The Federation of Canadian Municipalities put out this release today:
FCM Campaign Reality Check
Conservative Diesel Tax Cut proposal does nothing for transit riders, systems
A two cent cut in the excise tax on diesel fuel is worth $ 9.2 million per year to Canada’s transit systems – less than one quarter of one percent of their $ 4.8 billion in annual operating costs (Source: Canadian Urban Transit Association, 2007).
The proposed cut will cost the federal treasury $600 million per year. Less than two percent of those dollars, or one dollar in 60, will directly benefit transit systems.
A Strategic Counsel survey released last week showed that 8 in 10 Canadians think the federal government should dedicate more of its fuel tax revenues to repairing and building public transit systems. This announcement does not touch on investment needs.
Six in 10 Canadians say they would be more likely to take public transit if service was improved. The excise tax cut will do nothing to get more buses on the road or improve existing commuter rail service.
One in five Canadians are ready to switch to public transit because of the high price of filling up their cars. But most urban transit systems are at or beyond capacity at peak hours. New federal funding – not marginal tax cuts – are needed to help Canadians make the switch from cars to transit.
The priority for transit systems are for new investments, not cuts to the fuel tax.
For more information, contact: Maurice Gingues, FCM – (613) 907-6395
The mayor of Ottawa sent the following email out to all of the major city mayors across Canada:
Michael [Director, Policy and Research, FCM],
While the announcement today is small compared to the transit funding needs of many of the municipalities including Ottawa I would suggest that saying it does nothing for transit riders is disingenuous to say the least.
In 2007 The City of Ottawa’s Transit Fleet used 36,645,555 Litres of Diesel Fuel for a cost of $33,175,210.
Under the proposal announced today this would translate into a savings of 732,911.10 for our city’s Transit operations.
By comparison under the Liberal’s Green Shift Plan, diesel fuel would be taxed by an additional 7% in the 4th year of implementation.
So by the 4th year of the Liberal’s Plan, based upon our 2007 average price of 90.53 cents per liter, the financial burden on the City of Ottawa’s transit fleet alone would be $2,322,264.70.
Using today’s price of $1.279/L the impact would be $3,280,876.54.
Larry O’Brien
Mayor City of Ottawa
The excise tax cut announced today by Stephen Harper was targeted towards farmers and truckers. However, as a side benefit, it helps municipalities which use diesel fuel for their buses and other forms of mass transit. The FCM complains that more could be done for transit costs by the federal government, however, today they were handed an unexpected bonus.
