Media Release

CFIB issues open letter on fuel costs: Small business calls for tax relief and assurances of no new taxes on fuel
June 3, 2008

Ottawa – Canadian small firms are being hit hard by rising fuel prices and are calling on governments to provide tax relief and assurances that they will not introduce additional taxes, such as a carbon tax. This was the subject of an open letter sent today to federal finance minister Jim Flaherty and provincial/territorial finance ministers by the Canadian Federation of Independent Business (CFIB).

“Any discussion of implementing new fuel or carbon taxes will appear incredibly insensitive to entrepreneurs and the general public who are struggling to deal with the pressure of rising fuel prices,” said Garth Whyte, CFIB’s executive vice-president. “Instead, we need our political leaders to be examining ways of reducing gas and diesel prices through tax relief.”

CFIB is calling on governments to:

• End the 1.5 cent per litre additional federal fuel excise tax originally introduced as a deficit reduction measure;
• End the tax-on-tax anomaly that inflates prices and government revenue by eliminating sales taxes on existing fuel taxes;
• Undertake a review of all forms of fuel taxes – including diesel fuel – in light of the current price environment; and,
• Place a moratorium on any discussions or implementation of additional fuel or carbon taxes.

While CFIB is currently surveying its members across Canada on their views of a carbon tax, a post-budget survey in British Columbia found only 14 per cent of BC small firms were supportive (56 per cent opposed), even with the promise of revenue neutrality for the provincial government. “While revenue neutrality may be possible for a government, it is virtually impossible at an individual firm level. Many businesses would be hit with far higher additional fuel taxes than any associated tax relief,” Whyte said. “In addition, BC local governments are discussing property tax hikes to deal with their own increased fuel tax bills.”

CFIB is calling on small businesses concerned about fuel costs and taxes to send their views to their respective finance ministers. A fax form is available at www.cfib.ca to raise these issues with government leaders.

Contact: Marie-Danielle Davis 613-235-2373. CFIB’s open letter can be found at www.cfib.ca

CFIB is Canada’s largest association of small and medium-sized businesses, representing more than 105,000 business owners who employ 1.25 million Canadians and account for $75 billion in GDP.