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Think the government is screwing us at the pumps? You're right!
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| Fir3start3r |
...scuse me while I pull a Jayx1 here... ;)
I knew it! :whip:
- Amount of tax Canadians pay on a liter of gas? Up to 40% of the per liter price.
- Amount of gas emanating from blowhard (mostly) liberal-leftist politicians? Infinite. (And supplied free at the retail level by liberal media)
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Feds' claims run empty
By LICIA CORBELLA
The federal government keeps on repeating, over and over again, many untruths about the price of gasoline.
Both Prime Minister Paul Martin and Finance Minister Ralph Goodale keep saying that reducing federal gas taxes on a litre of gasoline would have no effect on the price at the pump.
On Monday, Goodale said any tax break of one to two cents per litre would become "invisible".
On another occasion he said the decrease in taxes would be "gobbled up" by those greedy oil and gas companies.
Firstly, he's giving the impression to uninformed Canadians that the federal take on a litre of gas is one or two cents. It is not. It is much higher than that.
The feds get 10 cents for every litre of gas sold in Canada PLUS they charge the 7% GST on the entire cost. In other words, they tax their tax and provincial taxes too.
So if a litre of gasoline costs $1 at the pump, the feds would take 16.6 cents per litre. Coupled with provincial taxes, some jurisdictions pay as much as 40% of the cost of gas to taxes.
As Conservative Party Leader Stephen Harper said in the House of Commons Monday, for every one-cent increase in the price of gas at the pump, the feds rake in an EXTRA $40 million in taxes, thanks to the GST -- the tax on tax.
But is Goodale right? Would a cut, of say, two cents a litre just be gobbled up by the oil and gas companies?
Experts, and more importantly, the hard data, say no. What's more, they say the biggest gasoline profiteers are governments, not oil companies.
Cathy Hay, senior associate with MJ Ervin & Associates -- a Calgary-based consulting firm -- says, "once taxes are removed there is virtually no significant variance in the price of gasoline," with a few exceptions, such as enormous freight costs associated with shipping gas to hard-to-reach areas such as Yellowknife, or Whitehorse, or because the volumes sold are so low.
Obviously, the spikes in price caused by hurricanes Katrina and Rita, which closed down as much as 25% of the U.S.'s refining capacity, make September an anomaly.
Michael Ervin, president of MJ Ervin & Associates -- the pre-eminent authority on pump prices in Canada -- states the case more emphatically.
"There's not much I can predict about the oil industry," admits Ervin, "but one thing I can be very certain of is that any reduction in tax would be immediately passed onto consumers."
How does he know? Because he has the numbers, and what a story those numbers tell. Between Jan. 1 to Aug. 31, MJ Ervin & Associates tracked the pump price in 44 Canadian cities and towns.
The average pump price during that eight-month period was 89.4 cents per litre. Taxes averaged out at 32.5 cents and the average price for a litre of gas excluding taxes was 56.9 cents.
In other words, taxes make up 36% of the cost of a litre of fuel on average -- but even more in some jurisdictions.
Americans, for instance, pay much less for their gasoline than Canadians. Are U.S. gas companies less "greedy" than Canadian ones, or is it just the difference in taxes?
When the U.S. gallon is converted to a litre and the differences in the currency rates are accounted for, the average pump price in five U.S. cities tracked by MJ Ervin & Associates is 71.9 cents per litre -- a whopping 17.5 cents per litre lower than what Canadians pay. So what fuels the big gulf?
It's the taxes -- almost exactly. U.S. consumers, on average, pay 15.1 cents in taxes per litre on their gas -- or 17.4 cents less than Canadians pay in taxes per litre of gas.
In other words, the tax-excluded price per litre of gas is almost exactly the same as the Canadian price -- 56.8 cents per litre to Canada's 56.9 cents per litre -- just one-one-hundredth of a cent difference!
Need more proof?
There's lots of it. Let's look at Charlottetown, P.E.I., where the provincial government regulates the pump price, and compare it to Toronto, where the market decides.
