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

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.

'A business can only handle so many cost increases until they have to go ... to the consumer'

Maritime Bus and Coach Atlantic owner Mike Cassidy says the one cent increase will be a big hit to the company's bottom line. (CBC)

Owners and operators of P.E.I.'staxi 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 anddiesel.

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

"Abusiness 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.

Mike Cassidy, the president of Coach Atlantic, questioned why buses weren't considered for exemption as they would help keep vehicles off the road if people make use of public transportation. (Steve Bruce/CBC)

But to offset the cost, the province says they will drop they excise tax by three cents, which meansit will only be an extra cent at the pumps. Cassidy saidfor 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 ownerof 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 fewexemptions 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.

More P.E.I. news

With files from Nicole Williams