TAX NEWS - 2010

Ontario Tax: Taxi fares in Timmins hiked 8% due to HST

Fair or not, Timmins residents will be facing an 8% taxi fare increase on July 1 thanks to the new harmonized sales tax (HST).

A delegation representing local cab companies appeared at Wednesday's Timmins Police Services Board meeting -- originally offering to absorb 2% of the increase before a misunderstanding was clarified.

Some members of the board apparently did not originally realize that all 8% of the increase will go to the federal government when the HST kicks in July 1 -- none into the coffers of the cab companies or their drivers.

"We were basically pushed into a corner and told that we had to take 2% less ... they wanted us to take 4% less, but we only agreed to 2%," said Rhonda Thompson, manager of Vet's Taxi, explaining the reason the taxi companies were originally willing to absorb part of the hike.

"It's unrealistic to expect us to take ... it's hard enough to take the two, but any more than 2% out of our own pocket and pay it to the government ... it's a mandatory government tax that they are imposing on us. It's not like we are asking for a raise.

"It's a tax that they are throwing at us, that is the responsibility of the consumer ... not our responsibility, but we are willing to eat up 2% of it ourselves as a show of good faith."

Timmins Mayor Tom Laughren, chairman of the board, attempted to explain the other side of the argument.

"I think part of the reason for that is that back in '08 there was a 33% on the hourly rate, 13% on the one-tenth kilometre rate and 11% increase on the zone meter rate," he said.

"Part of that had to do with the price of gas and I know at that time the price of gas was about $1.50/litre and it's down at a buck, so I think that's where, if there was pressure, I think that's wehre it came from ... saying the rates have already gone up considerably."

Thompson said, "We took that into account, because mornally we would have asked for a raise from you at this point, but we said you know what, OK fine, the gas prices have gone down but they continue to go up on a regular basis just like normal life increases.

"And all other expenses haven't gone down, nothing else has gone down, insurance still goes up, price of vehicles still go up.

"The HST is not a raise, it's just a government tax."

Timmins Police Services Chief Richard Laperriere took expection to the comments about the earlier meetings where he feltthey had a consensus.

"I think we are somewhat confused here today in regards to the presentation you are making reference to the rate," he said. "Just so it's clear in my mind, because to be honest with you I don't think we are on the same page.

"When we had the initial discussions you wanted to increse your rates by 8%.

"No, we just want to add 8% onto our rates to cover the tax of 8%," Thompson responded.

"You don't want to raise your hourly rate, drop rate, kilometre rate, zone meter rate?" Laperriere asked.

"Nothing, other than to be able to add on the tax,"

"You're mandated to give the government an extra 8%, so if we just change it to 8%, then that's it," Laperriere said.

Since the change affects a rate implemented by a City of Timmins bylaw the board passed a resolution asking city council to amend the bylaw to reflect the 8% obligations for the HST.

To accomodate the 8% increase for the HST the police implemented devices on the meter boxes of all cabs will will have to be altered and then verified by Timmins Police Service.