In Charlottetown, motorists paid an average pump price of 91.6 cents per litre or 56.8 cents when taxes are excluded. Torontonians paid 86.6 cents on average at the pump which is 56.2 cents per litre when taxes are excluded. The only real difference here is the taxes. Not greedy gas companies gobbling up any difference.
Canadians should be outraged every time Goodale repeats his misinformation and slander of gas retailers.
In fact, the average margin on a litre of gas for gas retailers is 4.5 cents per litre and they must pay expenses out of that.
Once that is done, Cathy Hay says gasoline retailers are left with one cent per litre in profits.
"It's a very slim-margin business," explains Hay.
"What retailers in today's market are doing is they've expanded very significantly their non-petroleum offering," she adds, referring to the convenience stores and restaurants that accompany many, if not most, gas stations now.
"Your average service station would not be able to survive financially on sales of gasoline alone," Hay says.
So, instead of the feds setting up a new money-wasting government agency to monitor how energy companies set prices, as they vowed to do on Monday, they should look in the mirror to find the main cause of high oil and gas prices in Canada.
Therein lies the answer.
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| Dj EndgamE |
I'm not suprised really...
Although, I do agree that the gas distributers would likely eat up any decrease in prices within a very short period of time. |
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| tw1tch |
| This needs to be on the nightly news to get people to wake up!! |
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| VERTiG0 |
Everybody will be all "GAWSH DARNIT ETHEL! I DUN TOLD YA SO, THAT DANG CAPRICE COSTS ME AN ARM UN' A LEG TA FILL UP THESE HERE DAYS! SOMEBODY SHOULD DO SUMFIN' BOUT THAT! BUT FOR NOW I'M GUNNA RELAX IN THIS HERE EASY CHAIR LA-Z-BOY THINGERMAGJIGGER AN--- zzzzzzzzzzzzz"
And nothing will be done! |
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| Scot @ SJIRadio |
That is ridiculous. Although yes, the gas price is high because of tax, the same tax was in place when it was at a lower reasonable price (70-80 cents per litre). Currently the average cost per liter post hurricane Rita is $2.87 (US Energy Administration Spt. 26, 2005) per gallon which converts to about $.91 per litre Canadian. ([$2.87 / 3.87] x 1.2). According to CP24's Gas partrol the average cost at the pump is currently 105.1/Liter.
The cost of unleaded will not drop until we are out of the $60-$70USD/Barrel market, which many analysts agree will not be in the forseeable future. With the Fed (The Fed that matters... the US) continuing on their "anti-inflation" interest rasing campaign there is little sign that consumer confidence will rebound like it might have had they choosen not to maintain the current interest rate and wait until the next meeting. Chairman's Greenspans little speach yesterday was measily attempt to enstow confidence in the world economy by hinting that leaving out the 25 point raise would have created inflation and left consumer confidence at its current level.
The point that I am getting at is although the Canadian government has the option of lowering the gas tax, it will only hurt our already crippled budget; and will most likely be offset by an increase in demand generated by the artificially low price at the pump. Regardless of government intervention, the market will balance itself out and again create a price per liter that will mimic that of our neighbors in the US.
Its 4am and I'm tired so I'll leave with this for now. |
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| Jayx1 |
| quote: | The point that I am getting at is although the Canadian government has the option of lowering the gas tax, it will only hurt our already crippled budget; and will most likely be offset by an increase in demand generated by the artificially low price at the pump. Regardless of government intervention, the market will balance itself out and again create a price per liter that will mimic that of our neighbors in the US.
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WHAT crippled budget? The government has been running a multi billion dollar surplus for years. Hence the call to scrap the DEFICIT tax in gas. There is no defecit!
