The trucking industry’s woes are just the tip of the iceberg.
The 20,000 commercial vehicle operators in British Columbia are like canaries in a coal mine, warning government leaders that the economy could stall if immediate action is not taken to provide relief from high fuel charges.
Reports of provincial commercial truck operators angered by excessive taxation on fuel are surfacing daily in the media and on the highway.
This past month, there have been several incidents of truck convoys queuing up on bridges and major arteries – driving home the point that the key to B.C.’s economy is the same keys that start the trucks’ engines.
Since 2003, the cost of fuel has escalated without control from 55 cents a litre to more than $1 per litre.
This represents an increase of more than 40 percent in the cost of moving goods and services for you and me. Oil industry watchers see no relief in sight as oil-price estimates are projected to reach $60 a barrel or more before year’s end.
The message being sent by the truckers is that this problem will get worse. It must be faced head-on by our political decision-makers.
Global international oil firms recently announced record-breaking profits: Exxon Mobil Corp., $82 billion US in the first three months of 2005; Conoco Phillips, up 80 percent; Royal Dutch Shell, up 28 percent; and British Petroleum, up 35 percent, all over the same three-month period in 2004.
Other oil companies’ profits are surging as well, leaving them with piles of cash. “There’s an embarrassment of riches now that is unavoidable,” Lawrence Goldstein, president of the New York-based Petroleum Industry Research Foundation Inc., told The Washington Post.
It seems our federal government does not have the ability to influence these international behemoths. However, both the provincial and federal governments do have the ability to provide some relief.
First, we must identify whose hand is in our pocket for each litre of gas we buy at the pump. As we do this, remember that we are talking about our after-tax dollars – the residual dollar we are left with after payment of all other taxes.
The cost components of $1 per litre of gas are Base price (the hand of the oil companies), federal excise tax, provincial tax, GST/HST tax (tax on a tax), and in some jurisdictions, transit tax (tax on tax). According to Shell Canada’s website, more than 40 cents of every dollar spent on fuel represents taxes.
In Vancouver, according to MJ Ervin & Associates, the tax portion of every litre of gas is 37 percent; in Edmonton 21.7 percent, and in Toronto, 27.3 percent.
In the last 24 months, the escalation in pump prices has produced a windfall for provincial and federal revenues. The federal and provincial governments would have to do nothing more than be content with the taxes they collected in 2002, prior to the explosion of oil prices, to provide immediate relief for the engines of our economy.
According to the Canadian Automobile Association, studies have shown that federal and provincial governments together receive an estimated $10 billion per year in gasoline taxes.
If these funds were segregated and spent on intermodal transportation infrastructure and not thrown into the general revenue pot and used for other purposes, there might be some tolerance for the situation; unfortunately, this is not the case.
Dave Angus, the business representative for Teamsters Local 213 on Vancouver Island, commends some trucking firms for demonstrating corporate social responsibility. He says these firms, recognizing the dire straits of the truckers, have agreed to meet and review their current collective agreements with the expectation that they can provide some relief by including fuel-escalation clauses in their contracts.
But these are isolated cases. “Many truckers are locked into existing long-term contracts and are in serious trouble,” Angus noted, and are finding that the fuel costs are pushing them toward closing their businesses.
But this is not just a trucker’s issue – it is everyone’s issue.
By government taxing what has already been taxed and digging ever deeper into the taxpayers’ pockets, there is less money for you and me to support our families and stimulate our economy.
Instead, it provides a cash cow for government to spend on programs such as the gun registry (more than $1 billion), the mismanagement of the Canada Jobs Fund program, the Quebec sponsorship scandal and the growing costs of the Gomery Commission to investigate the activities of our government.
I believe the money is best spent by you and me.
Note: This article was originally published in 2005.
