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'Green' Budget Taxes Car Sharers

New levy penalizes eco-friendly practice, say critics.

Andrew MacLeod 15 Apr 2008TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau chief in Victoria. You can reach him here.

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Co-operative Auto Network and Zipcar zapped.

As part of its green budget, on April 1 the British Columbia government began charging people who share cars with a tax that was previously only applied on car rentals.

Car share organizations, where groups of people jointly own vehicles, bill themselves as a cheap, environmental alternative for people who want to avoid owning their own car. B.C. has such organizations in Vancouver (the Co-operative Auto Network and Zipcar), Victoria and Nelson.

Critics say charging them the $1.50 passenger vehicle rental tax is consistent with the contradictions in the province's 2008-2009 budget, which committed to fighting climate change but continued subsidizing the fossil fuel industry.

"I know the Victoria Car Share Co-operative is hopeful the government will recognize this tax is not well applied," said Josh Craig, the VCSC's treasurer and past president. "If the goal of government is to encourage activities that reduce congestion and greenhouse gas emissions, this tax is not really functional. It acts as a disincentive to car sharing."

Back tax considered

For many years car shares operated without paying the tax. Last year staff in the government decided maybe the car shares should pay and considered retroactively charging Vancouver's Co-operative Auto Network some $350,000 for the tax.

Government officials decided not to charge the retroactive tax. They also decided the $1.50 per booking will only apply to trips of eight hours or more, not to every booking as was at one time considered.

"I think for the time being it's a reasonable compromise," said Craig. "It for the time being creates a level playing field between rental agencies and car share co-operatives."

For the Victoria car share the tax will apply to about 13 percent of trips.

"Ideally what all car sharing organizations would like the government to recognize is the PVRT tax is for those who are coming from outside the province and putting wear and tear on our roads," he said. Car sharing does the opposite, he argued. The users are people who live in the province, who pay income taxes and sales tax. The organizations also get people out of cars, reducing their impact on provincial roads.

Tax to yield under $1 million

While it's nice the province did not penalize the agencies as much as it might have, he said, it has done little to support the organizations. The Victoria car share has had grants from municipal and federal governments, Craig said, but not the province.

Excusing car shares from the tax would cost the government very little. The budget said the tax will bring in so little it will have "no material impact" on revenue. A Finance Ministry spokesman said it will be less than $1 million a year.

For comparison, the province has budgeted $11 million in tax breaks for people who buy new fuel efficient vehicles. In recent weeks the government also announced it is putting $15 million into expanding the Scrap-It program which gives incentives to people to get vehicles made before 1993 off the roads.

"It's silly there's any punitive treatment of a more sensible car ownership model," said Gregor Robertson, the MLA for Vancouver-Fairview and a contender to be Vision Vancouver's candidate in November's mayoral election. "It is a more environmentally sensible model. It deserves appropriate tax treatment."

While it's positive the government chose not to apply the tax to shorter trips, he said, they could do much more to encourage more environmental transportation choices. "If they were really serious about encouraging other models there would be incentives for car co-op ownership. There'd be an explicit strategy to get people out of cars, out of single-owner vehicles."

Big subsidy for oil and gas

The missed opportunity is in line with the rest of the government's budget, he added, which includes around $1 billion in subsidies to the oil and gas industry over the next three years. "The contradictions for this government between climate and many other policies they're pursuing are staggering."

The province set a record with its sale of oil and gas rights in 2007. Now it's pushing shale gas exploration, Robertson said.

"There's got to be some accountability for the greenhouse gas emissions," he said. Most of the oil and gas will be exported and burned elsewhere, and won't count as carbon emissions originating in the province, he said. "It's total hypocrisy . . . They can't see the contradiction. The government's getting away with an environmental atrocity."

Despite dressing the budget in green and taking steps to reduce greenhouse gas emissions, the government continues to liquidate the province's natural resources, said Robertson. "You can't operate a business on that premise," he said. "It's complex and it's sinister and it will have devastating repercussions for future generations."

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