Saturday, November 04, 2006

A first draft of the petition - tax credits for cyclists

First - I just found a WWF petition regarding Kyoto that people might like to sign.
World Wildlife Fund petition for Canada to meet its Kyoto Targets

Second - Below is my first draft of the petition regarding a tax credit for cyclists. I welcome any and all comments /suggestions. I'm sure there are some good editors out there and people with good ideas. Let me know what you think. After we go through a couple drafts and are happy, I'll find a place on the web to post it for people to sign.

The addressees are the Minister of the Environment (Ambrose), the Minister of Transportation (Cannon), the Minister of Finance (Flaherty) and the Commissioner of the Environment and Sustainable Development (Gelinas).

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Dear Ms. Abrose, Mr. Cannon, Mr. Flaherty, and Ms.Gelinas:

At a time when the international community is focusing on the environmental degradation of the planet with initiatives such as the Kyoto Accord, we, the undersigned, would like to offer one more way the government of Canada could combat climate change.

In the summer of 2006, the Canadian government very wisely offered tax breaks to users of public transit.

At that time Mr. Flaherty said “Gridlock has become one of the most pressing issues across the GTA, eroding the quality of life and having a negative impact on business and productivity. Our government’s new transit tax credit will make transit more affordable, giving people even more incentive to park their keys and leave their cars at home.”

Ms. Ambrose additionally said “The transit tax credit will not only save people money, but by taking public transit Canadians will be helping to improve our environment. The transit tax credit is part of our government's made in Canada environmental plan. Our transit tax initiative will take the equivalent of 56,000 cars off the road each year which will significantly reduce greenhouse gases here in Canada."

Department of Finance Canada (2006). Taking public transit is now more affordable in Canada. Retrieved November 4, 2006 from http://www.fin.gc.ca/news06/06-031e.html


It seems obvious to us that a similar tax credit should be offered to the community of bicycle commuters.

Commuting by bicycle has the same environmental benefits as commuting by public transit.

However, commuting by bicycle has health and economic benefits which make it far more worthy of tax credits than public transit.

According to the Canadian Fitness and Lifestyle Research Institute:
Current estimates place the cost of physical inactivity in Canada at $5.3 billion ($1.6 billion in direct costs and $3.7 billion in indirect costs) and the cost of obesity in Canada at $4.3 billion ($1.6 billion of direct costs and $2.7 billion of indirect costs) in health care expenditures. This represents the totaleconomic cost as 2.6% and 2.2% respectively of the total health care costs in Canada. There is concern that chronic disease resulting from obesity may threaten or cripple the health care system in Canada.
Canadian Fitness and Lifestyle Research Institute. 2004 Physical Activity Monitor and Sport. Retrieved Nov. 4, 2006 from http://www.cflri.ca/eng/statistics/surveys/pam2004.php

As well, in 2003 the Federal and Provincial/Territorial Ministers Responsible for Sport, Recreation and Fitness set a national target to increase levels of physical activity by ten percentage points in each province and territory by the year 2010. A primary reason that they set this target was that “Physical inactivity levels in Canada remain a serious public health burden. Fifty-five percent of Canadians do not meet minimum guidelines for regular physical activity necessary to attain health benefits. Physical inactivity increases the risk of chronic disease, premature death and disability.”
Government of New Brunswick. (2003) News Release: Federal and Provincial/Territorial Ministers Responsible for Sport, Recreation and Fitness Target Increase in Physical Activity. Retrieved November 4, 2006 from http://www.canadianheritage.gc.ca/pc-ch/news-comm/ce021712_e.htm

As cycling would combat climate change by removing people from their cars, and ease the burden on the health care system by helping people maintain an active lifestyle, we feel that it is almost imperative to offer a tax credit to bicycle commuters.

Although bicycling does not require fuel costs, it is not a cheap activity. After the initial purchase of a bike, miscellaneous costs include, but are certainly not limited to, locks, tune-ups, replacement tubes, waterproof clothing, winter clothing, chain oil, tire liners, air pumps, cleaning tools, storage stands, and helmets.