And since when have we ever had the same price for gas as the US? As long as ive been alive we have always paid a third more. |
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| rabbitjoker |
I  RBC Energy Fund. |
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| milos |
| quote: | Originally posted by tw1tch
This needs to be on the nightly news to get people to wake up!! |
ppl woke up to it (it was on the morning news heh)
and i don't see how it would change anything. oh no, the supposed truth has been exposed! i don't see it going past being just a new conversation topic, and frankly i give it all a big MEH
but thats just me (and honestly i know very little on the topic):cool: |
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| Jayx1 |
| quote: | Originally posted by milos
ppl woke up to it (it was on the morning news heh)
and i don't see how it would change anything. oh no, the supposed truth has been exposed! i don't see it going past being just a new conversation topic, and frankly i give it all a big MEH
but thats just me :cool: |
and because people in canada are too lazy to do anything about what they supposedly believe in, we inch closer and closer to the third world every day. |
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| Goashem |
| quote: | It almost doesn’t matter whether a new study from an independent think tank is right or not – most of us will likely choose to believe it anyway.
The proof, it would seem, is located on that marquee at your local gas station.
The Canadian Centre for Policy Alternatives has released a study claiming motorists in the Great White North are being gouged at the pumps.
The non-profit organization admits the cost of crude has escalated due to the damage caused by two hurricanes in the Gulf of Mexico.
But even with a barrel of oil going up at least $10 during the summer months, it concludes that can't possibly justify the outrageous prices motorists have been paying.
The math performed by the group’s economists works out this way – if the cost of a barrel of oil goes up by a loonie, gas should follow by about a little less than a cent a litre – including taxes.
Under that formula, a spike of $10 a barrel means gas price increases should have been kept to seven, eight or nine cent rises – which translates to about 95 cents a litre at the pump.
But most of us haven’t seen rates that low in weeks.
Instead, some stations were listing their product for as much as 20 or even 40 cents more overnight, especially during the Labour Day Weekend.
The report accuses Canadian oil companies of watching what’s happening down south and manipulating the cost here. The Centre’s Hugh Mackenzie calls that “profiteering”.
And if he’s right, that action continues in the G.T.A.
Drivers woke up Thursday morning to find prices had gone up again, in some cases by as much as 7 cents a litre. They now stand at $1.14 in many areas.
The industry continues to insist consumer demand and damage from Hurricanes Katrina and Rita are behind the never-ending escalation.
But drivers have long believed oil companies are gouging them, even though there’s never been any concrete proof of collusion – the only thing that will allow the government to step in.
And don’t expect to get a break anytime soon. The cost of a barrel of oil has soared again on world markets. It started the day at $66.15 – up another 20 cents.
September 29, 2005
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http://www.pulse24.com/Business/Top...29-001/page.asp |
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| Jayx1 |
the government is in on it either way. First off they arent eliminating the tax on tax nor the deficit tax (and we dont have a deficit).
Second even if they know there is price fixing they are reluctant to step in because they also benefit from higher gas prices.
Third, the Liberals in the late 70s and early 80s under trudeau approved all kinds of gas mergers. I remember when i was a kid we had BP, Gulf, Texaco, Total, and all kinds of other big name competition until (mostly) petro canada bought them all up. The plan at the time was to create one government run gas company for the whole country. What a nightmare that would have been! |
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| ChemEnhanced |
In all honesty I have just stopped caring about the whole fuel thing. Every morning I just lube up, bend over and take it in the ass.
If you were the goverment would you cut the tax? This is a great financial resource for the government and it makes the government look good because they can say they made so much money and now they are going to help people come election time. If gas prices are still high during election time then you will see them do something but not before then. The government is already saying they are going to help those lower income families by giving them a break on heating their homes yet someone like myself will get stuck paying close to 40% more to heat my house. No one is going to do anything about it and a change in government isn't going to change it. The GST was put in place to get rid of the defecit and yet it is still around and it will not be going anywhere. There is no reason why we should pay a tax on a tax but that is done all the time. Cigarettes are taxed by the government and yet we pay GST on cigarettes too.
Face it....we all need vehicles in order to continue the lives we are use to. |
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