Uber urging Canadians to lobby against GST

Ride-sharing company sending out emails with links to Members of Parliament.

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Uber Urging Canadians:

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Uber is doubling down its opposition to Canadian sales tax by emailing customers and urging them to lobby their local Members of Parliament on its behalf.

The personalized emails are telling customers that the federal government is implementing a “new tax policy” that will drive up the cost of Uber’s ride-sharing service by up to 15 per cent. The messages contain links that allow recipients to quickly and easily register their opposition with their respective MP:

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Uber has also launched a website that urges Canadians to “stand up for affordable transportation.” The website explains that small business owners – including many Uber drivers – do not currently have to pay sales tax if they make less than $30,000, but that is set to change:

“Most Uber partners drive occasionally and never reach the $30,000 threshold. They are high school teachers who drive during their summer breaks, retirees looking to supplement a fixed income, and parents trying to put money away for a family vacation. This newly announced government policy will mean Uber partners lose the small business tax break that almost everyone else gets, and increase the price of rides for everyone.”

The moves follow Uber’s reaction to the federal budget last week, which will see the 5-per-cent Goods and Services Tax applied to its services as of July 1. Uber said the plan is “a tax on innovation” and requested a consultation on the matter with the government.

A spokesperson for Uber Canada declined to make country manager Ian Black or Canadian public policy lead Adam Blinick available for an interview on Wednesday.

There is a fair bit of disingenuousness going on here. For one thing, the emails being sent to customers are potentially misleading since they identify the GST/HST requirement as a “new tax policy.” It’s only below the MP link that the term GST or HST is mentioned.

Anyone glancing at the message quickly could thus be fooled into thinking this is indeed some new tax, rather than an effort to bring the company into compliance with existing laws.

And the law does exist. While Uber doesn’t consider itself a taxi company, taxi companies and their drivers do indeed pay sales taxes and charge customers accordingly, with the levies built into fares.

Secondly, as University of Ottawa law professor Michael Geist points out, Uber is already in compliance with sales tax requirements in certain parts of Canada. Individuals in Montreal, for example, must have GST and HST registrations to become Uber drivers there.

Thirdly, in Barrett Tax Law’s analysis, Uber may be ripping off and putting drivers in tax jeopardy with its obstinance to the GST. In most of Canada, the company doesn’t allow drivers to charge sales tax, yet individuals who earn more than the $30,000 must remit that tax to the government anyway.

Anyone who isn’t aware of that requirement is likely losing money or risking repercussions:

For example, if an Uber driver makes $100 nightly driving for Uber, in reality, (in Ontario), the Uber driver has actually made $88.50 and $11.50 of HST/GST which must be remitted to the federal government. If Uber drivers are not aware of this requirement they will not register for HST/GST, nor will they remit the money to the federal government. Once this occurs, the Uber driver may be audited in future, and penalized large amounts for failure to register and remit the proper amounts to the federal government.

Lastly, there is also the basic issue of how Uber thinks it’s special. If Canadians are going to lobby against paying sales tax on Uber rides, shouldn’t they also oppose paying similar charges on gasoline, phone services, electricity and even ice cream cones?

Paying GST on ice cream is, after all, a tax on deliciousness – and that’s just not fair.

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1 Comment on Uber urging Canadians to lobby against GST

  1. It isn’t the drivers or the companies who are “paying” the tax, but the consumers of the service, the customers. Drivers pay LOTS of HST on gasoline, car repairs, maybe even bottled water, that currently (if unregistered) remain as an expense – but when registered, will reduce the tax they need to pass on. The key is that Uber fares need to reflect / track the HST, for customers and drivers. The real alternative, that Uber is not pushing, is to take the HST off of taxi fares.

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