Archived fact-check: No such thing as a 48% fuel tax in Canada

Headline: No such thing as a 48% fuel tax in Canada

Speaker: Facebook posts

stated on April 9, 2022 in a photo on Facebook:

Ruling statement: In Canada, “if you earn $100 and pay $33 income tax you’re left with $67. You then buy $67 worth of fuel and in doing so pay a 48% fuel tax (fuel tax = $32.16 + $6.70 GST). This means that the government just got $71.86 tax from your hard earned $100.”

By Sara Swann

Date published: April 20, 2022

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  The claim, which was shared by users in Canada, wrongly suggested that the country’s income tax rate is 33%. For low-income earners, the federal income tax rate is 15%. Provincial income tax rates vary between 4% and 15% for the lowest earners.

  
  


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  Nowhere in Canada is there a 48% fuel tax. There is a federal gas tax, a goods and services tax and a provincial gas tax, but these are small fees. Even combined the three types of taxes do not equal 48% of a gas purchase.

  
  

With record-high inflation rates around the world and prices at the pump still high, consumers’ wallets have been hit hard. But some social media posts have exaggerated the drain these high prices have had on people’s paychecks.

An April 9 Facebook post claimed that most of a person’s income was being taxed by the government, rather than going toward goods or services. A similar post was shared by a different account on April 16.

"If you earn $100 and pay $33 income tax you’re left with $67. You then buy $67 worth of fuel and in doing so pay a 48% fuel tax (fuel tax = $32.16 + $6.70 GST). This means that the government just got $71.86 tax from your hard earned $100," the Facebook posts claimed.

These posts were flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

While the claims don’t explicitly say in which country this alleged 48% fuel tax exists, the users who shared the claim on Facebook are both based in Canada. The mention of a goods and services tax (GST) and the use of the dollar sign for currency also indicate this claim is likely referencing the Canadian government. The United States has no national sales tax.

The claim exaggerates how much money the average Canadian pays in income tax and fuel tax.

In Canada, individuals earning less than $50,197 are subject to a 15% federal income tax. If a person makes more than that amount, they are subject to higher income tax rates depending on their amount of taxable income. Only individuals earning more than $221,708 are subject to a 33% income tax. (One Canadian dollar is equal to about 79 cents in the U.S.)

All 13 provinces and territories in Canada also have their own income tax rates, but none are as high as 33%, even for the highest earners. The provincial tax rates vary depending on income, with the lowest earners paying between 4% and 15% in income taxes.

No one earning $100 in Canada would be subject to an income tax rate of 33%, even when combining the federal and provincial tax rates. The area with the highest combined income tax rate is Quebec, where individuals earning less than $45,105 would be subject to a 15% provincial tax as well as the 15% federal tax.

The 48% fuel tax is also far above what Canadians pay at the pump.

The average price for gas in Canada was $1.88 per liter on April 11. (There are roughly four liters in one gallon.) So with $67 a person could fill up their car with about 36 liters of fuel. (The typical car can hold between 45-65 liters of gas.)

That 36 liters of gas would be subject to three types of taxes in Canada: federal gas tax, a goods and services tax (GST) and a provincial gas tax.

The federal gas tax is 10 cents per liter, meaning a person would pay $3.60 for 36 liters.

The claim wrongly calculated that Canada’s GST is 10%; it is actually 5%. For a $67 purchase, the GST would equal $3.35.

Provincial gas taxes range from as little as 6.2 cents per liter to as much as 27 cents per liter. In Vancouver, the area with the highest provincial gas tax, a person would pay $9.72 for 36 liters of gas.

In total, a person living in Vancouver would pay $16.67 in taxes for 36 liters of gas, so just under a quarter of their $67 would go to the Canadian government. People living in other parts of the country, where the provincial tax rate is lower, would pay less in taxes.

Some parts of Canada are waiving this gas tax to give consumers a break while the price of oil is high. For example, last month Alberta dropped its provincial fuel tax of 13 cents per liter while the price of U.S. crude oil remains above $90 a barrel. Policymakers in Ontario are considering a similar provision to lower its gas tax.

Two recent Facebook posts claimed: "If you earn $100 and pay $33 income tax you’re left with $67. You then buy $67 worth of fuel and in doing so pay a 48% fuel tax (fuel tax = $32.16 + $6.70 GST). This means that the government just got $71.86 tax from your hard earned $100."

This claim exaggerated how much Canadians pay in both income tax and fuel tax. Even in areas with higher tax rates, like Quebec, individuals earning $100 wouldn’t pay as much as the claim suggested. In Quebec, low income earners pay a combined 30% in federal and provincial taxes, not 33%.

Also, nowhere in Canada do drivers pay a 48% fuel tax. A person living in Vancouver, where the provincial gas tax is highest, would have $16.67, or just under 25%, of their $67 worth of gas go toward fuel taxes. This is half the amount purported in the claim.

We rate this claim False.

Facebook post, April 9, 2022

Facebook post, April 16, 2022

Government of Canada, "Canadian income tax rates for individuals – current and previous years," Jan. 18, 2022

Revenu Quebec, "Income Tax Rates," accessed April 18, 2022

Global Petrol Prices, "Canada Gasoline prices," April 11, 2022

Government of Canada, "Fuel Consumption Levies in Canada," May 14, 2021

Reuters, "Canada's Alberta to drop provincial fuel tax as oil prices surge," March 7, 2022

CBC, "Ontario government to introduce legislation to lower gas tax: source," April 3, 2022