With gasoline prices in the $2 pre-litre range, drivers are looking for ways to reduce their gasoline bill.
Bills that used to run around $60 for a fill-up are around $120 now and rising.
One of the easiest sources of relief from the pain in the wallet is to look at government and the fuel taxes the province and federal government taxes on gasoline.
It’s easy to tell government to reduce the gas taxes and help out drivers, unless one also asks how the extra deficit created by assistance will be financed and when.
The Saskatchewan government budgeted $507.9 million for fuel tax (gasoline and diesel) revenues for this year — equal to about five per cent of total revenues.
The amount of assistance from all levels of government is limited.
In Saskatchewan, the total of federal, provincial, and carbon taxes on gasoline amounts to 39.69 cents a litre. No GST is charged on Saskatchewan gas.
Just as an aside the Saskatchewan driver pays the fifth lowest gas tax rate of 10 provinces with Ontario highest at 46.48 cents.
Incidentally, those high gas prices in Vancouver and Victoria, B.C. are partly fuelled by local 6.5 to 18.5 cent a litre tax levies.
If both senior governments removed the taxes Saskatchewan drivers would still pay around $1.77 a litre for gasoline.
Senior levels of government can assist all of us by exempting municipalities from fuel taxes.
It makes no common sense at all for one government to charge another level of government taxes. Having one government charge another level of government a tax amounts to double taxation.
Yet it is done with our fuel taxes and little is heard about it, although some municipal organizations have complained and lobbied against the unfair practice.
There is no logical reason to charge municipalities the federal or provincial fuel taxes, other than grabbing tax dollars.
The only reason might be to thwart some dishonest employees or municipal politicians from using exempt gas in their personal vehicles. And that would be minuscule compared to the tax relief from an exemption.
The losses in gas tax revenues would be small compared to abolition of the tax, even on a temporary basis.
The best practice to save on rising fuel costs is still likely to reduce the miles of driving.
That may be a hard pill to swallow but it is the hard truth.
The 11-cent a litre carbon tax is minor when compared to the inflated price of gas.
Drivers likely will have to live with that inflated oil price for some years even if the war against Ukraine were settled today.
Russia has become the pariah to the West and sanctions on oil and gas won’t be lifted soon, especially in view of the investments made by the West to provide Europe with an alternate source of oil.
Buying hybrid or electric vehicles isn’t really an option for two reasons: 1) makers can’t keep up with demand; 2) electric vehicle charging stations are still too far apart for confident long distance drives.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
