TORONTO - Ontario's opposition parties promised Monday to find ways to help motorists deal with rising gasoline prices, but the Liberal government rejected any cuts to provincial gas taxes.
A study from CIBC World Markets released Monday warned the near 25 per cent hike in gas prices since late 2010 will cost Canadians an extra $12 billion -- or $950 per household -- at the pumps this year.
The report also said gas prices hit poorer families especially hard, concluding "low-income households spend more than twice as much of their income on energy as do high-income households."
Progressive Conservative Leader Tim Hudak wouldn't make any specific promises, but said he's looking to give people a break from rising bills and hydro prices, and would consider options such as removing the HST from gasoline.
"Whether it's abolishing the HST on the basics like heat, hydro or gas, cutting the (tax) rate or income tax reductions," said Hudak. "Something has to be done so average, everyday families can catch up."
Removing the HST from gasoline or reducing the 14.7 cents a litre flat provincial tax, two cents of which goes to municipalities, would only clear the way for oil companies to raise prices, warned Finance Minister Dwight Duncan.
"I think what we want to be careful of is that we not give the big oil companies room to move in," he said. "And I don't think we should be subsidizing them through cuts to education and health care like Mr. Hudak wants to do."
The Liberals argue that every one point cut in the HST would cost Ontario $3 billion in lost revenue, which they say would force a PC government to cut to front-line services.
The Liberal government added eight per cent to gasoline prices, and a host of other goods and services, last July 1 when it merged the provincial sales tax with the five per cent GST into the HST.
Removing the eight per cent portion of the HST from gasoline probably wouldn't benefit consumers, said Duncan.
"You see overnight swings in these prices much larger than the HST," he said. "If somebody thinks taking the HST off is the answer, do you think the oil companies and the others are not going to move to fill that room?"
Duncan also said the province's revenues from gasoline actually drop when prices rise at the pumps because consumption also drops as prices go up.
However, the CIBC study said there was no drop in consumption during the last price spike in late 2007 to mid-2008, when gasoline jumped from about $1 to $1.40 a litre.
"Canadian drivers consumed 3.5 billion litres of gasoline a month in July 2007 when gasoline prices cost 100 cents a litre, and they continued to consume 3.5 billion litres when the price was 140 cents a litre," concluded Benjamin Tal, deputy chief economist at CIBC.
Regulating gasoline prices would help consumers avoid huge swings in prices, said NDP Leader Andrea Horwath.
"It takes out the real spikes and it evens out the price swings so people don't experience the kind of spikes that we've been seeing," said Horwath.
However, the government said regulating gasoline prices would force consumers to pay a higher, locked-in price, and would prevent them from benefiting when prices drop overnight.
