans to impose a second carbon tax through fuel regulations in 2023. It will be added to 13 cents per liter to the price of gas by 2030, according to an analysis by Environment Canada.

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Bottom line: Politicians could immediately save drivers a great deal of money by cutting their tax collection at the pumps. That is what politicians all over the world are doing.

US President Joe Biden understands families need relief and is pushing Congress and state governments to suspend fuel taxes.

“With increased tax revenue this year and our deficit of more than $1.6 trillion this year alone, we will still be able to fix our roads and lower gas prices,” Biden said. “By suspending the 18-cent (per gallon) federal gas tax for the next 90 days, we can lower the price of gas and give families some relief.”

with an extra $30 billion in revenue falling into Ottawa’s lap this year, at a minimum, Trudeau could immediately follow Biden’s lead and provide fiscal relief at the pumps. The European Parliament is about to mirror Biden.

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“Europe can no longer afford this inaction, especially in light of recent proposals from the Biden administration across the Atlantic.” said Manfred Weber, who is the president of the political party with the most seats in the European Parliament. “So the EU should follow the US lead and provide some direct relief to European citizens through a similar exemption on fuel taxes.”

Many countries have already cut fuel taxes to ease the pain of inflation.

The UK announced billions of dollars of tax relief on fuel. South Korea cut its gas tax by 30 percent. Germany cut its fuel tax by more than 30 cents per liter of gasoline for three months. The Netherlands reduced its gas tax 17 cents per liter.

“I have used and put in place every tax measure that I can,” Irish Finance Minister Paschal Donohoe said after cutting excise duty on fuel and value-added (sales) tax on electricity.

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India cut its gas tax to “keep inflation low, thereby helping the poor and middle classes.”

Italy, Israel, Peru, Poland, 25 Indian states and union territories, New Jersey, Florida, New York, Connecticut, Newfoundland and Labrador, Ontario and Alberta are also cutting gas taxes.

Cutting gasoline taxes could help solve rising inflation rates.

“While the national inflation rate increased in April, the rate decreased in Alberta,” University of Calgary economist Trevor Tombe said in May. “Falling gas prices due to tax exemption is the reason.”

Today, Trudeau and Legault could help make life more affordable for drivers who struggle to gas up their cars on the way to work. It is time for our politicians to stop playing the waiting game and provide tax relief at the pumps like so many other world leaders.

Franco Terrazzano is the federal director and spokesman for the Canadian Federation of Taxpayers.