Canadian prime minister vows to cut diesel taxes after election

| 9/11/2008

As part of his re-election platform, Canadian Prime Minister Stephen Harper has vowed to cut taxes on diesel fuel. Insiders say the government could do much better than that if it wants to reach out to truckers.

Harper, the leader of the Conservative Party, announced Tuesday, Sept. 9, that if he gets re-elected Oct. 14, he would trim the federal excise tax on diesel from 4 cents to 2 cents per liter over four years. The tax cut would equate to about 7.5 cents per U.S. gallon.

The announcement came just two days after Harper called for a federal election in an attempt for his party to win more seats in Parliament.

Jim Park, editor of HighwayStar, a Canadian trucking publication, says to beware of election politics.

“I would categorize the tax cut as better than a poke in the eye, but not much,” Park told Land Line.

He said the government created the 4-cent excise tax in the 1980s to reduce a government spending deficit, but things have changed since then.

“We’re running a big budget surplus right now,” Park said. “… I think they could do a lot more with that money than give it back to us 2 cents at a time.”

Because of the current surplus, Park suggests the government would be better served by creating grants for idle-reduction technology, driver training, truck-stop electrification and the retrofitting of old trucks with new technology.

“There’s a lot that could be done with tax incentives,” Park said.

The Conservatives currently hold a minority government, which means they need support from opposition parties to get laws passed. Harper has been prime minister since January 2006.

Harper’s main opposition in the election – the Liberal Party and its leader, Stephane Dion – believe Canada should not cut taxes, but should instead implement a carbon tax of 7 cents per liter as part of his party’s Green Shift platform.

New Democratic Party leader Jack Layton is also reportedly cold to Harper’s tax cut.

– By David Tanner, staff writer