Almost inevitable new taxes on cars

The Ministry of Energy has been studying new ways to tax polluting cars for two years and even claims that a kilometer tax is « necessary » in Quebec.

• Read also: Greater Montreal will study kilometer pricing

• Read also: It is high time to rethink our transport and penalize pollution

• Read also: Environment: Quebec is considering a tax that Legault ridiculed

However, François Legault affirmed in the middle of the electoral campaign that the proposal of Québec solidaire to tax polluting cars was a matter of “wonderland” and that there was no question of increasing the tax burden of Quebecers.

However, the government’s own experts say, on the contrary, that we must act without delay.

A tax on the purchase of a polluting vehicle and a kilometer tax according to the distances traveled were analyzed in 2021 in a 95-page study by the Ministry of Energy and Natural Resources (MERN).

These measures also passed through a “first sorting” after a wide consultation as part of a project aimed at finding new sources of financing for the road network.

The MERN also recommends combining several measures to achieve environmental targets.

Reappointed this week, the Minister of the Environment, Benoit Charette, explained Thursday that these ecofiscality scenarios were for « after 2035 », when no gasoline-powered car can be sold in Quebec and that Gasoline tax revenues « will be substantially reduced. »

Urgency to act

But the MERN seems more impatient than Minister Charette. He specifies in the study that these scenarios are also part of the achievement of the 2030 targets for the reduction of greenhouse gases (GHGs) and petroleum products.

“These measures were chosen by virtue of their necessity as well as their expected results. […] and this, in a relatively short horizon”, can we read.

Two options are then offered to the government, specifies the study: « to fold its arms while waiting for the revenue from fuel taxes to be completely dried up, which will push [le gouvernement] to react in haste without being sufficiently prepared, or to start preparing alternatives without delay”.

Quebec has already imposed taxes on vehicles with large displacement engines since 2016, but the study says that they have no deterrent effect and that GHG emissions should also be taken into account.

The study concludes that to save the planet, we will have to “accept both financial and behavioral efforts”. It also emphasizes that the importance of these eco-fiscal measures is not to be proven.

TAXES STUDIED BY THE MINISTRY

• The tax on the purchase of a polluting vehicle (bonus-malus)

Rebate on the purchase of a green vehicle and a tax for polluting cars.

The study states that it is a “very effective tool in terms of modifying the behavior of vehicle buyers”. These tools are already applied in France (2007), in Norway, in the United Kingdom, in Wallonia (Belgium).

• The kilometer tax

The motorist is made to pay according to the kilometers traveled over a year, with possible modulations according to the time of day, the place or the region where he is traveling, the weight of the car and its emissions, for example.

“The kilometric tax is necessary and applicable in Quebec”, can we read.

« The decrease in revenue from fuel taxes is an indisputable argument for pushing for the institution of a kilometer tax without delay in order to secure a source of revenue for financing road infrastructure. »

• Tolls, registration fees, free public transport and paid parking lots

Among the other measures studied, there are, among others, road tolls, the modulation of registration fees for polluting cars, free public transport and parking pricing.

On this subject, the study cites the example of Plateau-Mont-Royal which, since 2020, has implemented a progressive pricing of parking permits based on the size of the cubic capacity.

“This is an eco-fiscal measure that deserves to be encouraged in order to stimulate the electrification of transportation in Quebec. It is completely legitimate to impose a relatively high tax on fuel-intensive and polluting vehicles.

It will be too late in 2035

Quebec must prepare motorists now for the possibility of new taxes, experts say.

« We have to change something, quite quickly and quite radically, because electrification just won’t work, and roads will face growing funding problems, » said Pierre-Olivier Pineau, professor at HEC Montreal and policy expert. energy. We must raise public awareness of future tax reforms.”

“The energy transition must go through eco-taxation, explains Andréanne Brazeau of Équiterre. The hole to be filled is major, and we must find other avenues of financing, ”she adds about the replacement of lost income from the gas tax.

“It must be done in the next four years. Otherwise, it will be too late to achieve our goals », adds Patrick Bonin of Greepeace, who underlines that « living in wonderland » is not about imposing taxes, but rather about suggesting that we can achieve our targets without strengthening eco-taxation.