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Thoughts about the relationships between transport and the urban area it serves

Just another slight of hand…………..

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*B.C.’s luxury auto surtax gives the SUV gang a real break*
*A financial stimulus that encourages people to buy larger, less efficient autos*

Pete McMartin – Vancouver Sun
Thursday Feb 1, 2007

Pete wrote an article last Saturday, pointing out that the provincial tax break on hybrid cars (no PST) has had little impact since only 4710 have been sold since 2001 – or 0.18% of the fleet (2.6m passenger vehicles). This brought a response from Matt Price, of Victoria. Price is the coordinator for a non-profit agency called Conservation Voters of B.C. He points out that the province has been reducing the luxury car tax

“The policy situation [encouraged by the provincial government],” he
wrote, “is even more crazy though. I presented to the B.C. budget committee this year using the example of the hybrid tax break versus the lifting of the threshold of the luxury tax on vehicles.

The [luxury tax] is a financial stimulus that encourages people to buy larger, less efficient autos.

And the kicker is that it costs the treasury 30 times the amount that the hybrid tax break does!”

Price was referring to B.C.’s luxury auto surtax. Designed to dissuade drivers from buying larger, less fuel-efficient autos, the surtax threshold was introduced by the NDP government a decade ago at $32,000.

It was then raised in Premier Gordon Campbell’s first term to $47,000, then $49,000. It now stands at $55,000. For any car over $55,000, the surtax adds one per cent to the PST to a maximum of an additional three per cent at $57,000.

So the current annual cost to the provincial revenues is SUVs and Porsches $45m, hybrids $1.5m

Pete also links this to contributions to Liberal election funds by car dealers but that is a low blow. I think the Liberals have made a principled stand. Give tax breaks to the good folks who vote Liberal (and drive Jaguars) and stick it to the greens while making it look like we care about the environment. Pete goes on to compare the number of hybrids sold compared to the number of big trucks used for passenger transport, but attributing that to recent tax policy is being blinkered. It is a trend that has been going on for years and is mainly due to the big three US automakers trying to get around the CAFE standards. Up to now hybrids from Honda and Toyota have been in limited supply and carry a hefty price premium over similar sized conventional cars. So the pay back from lower fuel consumption is a long way off – long after most people who buy new cars will have moved on to the latest fashion statement. Smaller conventional cars currently offer similar fuel consumption to the Prius and Civic hybrids at much more affordable prices. And to be fair that is exactly what Pete wrote on Saturday – and that article (linked above) is not locked for subscribers only.

Written by Stephen Rees

February 2, 2007 at 8:07 am

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