Budget Affects Commuters

Consumer tax changes in Wednesday's federal budget are expected add to the cost of Uber rides while ending a public-transit credit.

Two of several Liberal government moves will hit pocketbooks directly, albeit modestly.

Other measures include slight increases — pennies, in fact — in tobacco and alcohol taxes.

The proposed levy on Uber and other ride-hailing services would for the first time impose GST/HST on fares, in the same way they are charged on traditional taxi services. The change will broaden the definition of a taxi business to ensure Uber and other web-based ride-hailing services are required to charge and remit GST/HST, adding to the cost of each trip.

The effect on federal revenues will be modest, just $3 million in additional revenue in 2017-18, but the budget suggests the measure is to help level the playing field and create tax fairness.

The non-refundable public transit tax credit — introduced by the previous Conservative government — will be phased out on July 1. The credit enabled public transit users to apply 15% of their eligible expenses on monthly passes and other fares toward reducing the amount of tax they owe. Ending that tax break is expected to save Ottawa more than $200 million a year.

Moreover, the budget ends the 70-year-old Canada Savings Bonds program this year, now recognized as an inefficient way for governments to raise money.

The government says it will honour the $5 billion of CSBs that are currently outstanding, but won't sell any more.