The government could provide a tax credit the following way:
a) Require cyclists to provide proof that they use a bicycle to commute to and from their workplace. This could be done via a letter of confirmation from their employer.
b) As it would be hard to tally up every expense that cyclists incur, the government could provide credits proportionate to a cyclist’s weekly mileage.

In comparison to a transit user who spends $80.00 per month on a transit pass, and will save $150.00 year with the government tax credit, we feel that the tax credit for cyclists should be set in such a way that cyclists receive double the savings as do transit users, to account for the additional health cost savings associated with cycling and which do not happen through use of public transit.

Please encourage Canadians to commute by bicycle by offering them a tax credit to do so. Please help us meet our Kyoto goals. Please help us save the planet.

12 comments:

Timon said...

Good work, tuco.

I'd sign this.

ggdub said...

Ha! I was going to leave a comment wondering how you could prove this to Canada Revenue, but you got me right at the end of your letter. Great idea. I must admit, I was feeling seriously left out when they mentioned the public transit tax credit, but then I figured it was still a gazillion times better than giving tax credits to business that buy H2's, like they do south of the border.

ggdub said...

ps.- The tricross would be a fine bike. However, if you can find a dealer in the GTA, check out Brodie's cross bikes. They're a little more commuter friendly. If I didn't already have a Kona, I'd be buying a brodie (They're canuckian too).

Vertigo said...

Tuco,

As I read the first half of your letter, I thought `He needs to mention the physical activity problem...` You incorporated it nicely.

Maybe it would be helpful to frame it this way...

The Govt has extended tax breaks to people who leave their cars at home to take public transit to work, and they have now extended tax breaks to those who are enrolled in physical activity programs (maybe its just for kids...). These are both good ideas.

However, people who bike or blade or walk to work, while they arguably fall into both categories (those who leave their cars at home and those who exercise regularly), they are excluded from the tax benefits.

Curtis said...

I'd sign it in a hearbeat...if I were CANADIAN! Aaaaaaaaargh!

What a great idea, and astute to point out the health benefits of rising up off one's fundament in addition to the ecological intelligence.

Great work. I'm impressed, for whatever that's worth.

Maury said...

Tax _credits_ work by returning money collected in taxes. The public transit credit works because you pay GST and PST on your metropass. A metropass can only be used for public transit. Thus, there is a 1:1 correspondence between the tax you paid on the metropass and the tax they didn't think you should have paid.

Now how would this work for a bike? For one thing the tax is collected on a wide variety of items, some of which are multi-purpose. Is that wrench being used only for your bike? Can you prove that? How would you do so? I guess you could simply drop GST on bikes, but what about downhill bikes or cyclocross?

And how do you prove you only use your bike to go to work? Is a letter from your company really proof of that? How would they know? And who's going to read the letters? Some tax clerk in Ottawa? Oh, THAT sounds cheap. And I love the part about weekly mileage, no way anyone could possibly make an inaccurate claim there, right? Hey look, my Cat Eye says I biked 1 billion km last week, you owe me 1 MIIIIIIIlion dollars.

I'm all for getting more people on bikes, but this proposal is sophomoric. And let's be honest here, do you really think a 5% cost difference is what's keeping people off bikes now?

Tuco said...

I hadn't clued in to the nice correlation between the tax on a metropass and the tax credit the gov. gives back when you buy the metropass. That is a lot easier than trying to figure out what sort of credit to give back to cyclists.
However, I don't think that this is an insurmountable problem. And the mileage isn't that hard - anyone could use google maps to get the mileage between a person's home and their office.

Anyway... there are many things to figure out. Doesn't mean we can't try.

Timon said...

Here's an idea that would create additional administrative costs initially (both for gov't and individauls), but would allow for a more realistic means of monitoring specifically commuter cyclists.

A commuter license.

That way people have to actively apply and participate as "commuters" and not "down-hillers" or "tour-de-Francers".

I don't think any of this discussion is "sophomoric". It's good to throw around ideas about this. I think that it is inevitable that commuter cyclists will one day derive tax benefits or some legal benefits in favour of drivers. I also think that it will necessarily be clumsy and inaccurate at first because it is so difficult to monitor. This means it will evolve and improve with time. Therefore, we need to discuss it as often as possible and execute it as soon as possible.

