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Jeff Pierce
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I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
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  • Taxas and Inflation are Draining Us 4 comments
    Feb 2, 2011 11:03 AM

    The entire time I’ve been in Canada the price of gas has baffled me. I’ve been so used to measuring my tanks of gas by the gallon that when I got here and tried to think in terms of liters it never really translated, especially when you factored in the currency conversion. The other day I was at the pump and I started to read the taxes that are associated per liter that I couldn’t believe what I was seeing.

    So let me work this out and please…if I’m missing anything please let me know. Currently in Vancouver, drivers are paying $1.20 Canadian per liter. Now when the US Dollar used to be significantly higher than the loonie the conversion didn’t seem to be quite as bad, but now that the Loonie and US Dollar are essentially at par, it’s very clear to me that one of the biggest rip-offs (taxation and inflation) going on right now is the price of gas Canadians are being forced to pay if they want to drive. Now we do have an awesome public transportation system here…but come on, nearly everybody owns at least one car.

    There are 3.8 liters in a gallon. When you take that, multiplied by $1.20 (price per liter), drivers are paying $4.56 per gallon to drive. Four dollars and fifty six cents per gallon! When I first started driving back in 1991, I remember paying .85cents per gallon. That is over a 500% increase in 20 years in the price of gas. It’s almost baffling to think of where the price of gas could be in another 15-20 years.

    Another point I want to make is in reference to the amount of taxes that Canadians pay on each liter of gas (see the picture I took to the right at the pump). I’m not including the 5%HST in this final calculation, so it will be even higher, but when you add those taxes together for each liter you buy of gas you are paying .29cents to the government in taxes. It’s almost like a reverse buy 3 gallons and you get one free…instead you buy 3 gallons and have to pay a liters worth of taxes and get nothing in return.

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Comments (4)
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  • nervousFella
    , contributor
    Comments (34) | Send Message
     
    I think your missing some fundamental differences in American vs Canadian society. Now arguments have been made on both sides over who has the better what but examine it in this framework. Compare the best of America to the best of Canada, more often than not, the best of America is better than the best of Canada but then ask you yourself, who gets to enjoy that best. Overall, if you are wealthy, America is a better place to be. If you are NOT wealthy, Canada is a much better place to be. Canada has a higher standard of living than America. I am not going to argue that there aren 't ineffeciencies in Canada 's system; certainly it can stand some improvement. In terms of gas prices, they are not the highest, and it is a small price to pay for a higher standard of living.
    2 Feb 2011, 03:09 PM Reply Like
  • Jeff Pierce
    , contributor
    Comments (942) | Send Message
     
    Author’s reply » If it was just gas that would be fine, but now you have HST here in Vancouver, coupled with the already ridiculous tax rates on wages. My friend, they are gouging us everywhere.
    2 Feb 2011, 03:13 PM Reply Like
  • nervousFella
    , contributor
    Comments (34) | Send Message
     
    I like conversing with (fellow) Canadians. We don 't take a hostile tone with comments and questions.. A gouge implies they are taking funds UNNECESSARILY; and given that I acknowledge that there are inefficiencies, yes they are taking (a little?) too much. Given the fine nation I enjoy, I would rather they take a little too much to provide what I have, than not enough, and not have the services.
    I remember reading a few months ago that a fire dept. in Arkansas let a house burn down because they hadn 't paid the fire tax or something. The victims argued they forget and would 've been willing to pay on arrival but the fire chief said if they allowed that, than people would only pay when they had a fire negating the risk distribution effect of the low fee.

     

    I sometimes question whether America actually does have fewer taxes. Certainly on the surface but then they have all these user fees, toll roads etc. And keep in mind that in collecting those fees, a chunk of that money goes to administrating the collection of those fees.
    I would rather have a blanket set of large taxes and fees that are then distributed to where it is needed. Yes, I don 't mind paying high gas prices to pay for healthcare or schools.

     

    I think if you look at the total tax bill and then look at what we ALL enjoy in return, you will find it is actually cheaper than our American equivalents.
    2 Feb 2011, 03:45 PM Reply Like
  • Jeff Pierce
    , contributor
    Comments (942) | Send Message
     
    Author’s reply » NervousFella,

     

    My wife is from the Phillipines and after returning from a recent trip it reminded us of how fortunate we are here in Canada.

     

    I never meant for this thread to be a Canada vs. the States debate. I was really only trying to express my feelings that we're overtaxed in Vancouver and people are starting to feel it now that the "good times" are on hold.
    2 Feb 2011, 07:23 PM Reply Like
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