Before too long we may not need to fill up at the gas pump

David Crane
Global Issues

Instead of paying roughly $1.25-$1.45 per litre of gasoline, how would you like to pay roughly 20 cents a litre instead? That’s what is possible if you have a hybrid plug-in car that you use mainly to drive to work each day.

The good news is that the automotive industry is undergoing one of its biggest technology revolutions since the inception of the gasoline-powered internal combustion engine and it promises to make us much less dependent on gasoline.

Toyota’s Prius hybrid car was the first to make a big impact among car buyers — it came on to the market in Japan in 1997 and in North America in 2000. Now it is available worldwide. The Prius includes a battery that powers the car but relies on gasoline to recharge the battery.

But now there is a rush on by automakers worldwide to deliver hybrid vehicles, as well as vehicles that are 100 percent electric. Instead of heading for the gasoline station, increasingly car owners will have the option of plugging their cars into an electric outlet at home for recharging, or stopping at a battery recharging station as they drive.

The huge investments by auto companies to develop electric cars is driven by the need to come up with solutions to the threat of climate change as well as concerns over the future price and availability of oil.

There are now about 500 million vehicles in use around the world, but some forecasts suggest the number could rise to 1.2 million vehicles by 2020 as countries such as China, India and Russia embrace the auto industry. Last year, worldwide car sales totaled about 50 million vehicles, according to the International Energy Agency. By 2030, annual sales could be running above 90 million vehicles a year.

Continued reliance on the existing internal combustion engine could send the demand for gasoline much higher, putting even greater pressure on prices, while leading to a sharp increase in greenhouse gas emissions at the very time that the world faces an urgent need to slash such emissions.

A key feature of the new electric hybrids coming onto the market is the use of lithium-ion batteries - a much larger version of the batteries used in cell phones and laptop computers.

General Motors is betting heavily on its Chevrolet Volt, an electric hybrid it will introduce in 2010, if all goes according to plan. Nissan is working on an electric vehicle that will be a plug-in that will not use a back-up gasoline engine, making it the first zero-emissions car. It is working with Silicon Valley entrepreneur Shai Agassi, through his Project Better Place, to bring large-scale adoption of electric cars in Israel. But it is not only the established automakers, from Toyota, GM and Mercedes-Benz to Nissan, Renault and Ford that are looking at electric cars: the new Chinese automakers are doing the same.

As David Sandalow, an energy expert at a Washington think-tank, told a recent U.S. Congressional hearing, “to reduce oil dependence, nothing would do more good more quickly than making cars that connect to the electric (grid).” Plug-in electric vehicles, he said, “can break our oil addiction, cut driving costs and reduce pollution.”

He described how he used his own plug-in vehicle to drive to and from work each day, recharging it at night through a plug in his garage. His car got about 50 kilometres on a charge and the electricity cost him about 20 cents a litre.

But for plug-in electric cars to be really green, it is also important that the electric grid, which they use for recharging, is also green. This is why an effective strategy to move from a dependence on oil to a low-carbon world must also include a shift to low-carbon electricity, including renewables and nuclear.

The transition won’t happen overnight. But consumers will have a growing choice and, with a strong effort, much of our auto population a decade from now could consist of electric vehicles, with far fewer line-ups at the gas pump.

(David Crane’s column appears on Mondays in the Toronto Star. He can be reached at crane@interlog.com)

CFIB issues open letter on fuel costs

Small business calls for tax relief

OTTAWA — Canadian small firms are being hit hard by rising fuel prices and are calling on governments to provide tax relief and assurances that they will not introduce additional taxes, such as a carbon tax. This was the subject of an open letter sent June 3 to federal finance minister Jim Flaherty and provincial/territorial finance ministers by the Canadian Federation of Independent Business (CFIB).

“Any discussion of implementing new fuel or carbon taxes will appear incredibly insensitive to entrepreneurs and the general public who are struggling to deal with the pressure of rising fuel prices,” said Garth Whyte, CFIB’s executive vice-president. “Instead, we need our political leaders to be examining ways of reducing gas and diesel prices through tax relief.”

CFIB is calling on governments to:

• End the 1.5 cent per litre additional federal fuel excise tax originally introduced as a deficit reduction measure;

• End the tax-on-tax anomaly that inflates prices and government revenue by eliminating sales taxes on existing fuel taxes;

• Undertake a review of all forms of fuel taxes — including diesel fuel — in light of the current price environment; and,

• Place a moratorium on any discussions or implementation of additional fuel or carbon taxes.

While CFIB is currently surveying its members across Canada on their views of a carbon tax, a post-budget survey in British Columbia found only 14 percent of BC small firms were supportive (56 percent opposed), even with the promise of revenue neutrality for the provincial government. “While revenue neutrality may be possible for a government, it is virtually impossible at an individual firm level. Many businesses would be hit with far higher additional fuel taxes than any associated tax relief,” Whyte said. “In addition, BC local governments are discussing property tax hikes to deal with their own increased fuel tax bills.”

CFIB is calling on small businesses concerned about fuel costs and taxes to send their views to their respective finance ministers. A fax form is available at www.cfib.ca to raise these issues with government leaders.

Canada Revenue Agency gets poor marks from small business

OTTAWA — The quality of service provided by the Canada Revenue Agency (CRA) to owners of small and medium-sized businesses has worsened since 2001, a new survey from the Canadian Federation of Independent Business shows.

Nineteen percent of business owners say overall service was worse in 2008, compared to 13 percent in CFIB’s 2004 survey and 11 percent in 2001. Among tax practitioners, who are also small business owners, a full 52 percent said service was worse in 2007, compared to 25 percent in 2004 and 38 percent in 2001.

“The transformation of the former Revenue Canada into an agency, the CRA, was supposed to create a more efficient and service-oriented organization. Our members tell us that this is not happening,” said Garth Whyte, executive vice-president of CFIB. “In fact, they feel the CRA treats them as guilty until proven innocent, and that’s not good news for our economy.”

Slow service, lack of easily understandable information and “voice mail jail” were the top concerns in the 2008 survey of about 8,271 business owners and 472 tax practitioners who provide services to small business. Treatment by staff, speed of refunds and the CRA website and its electronic services were viewed somewhat positively by respondents.

Thirty-nine percent of business owners and 65 percent of tax practitioners said the administrative burden associated with taxes has grown in the past three years.

“Tomorrow is the first anniversary of the announcement of the Taxpayer Bill of Rights, but according to our members, there’s not much to celebrate,” said Whyte.

CFIB is calling on the CRA to:

• Clearly define and implement the Taxpayer Bill of Rights;

• Develop an internal culture that seeks to help taxpayers rather than intimidate them;

• Proactively communicate tax policy changes to affected small businesses;

• Develop ways to measure and reduce the tax compliance burden on small business;

• Benchmark and measure customer
service performance;

• Ensure audits minimize time requirements for smaller businesses.