Canada announced its new national budget on Wednesday and one of the announcements by Prime Minister Justin Trudeau’s Liberal government could bring Uber drivers closer to cabbies. The country is now seeking to end a tax advantage on ride-sharing companies such as Uber Technologies Inc. Doing so would put the company on a more even playing field with the traditional taxi industry.
In the budget announcement, the federal government said it would amend Canada’s Excise Tax Act, which would redefine what a ride-sharing and taxi company is. This would mean those companies would have to collect goods and tax (GST) on every ride. Taxi companies are already required to do this, Uber and other ride-sharing firms are not.
"It's important to have a tax system that's fair and less complex," Finance Minister Bill Morneau said when asked about the matter during a news conference on the budget. "With respect to Uber, what we've done is say there's a level playing field. If you're in an Uber or if you're in a taxi, you pay GST (goods and services tax). That's consistent with what Canadians expect, and we think it's the right approach."
Uber spokesman Matt Kallman said: "We are reviewing the budget and its implications and will have more to say in the coming days."
Many taxi operators believe Uber has had an easy ride as its adoption around Canada has increased. The industry believes regulatory amendments in provinces have been too lenient and have favoured ride-sharing companies over traditional cabbies.
A change in the tax law would mean Uber would have to increase fares across Canada to account for the tax payment.