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Gas price differential between U.S. and Canada is already significant
Last year, The Times and other Lower Mainland Black Press newspapers did a series of stories on cross-border shopping, and the issues that drive a good number of Canadians south. This activity hurts Canadian businesses, employment, community contributions and, of course, also hurts the bottom line for governments, who collect taxes on almost everything we buy and seem to be constantly on the lookout for more.
I do not regularly travel across the border to buy gas, groceries or other items. However, when on a trip to the U.S., I do fill up my vehicle’s gas tank. And the difference in prices is shocking.
As has been noted by the Canadian Taxpayers Federation and others, the high rate of gas tax on Lower Mainland drivers is a key reason that many people initially cross the border. When they discover the savings to be had, they start to go more frequently and check out other businesses. The net effect is damaging to businesses, particularly small businesses, in areas close to the border — such as Langley, Surrey, Delta, Abbotsford and Chilliwack.
On Saturday, we were picking up a family member at the Seattle Airport. The reason she flew out of there and returned there is also partially related to taxation — a return trip to Africa was more than $1,000 less when flying from Seattle, than from Vancouver. A good portion of the difference is in higher Canadian federal and airport taxes.
I filled up on the way down. I paid $3.86 (U.S.) per U.S. gallon. Converted to Canadian dollar and litres, that is about $1.09 per litre. Compare that to the $1.55 per litre being charged at most local gas stations this week in Langley.
On the way home, I also filled up, finding an even better price — $3.69 (U.S.) per U.S gallon. That worked out to $1.05 per litre in Canadian dollars.
Meanwhile, Vancouver-area mayors are suggesting that the best way to pay for a $7.5 billion transit plan is to add another 5.5 cents per litre in a regional carbon tax. That would take the price of gas up to $1.60 per litre in Langley, based on current prices.
An almost 60 per cent differential between Canadian and U.S. gas prices, even with the dollar at 93 cents (U.S.), will tempt many more to cross the border.
This will hurt small businesses, and many will either close or scale their operations back. It will mean fewer jobs in Canada, and less income tax, sales tax and property tax revenue.
Figures already show that gas sales in B.C. are down significantly. The provincial government, filled with self-delusion, insists it is because the carbon tax causes people to drive less. There is some truth to that. Some people are driving less, due to ever-increasing gas prices, but the number of Canadians buying gas in the United States is not declining.
It is important that residents of Metro Vancouver make it clear that even more gas taxes are simply not the way to go. They are far too punitive to consumers, employees, businesses and governments.
We need to come up with ways to encourage people to spend money locally. Boosting gas taxes isn’t one of them.