As for tax credits ... perhaps we should propose this to take the form of non-refundable tax credits, like the Education Amount.

Timon said...

Is the motivation for proposing this tax-credit to get more people cycling (i.e. make a dramatic difference in the number of cyclists)? or is it about giving benefits to those who already do it and about encouraging those who are likely to do it with only a little bit more incentive.

I didn't think tuco was proposing a cycling revolution with this tax credit.

(sorry for the back-to-back posts, tuco. my wheels are spinning!)

Anonymous said...

I support removing GST and PST on bikes and bike parts, clothing and equipment.

It will not get masses of bikers on the streets. But, like the metropass reduction, every bit helps.

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As for more progressive ideas. Lets just dream for a moment...

Right now there are car insurance companies who have figured out that it is profitable to install GPS monitors in cars, collect and act upon the data.

If the numbers worked out, I would LOVE to have GPS monitoring on my bikes, which could verify that I always bike to work.

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So what's the price of carbon?

"The right to emit the equivalent of one metric ton of carbon dioxide now sells for $3 to $10 in Europe". Which is $3.38 CDN to $11.28 CDN.

Or using US numbers, $99 US / 18 tC = $6.25 CDN/ tC.

Or using Brit numbers, 70 GBP / Ton of Carbon = $150 CDN /tC.

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So how much gasoline does it take to make a ton of CO2?

1 ton of CO2 is 103 gallons of gasoline.
1 metric ton of CO2 is 114 gallons of gasoline.

Convert using 3.785 US Gallons per Litre.

Gives
1 ton of CO2 is 390 litres of gasoline.
1 metric ton of CO2 is 431 litres of gasoline.

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So if we (Canada) agreed to meet our Kyoto commitments and pay for our excess carbon emissions. It would be reasonable to assume that we would pay cyclists the market rate for a ton of carbon for every measured ton reduced (minus overhead).

How much what is a reasonable estimate of the cost of carbon emissions per litre of gasoline?
$3.38 / (431 L/tC) = $0.008/L cost for a ton of carbon.
$150 / (431 L/tC) = $0.35/L cost for a ton of carbon.

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Lets consider an unrealistic ideal scenario; 100% transfer of money from carbon tax to cyclists with no overhead.

Say the average car gets 7 Litres per 100km or (235.2209 / 7) = 33mpg.

Then the ideal scenario would have a subsidy to cyclists of
7*$0.008 / 100 = $0.00056 per km
7*$0.35 / 100 = $0.02450 per km

I've biked about 2500km this year so that's worth about $1.40 or $61.25 of equivalent carbon reduction.

I've spent $800 on bike parts (rims, derailleur, tires, tubes, chain, pannier, pannier holder, bottles, shorts, pump, lights, bell).

So a GST reduction ($40) is hard to justify (once you consider overhead) purely using the price of a ton of Carbon.

Now what about the owner of this blog?
60km a day * 50 weeks * 5 days a week * $0.00056 per km = $ 8.40
60km a day * 50 weeks * 5 days a week * $0.02450 per km = $367.50

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I wonder if the tax break on metro passes was evaluated based upon cost of carbon. If so what numbers did they use, if not, what did they value a vote at? ;)

Anonymous said...

That's awesome.

It's not so far-fetched either. Think of the somewhat analogous situation with homes on Solar power. They get paid for any of the energy they give back to the grid.

steve said...

Great idea. I think there should be some incentives for employers, landlords, etc to provide facilities for showers, changing rooms and bike lockers in order to complete the circle. I'm lucky in that my employers think that me riding to work is a good thing and have provided me with access to a secure storage locker (that I need 3 keys in total to access) and a back room in the office to change in - no showers, though. Other people in the building I work in are stuck locking their bikes to a bike rack at one of the entrances to the carpark, exposed to all the weather and passing foot traffic; not something I'd want to do with around $200 in lights alone on my bike! I suspect bike lockers alone would cause more people to bike in, and any landlord operating a parking card type system would, I suspect, prefer to get $30/month apiece for the space used by 4 bike lockers instead of $100/month for one car in the same amount of space, if only the price of the lockers weren't so high!