Electric cars—do the math on subsidy’s effect on tax base

Presently, an electric car, when using electricity, pays no ‘road tax.’ The loss of this revenue…will need to be recovered.

To the editor:

All levels of government are promoting electric vehicles by providing incentives.  In the case of the B.C. government they are using taxpayer money to partially fund the installation of public recharging stations (Capital News, March 19: Kelowna Campus Generates Buzz Over Electric Car Chargers).

This article goes on to use BC Ministry of Environment information that states ‘electric vehicles can cost as little as $300 per year in electricity compared to upward of $1,500 to fuel a gas powered car.’

What is being ignored is at least one third of the figure quoted for a gas powered car is tax ($500) much of which is allocated to road improvements/construction. Presently, an electric car, when using electricity, pays no ‘road tax.’ The loss of this revenue is not sustainable and will need to be recovered.

Considering funding alternatives for public transit in the Lower Mainland, increasing fuel taxes may not be workable if the demand for electric cars increases and revenues from fuel taxes softens.  One of the options being considered is a ‘mileage tax’ where you pay a tax based on the distance that you are driving and not by what the vehicle uses for fuel to get there.

Consumption taxes (HST/GST/PST), including those on fuel, have one disadvantage in that they do not promote the government to ‘drive’ prices lower. Price decreases, while good for the taxpayer, result in lower tax revenue for government.

Canadians have long complained about the price of fuel (and other goods) when comparing to the U.S., yet the Canadian government remains complacent on finding the reason—perhaps there is not enough incentive for change.

T. Kinsman,  Westbank



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