Finance Minister Proposes to Collect Taxes from Ride-sharing
On Wednesday, Canadian Finance Minister Bill Morneau tabled a budget that, if approved, would force Uber and other ride-sharing companies to pay GST and HST, just like conventional taxis. According to the minister, this initiative aims to give Canada a more fair and efficient tax system, and “level the playing field” for cab services competing with companies like Uber – according to National Observer.
But Uber — which serves more than 40 communities in Canada and employs more than 32,000 drivers — strongly disagrees. On Thursday, the company sent a statement to media outlets to explain that it was asking the federal government for “meaningful consultation” on the proposal, as they collaborate to create “smart solutions.”
Ian Black, regional manager for Uber Canada, said in press release. “This new tax on innovation would hurt over a million Canadians who use ride-sharing to earn income and get around their cities.
At a time when Canadians spend far too much time stuck in traffic — and people should be encouraged to leave their cars at home, take public transit, and share rides — we should be supporting policies that make sustainable transportation more affordable, not more expensive.”
At a press conference on Wednesday, Morneau said Canadians “expect” to pay GST for transportation services and that the hike in taxes makes the system more consistent. Uber fundamentally disagreed, however, with the idea that it ‘levels the playing field,’ and instead suggested that the federal government offer the taxi industry the same exemption on collecting sales tax that now apply to small business owners who have annual sales of less than $30,000.
Uber is a multinational company based in San Francisco, California. According to recently leaked financial documents, obtained by The Information, the company estimated gross bookings from riders worth US$3.63 billion in the first half of 2015.
The company has also been criticized by politicians and labour experts who argue that its drivers face harsh working conditions and low wages.
The Canadian Labour Congress says that it’s only fair to tax Uber. Emily Norgang, a senior researcher for the national union and labour advocacy group, said if taxi drivers making less than $30,000 per year still have to pay GST and HST, there’s no good reason Uber drivers shouldn’t.
Those taxes, she explained, contribute to the road infrastructure used by Uber drivers and taxi drivers alike, and companies like Uber should pay their fair share.
“They should be held to the same standards that local Canadian companies are held to and all taxis are held to,” she said in an interview. “It’s a question of corporate accountability and tax fairness. They have to abide by the same laws everyone else does.”
– National Observer