Fury road: New taxes hitting vehicle-based businesses right in the tank

Businesses that rely on four wheels to get around are facing a double whammy this month as the HST rises and a new insurance tax takes effect.

Taxi driver Richard Bohlke said Monday the two-point HST increase (on everything from gas to car repairs) and the 15 per cent insurance tax will eat into a thin profit margin, already hurting with an increase to gas taxes earlier this year.

"It really devastates because it comes off my bottom line as a broker," he said.

"Everything that was minimal earnings now becomes less, 15 per cent less."

Bohlke said the up-and-down nature of the taxi business makes it hard to estimate what the tax hikes will cost him, but he added the industry is tough enough already.

"Some days it doesn't pay to get out of bed," he said. "Every day this car goes to the pump, twice a day. It affects it."

Rates may need to be raised, cabbie warns

Tourist season is easing the pain somewhat for cabbies right now, said Bohlke, but he added the new taxes are hampering people trying to make a living.

He said he wouldn't be surprised if taxi companies seek to raise rates soon.

"The general public have to know that it's not us being price gouging, it's the simple elements of what we're up against -- the gas tax, the new tax on July 1, and the list goes on. Who knows what's to come?"

Courier Ken Ploughman said the insurance tax will hit his business especially hard.

"My 15 per cent is a fine chunk of change," he said. "We're out there every day at peak times, so we're higher insured."

He estimates he'll pay at least $3,000 a year more in fuel and insurance costs alone, and that's before other taxes like higher income tax rates and the debt-reduction levy is figured in.

"That's straight out of my pocket," he said. "I've said to some of my customers lately, since the budget news came out, that I feel I could be working for charity. That's really not the way to go."