The mega pothole that we refuse to fill

From coast to coast, politicians are scolding about green taxes that would strangle citizens’ budgets, according to them.

But guess what?

Refueling costs less than it did 10 years ago. Yes, yes, you read that right! Taking into account inflation, the price of gasoline at the pump was higher in 2013 ($1.72) than in 2023 ($1.58) in Quebec, according to calculations by the Chair in Taxation and in public finance (CFFP), which presented its annual report on Thursday¹.

And gasoline tax revenues in Quebec have decreased by 2.3% per year for the past five years, while virtually all other types of taxes are growing (5% per year, on average).

Except that pulling on green taxes is popular.

Ax the tax, repeats from all the platforms the conservative leader Pierre Poilievre who promises to eliminate the carbon tax, a measure whose effectiveness there is consensus, without saying what he would replace it with to fight against climate change.

Saskatchewan outright rebelled against Ottawa. In a disconcerting move, the province stopped collecting the federal tax on natural gas on June 1^er January, frustrated by the lack of fairness of the Trudeau government which had granted an exemption on heating oil to please the electorate of the Atlantic provinces, major users of this method of heating.

For its part, Manitoba celebrated the New Year by temporarily suspending its 14 cents per liter gas tax. It was enough for the leader of the Conservative Party, Éric Duhaime, to return to the charge on Wednesday, calling for a suspension of the provincial tax on fuels in Quebec.

But when we take a step back, we realize that Quebec is one of the places in the world where gasoline taxes are the lowest, at 29.2 cents per liter (10 cents federally, 19.2 cents in Quebec).

Okay, it’s more than in other provinces. But among the most industrialized countries, only the United States demands less. Gasoline taxes are three times higher in countries like Italy ($1.05), France ($0.99), the United Kingdom ($0.97) and Germany ( $0.95).

In fact, Quebec underuses eco-taxation. The weight of all green taxes in the province, at 1.1% of GDP, places Quebec at the very end of the pack of advanced countries, where the average is twice as high. Only the United States is doing worse than us.

However, if we want to change behavior, it is crucial to send a price signal that takes into account the cost of pollution. The Quebec Minister of Finance is the first to recognize this. “We are not closed to eco-taxation, but we have to choose the context,” said Eric Girard on Thursday during an event organized by the CFFP.

With inflation high, he had his foot on the brake. “But I understand that this subject will come up again,” continued the minister, “especially since we have funding challenges in terms of public transport. »

For once, the Coalition Avenir Québec (CAQ) does not seem completely closed to the idea of ​​eco-taxation. It’s encouraging.

In December, the government also gave the green light to municipalities that offer public transportation so that they can increase registration fees for more polluting vehicles.

It’s good for the environment. And it’s good for financing.

Because let’s not have any illusions: a transport system cannot pay for itself. And the Land Transport Network Fund (FORT), which is intended for the maintenance of road infrastructure and public transport services, has been in the red since 2017-2018.².

Quebec is therefore obliged to draw on its consolidated fund, supplied by all taxpayers, which does not respect the user-pays principle.

In fact, it’s as if there was a huge financial pothole that we refused to plug.

In the short term, it would be necessary to increase the tax on gasoline – FORT’s most important source of financing – which is not even indexed, which is nonsense.

In the medium term, we will have to think about another way to finance our transportation network, because the advent of electric vehicles will eliminate the gas tax. The kilometer tax would be a good alternative, although it poses technological challenges.

Otherwise what ? Do we prefer tolls, as we find more in the United States and Europe where many roads are privatized? In France, a quarter of the financing of the road network comes from tolls and vignettes.

Politicians who court the electorate by calling for the abolition of gas taxes must say how they plan to fight climate change and how they plan to finance the transportation network. Potholes, no thanks!