Taxis, buses to feel the sting of P.E.I.'s new fuel tax

Owners and operators of P.E.I.'s taxi and transportation industries are preparing to face the sting of the new fuel tax coming to P.E.I. in 2019.

Instead of a carbon tax, Islanders will have a one cent increase at the pump for gasoline and diesel.

While that may be a small fee for some, Maritime Bus and Coach Atlantic owner Mike Cassidy said it will be a big hit to the company's bottom line.

"A business can only handle so many cost increases until they have to go right back out to the end consumer, and take the increase, and charge the ultimate end consumer," he said.

The federal government imposed a new fuel tax on P.E.I. It will now cost an extra four cents for every litre of gasoline or diesel.

But to offset the cost, the province says they will drop they excise tax by three cents, which means it will only be an extra cent at the pumps. Cassidy said for his company, it will still be a hard hit.

"When you're a company that purchases on average 10,000 litres a day, any price increase at the pumps has a fiscal monetary issue to the operation of our company," Cassidy said.

Cassidy says while one cent doesn't sound like much, it will add up to $40,000 to $50,000 a year in additional spending for a company of his size. 

"A business can only handle so many cost increases until they have to go right back out to the consumer."

Impact bottom line

Kirby Eldershaw, the owner of Yellow Cab, said he doesn't think his company will see a huge impact.

"We'll probably absorb the cost … we really don't want to raise rates for our customers and have them pay it," he said. "It's one cent, forty cents a day. I don't think we're gonna put it back to the customer."

While the new fuel tax won't take effect until April 2019, it will come with a few exemptions including fishing boats and tractors used for farming.  

But Cassidy questions why buses weren't considered for exemption as well, considering its increased seating helps keep vehicles off the road if people make use of public transportation. 

"Perhaps we should all realize that we have a responsibility to look after our climate," he said.

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