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Monday, May 28, 2007

Drop gasoline taxes to aid tourism industry,” says consumer group

News release

Paradise, NL, May 28, 2007 – The provincial government should drop a portion of gasoline taxes in the province as an incentive to improve the tourism industry. A cut in the tax would be beneficial to Newfoundland and Labrador residents and those from out of province who see high gasoline pricing as a potential barrier to making the province a vacation destination this year.

“We know that gasoline pricing is high and is expected to stay that way for the rest of the summer but, besides governments’ strategic investments in advertising, it needs to give a financial incentive to consumers who they hope to draw to rural areas to spend some vacation money. Government has to be seen to be doing something for us as vacationers and for those who could potentially want to visit us,” said George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“Last year, we made the call to drop some of the taxes on gasoline. Government said at the time, that they couldn’t. Their reasoning was that high pricing led to a drop in consumption and that meant less taxes collected. Contrary to what government said at the time, that’s not how it worked out. Last year, government collected $145 million, well up from the $142.5 collected in the year previous. This year, they are projecting nearly $147 million to be raised through gasoline taxes. Past numbers alone prove that people still had to buy gasoline, although the price was still high. They just didn’t go out of their way to visit as in other years.

“The increase in tourism numbers for the St. John’s area showed that there was more airline traffic into the city. Tourism numbers were up slightly in the St. John’s and surrounding area last year, but rural areas suffered a different fate. Rural areas didn’t have that same advantage and we need to give them a fighting chance at getting tourism revenue up. We also need to give the Newfoundland and Labradorian tourist the incentive to stay at home; give them a chance to explore our own province.

“Numbers were down from years previous by a few percentage points. Last year, we saw a sharp upwards increase in pricing that peaked during the first week of July. This year, they’ve hit last year’s numbers already. Pricing is expected to stay higher and for a longer time this summer. That could mean trouble for everyone and we’ll need to depend more on our own people to support our rural tourism markets.

“I think that consumers here already recognize the need for road and bridge work. We also have heard that government is intent on spending a “record” $66 million on roads and related infrastructure, a far cry from the money they have collected in the past from gasoline and other motive taxes. We’re not asking for much besides recognition from government that we have problem with high pricing. A cut of some four cents on a litre in gasoline taxes for the summer is not an unreasonable amount to ask for. What it symbolizes is that recognition, that as tourists and consumers, we are made to feel that we’re welcome at home too.”


For more information, contact;

George Murphy
Group researcher/ Member
Consumer Group for Fair Gas Prices
(709)685-6186 cellular
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