Gas tax holiday doomed to fail

Opinion

Hey there, time traveller!
This article was published 08/11/2023 (701 days ago), so information in it may no longer be current.

It was refreshing to read Robert Parsons’ nuanced discussion of energy policy in Manitoba (Energy is important – but subtle, Oct. 31). Mr. Parsons provides a solid analysis, except for one key element: that the new NDP government’s plans to temporarily eliminate the provincial portion of the gas tax “directly provides assistance to those who need it most.”

This initiative is calculated to cost the provincial coffers $165 million for six months, or $330 million for one year. For such an eye-poppingly large sum, one would expect a sizable impact to affordability on the individual level. But is this actually the case?

According to data from Natural Resources Canada, the average driver in Manitoba adds 14,800 km to their vehicle’s odometer every year.

That means if your vehicle is a Ford F-150, with an average fuel economy of 10.7 L/100km, you will burn a little less than 1,584 litres of fuel in a given year. With the provincial portion of the gas tax at 14 cents/L, you can expect to save about $222 per year, or just a little over $4 per week.

If your vehicle is more fuel efficient than an F-150, your savings will be less than that. If you drive an electric vehicle, or no vehicle at all, your savings will be zero.

Just to recap the math here: it would take the owner of an F-150 nearly two weeks of gas tax savings just to buy a pound of butter! For owners of smaller vehicles, it would take even longer.

If this is the affordability measure that’s supposed to provide “assistance to those who need it most”, please forgive me while I do a spit take on my still butterless toast.

The 330 million-dollar question, then, is this: is there a better way to spend this much money to more impactfully increase affordability for Manitobans?

As Mr. Parsons himself puts forward: “A much better solution, one everyone seems to agree on, is public transit.”

Let’s start with Winnipeg, where approximately $200 million per year of the gas tax is collected, and would be returned.

It would only take $83 million to completely replace the revenue collected at the farebox from Winnipeg Transit passengers. With this sum, the city could offer free access to public transit to everyone for one year, while using the remaining $117 million to increase frequency and quality of service by nearly 50 per cent.

Since every kilometre you don’t drive saves 17 cents of fuel, if a person decided to leave their F-150 at home solely to make the trip to and from their place of work five kilometres away by bus, they would already be saving double what they could save with the gas tax holiday. And that’s before we count the savings from reduced maintenance, depreciation, parking, etc.

And if a person were already taking the bus, eliminating transit fares would save them over $30 per week. Now we’re talking affordability!

Plus, for those who don’t have the means to pay for a car, or transit fares for that matter, free transit allows them access to economic opportunities that didn’t exist for them before. So it’s also an investment in poverty alleviation.

It could also eliminate confrontations on buses due to passengers not paying, making this an investment in public safety.

The reduction in vehicle-miles travelled on our roads would also reduce wear-and-tear on them. And since there are annual provincial transfer payments to the city for road maintenance, in addition to being an investment in fighting climate change, it’s an investment in infrastructure!

And since every transit trip begins and ends with a short walk between bus stop and destination, we’d be adding a few thousand steps to the daily lives of thousands of Manitobans, which, studies have shown, has positive health outcomes. So it’s also an investment in health care!

It’s an investment that gives, and gives, and gives again.

What about all the Manitobans who live outside of an urban centre with available public transit? Absent some other policy suggestion, individual payments of their portion of the remaining $130 million would seem like a fair way forward, although it would be more efficient to return it as a credit to vehicle owners through MPI, based on the address of the vehicle registration.

But let’s not forget that at this moment, Eco West Canada, the Manitoba Association of Bilingual Municipalities and the RM of Piney are conducting a feasibility study on providing public transit service in rural Manitoba.

Driving is expensive, but it’s not because of how much the gas tax costs us. Having done the math, it’s clear we need a policy that will help us do less of that expensive thing. One that will not only butter our toast, but hit multiple other policy goals at the same time.

But instead, we’re being offered a gas tax holiday.

Michel Durand-Wood lives in Elmwood and has been writing about municipal issues since 2018.