Raising vehicle fees no better than a tax grab, critics say

By Matt McClure, Calgary HeraldLobby groups at both ends of the political spectrum say the provincial government is breaking a promise to hold the line on taxes by hiking the annual fee to register a car or truck.Both the Canadian Taxpayers Federation and Public Interest Alberta are also upset the $5-a-year increase — announced this week along with a new licence plate design — unfairly targets those residents who can least afford to pay.“They call it a user fee but it’s really a tax, and one of the most regressive ways there is for governments to raise revenue,” CTF Alberta director Derek Fildebrandt said.“They made a pledge during the last election not to raise taxes so instead they’re hiking a fee that already nets the government a lot of money.”Bill Moore-Kilgannon of Public Interest Alberta said the Tory government wouldn’t need to nickle and dime less-fortunate Albertans with fee hikes to try and balance its books if it replaced the province’s proportional levy on income with a more progressive regime.“It’s bad enough that you pay 10 per cent tax on income whether you’re a millionaire or a single mom,” said Moore-Kilgannon, “but it’s even worse that we charge the same fee for a rusting Pinto as we do on a shiny, new Porsche.”The government press release that announced the “Wild Rose Country” slogan would soon disappear from the province’s plates said the fee hike was necessary to “help cover” the one-time costs of production and implementation of new high visibility licences that are estimated to be $15 million.But the increase will generate an additional $24 million for government coffers in the first year as 4.8 million plates are purchased and another $16.5 million more in each successive year as owners purchase new stickers for about 3.5 million vehicles.A spokesperson for Service Alberta said in an email reply to Herald questions that the additional revenue will also be used to fund unspecified improvements at an undetermined cost over an undefined period to the computer systems used to track motor vehicle registrations.“This is not a tax,” said Jessica Johnson, “it is a $5 increase to a user fee which relates to the cost of provision of service.”However, the department’s annual report shows that even without the fee hike the government was already generating a significant profit on its motor vehicle registry.Last year, the registry generated $492.2 million in revenue while the department only spent $17.4 million to provide vehicle licensing services for a net profit of nearly $475 million.“Motor vehicle fees aren’t an illegitimate way of raising money, but the governments should call them what they are, which is taxes,” Fildebrandt said.“We get a piece of stamped aluminum and a sticker and they pad their bottom line.”Even with the fee increase, Service Alberta says motorists will still pay 11 per cent less than the national average to register a personal vehicle each year.Still, department figures show that the $89.45 vehicle owners will soon need to fork over to a registry agent each year is significantly higher than what one would pay in neighbouring B.C. and Saskatchewan where the annual fee is $53 and $68, respectively.“When the Alberta government crows about having the lowest taxes in Canada,” said Moore-Kilgannon, “they’re not talking about all these add on fees which hit the working poor especially hard.”