Several years ago, amid an uproar about rising fuel prices and tighter profit margins for rural gas retailers, the New Brunswick government cut its motive fuel tax and tweaked margins to help its smaller retailers. At the time, Nova Scotia’s Conservative government refused to follow saying the tax was going directly to rehabilitate this province’s crumbling highway infrastructure.
Now, with gas prices again sky high the question is again being asked about the motive fuel tax and just how much is needed to fix Nova Scotia roads.
On Monday, Conservative Leader Jamie Baillie suggested the NDP government should immediately begin producing a quarterly report on the amount of taxes (including HST) the province collecting from gasoline and diesel sales. If more money is being made on the tax than required for road work, the Tory leader thinks gas taxes should be reduced.
The government’s budget projections, he said, were based on an estimated average pump price of $1.24 per litre. With the average sitting at $1.31 per litre, Baillie things the province is collecting a windfall in tax revenue that Finance Minister Graham Steele should be returning to beleaguered motorists by reducing fuel taxes.
At first glance it may seem like a good suggestions and anything that reduces the pain at the pump is a good idea. However, if world markets were to shift dramatically in a few weeks dropping fuel prices by 20 or 30 cents a litre would that mean government should increase the fuel tax?
Nova Scotia’s roads are in pretty decent shape when compared to others in the region. Sure there are some pretty bad roads in this province, but every cent that can be poured into highway construction is a plus.
Playing Russian roulette with the motive fuel tax will only lead to more uncertainty when it comes to which roads get fixed and which ones are forgotten. No one likes high fuel prices, but tying the fuel tax to gas prices or eliminating regulation altogether, as has been suggested by the Liberals, is not the answer.