Breakenridge: Toll roads a fairer approach to cowl prices than the gasoline tax

Breakenridge: Toll roads a fairer approach to cowl prices than the gasoline tax

Fairly than merely slide again into our earlier established order, this must be a chance to re-examine the complete idea of the gasoline excise tax and why it exists within the first place

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After a 20-month absence, we’re now lower than two weeks from the grand re-entrance of Alberta’s gasoline excise tax.

It gained’t be the total 13 cents per litre however, as of Jan. 1, the province will gather 9 cents on each litre of gasoline offered within the province. That is according to the coverage spelled out when the tax was initially paused: if oil costs dropped beneath a sure stage, the tax would return.

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Even when a case will be made for delaying its return, the tax was coming again finally. And in equity, tacking 9 cents onto the present gasoline worth nonetheless leaves us effectively beneath a few of the tax-free gasoline costs we’ve seen over the previous 12 months and a half.

However moderately than merely slide again into our earlier established order, this must be a chance to re-examine the complete idea of the gasoline excise tax and why it exists within the first place. This entire train has inadvertently made the case for 2 easy and efficient — and likewise controversial — options.

For as a lot as we’d view the gasoline excise tax as some type of drivers’ consumer price to offset the price of highway upkeep, it isn’t. Clearly, we’ve been sustaining roads whereas the tax has been paused. And the premier final week made it clear that it is a tax similar to another.

In a year-end interview on QR Calgary/630CHED Edmonton, the premier defended the return of the tax, citing the strain on Alberta’s backside line. “We’ve to ensure that we’re managing our revenues for the long run,” she mentioned. And pointing to the necessity to construct extra colleges and hospitals, the premier warned that “we are able to’t carry on slicing our long-term reliable income sources.”

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So why can we single out one product to use what is basically a consumption tax? A extra broad-based provincial consumption tax (sure, a PST) could be a way more reliable income supply and would give the province the fiscal leeway to not solely scrap the gasoline tax however decrease different taxes and costs.

But when we insist {that a} mechanism exist for recouping cash from drivers to cowl the price of fixing and constructing roads and different driving infrastructure, is a gasoline tax actually the easiest way to do this? Gasoline taxes find yourself in the identical income pot as all different taxes, and so there’s probably not a direct correlation between the tax fee and highway upkeep prices.

Moreover, the emergence of electrical automobiles has severely undermined the premise of gasoline taxes as a consumer price. Drivers of electrical automobiles clearly don’t pay the gasoline tax, but they use the identical roads (given the extra weight of EVs, they arguably trigger much more put on and tear) as everybody else.

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Shifting the price to car registration charges could be one different, however that imposes the identical price on everybody no matter how a lot they drive. The plain and honest answer to this conundrum is an concept that may be simply as controversial as a PST: toll roads.

It will be a lot simpler to separate toll highway income from different tax income and be sure that it went immediately into highway repairs and development. Not like gasoline taxes or registration charges, highway tolls assist to display the place driver demand is heaviest and the place investments are most wanted.

As a bonus, having a PST and/or toll roads would permit us to extra successfully seize income from these visiting or passing via the province.

Given the political headache the federal government will certainly face with the return of the gasoline tax subsequent month, it’s unlikely they’d compound that by touching two third-rail political points. However that shouldn’t stop us from rethinking a flawed established order.

“Afternoons with Rob Breakenridge” airs weekdays from 12:30 to three p.m. on QR Calgary

[email protected]

X: @RobBreakenridge

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