CAN-ned

I received an unexpected message in my inbox the other day, from a Province reporter, looking for someone to interview for a story about CAN. I’m guessing my kitslinao.ca entry on car-sharing showed up in her google search.

In any case, it turns out that the Cooperative Auto Network has just been audited, and is facing the prospect of a very hefty bill.

Content skived from yesterday’s Province, since I’m too busy to write the story again:

Car co-op dinged for rental tax
Cheryl Chan, The Province
Published: Wednesday, September 12, 2007

The Vancouver Co-operative Auto Network is facing a possible car-rental tax bill of up to $300,000.

“This is a big hit for a very successful small business here in Vancouver,” said New Democrat MLA Gregor Robertson.

The provincial tax of $1.50 per vehicle rental is meant to charge renters, mostly out-of-towners, for the use of roads in B.C., said Robertson.

When the co-op was set up, he said, it was not directed to collect the tax.

The Ministry of Small Business audited the co-op and ruled in February that the tax is payable, retroactive for three years.

Executive-director Tracey Axelsson said the co-op is submitting documents for a formal assessment, which is the next step if the tax is to be paid.

“It could be an assessment of zero

. . . or it could be hundreds of thousands of dollars,” said Axelsson. “At this point, there is no way of knowing which way it’ll go.”

Kitsilano resident Jennifer Wiederick doesn’t need a car, but as one of the 3,500 members of the Vancouver car co-op, she has access to one whenever she needs it.

“It works out great,” said Wiederick, 27. “I save money, mostly on maintenance and insurance.”

Wiederick said it would be “unfortunate” if the co-op was taxed. “The co-op was created with the spirit of reducing cars on the road, so charging them a tax for road infrastructure goes completely against the spirit of things.”

Car co-ops in Victoria and Nelson also may face the tax.

Susanna Grimes of the Victoria Car Share Co-op, which hasn’t been audited, said they are monitoring the case. “It’s a concern of ours, of course.”

Zipcar, a similar but for-profit private company launched in Vancouver last April, pays the tax.

chchan@png.canwest.com

The part I said that wasn’t quoted in the article is that since joining the car co-op, I not only pay less to drive, I drive less. Because I’d have to go through the issue of booking the car, walking to it, taking it where I need to go, parking, driving back and walking home again, short trips are rarely worth taking a car for. I carpool a lot more. I take the bus. I walk.

Belonging to the car co-op means that my driving activity (and impact on local transportation infrastructure) is reduced. I assume it’s similar with other members.

Also, the Hon. Mr. Robertson has it dead wrong when he says it’s a “big hit for a successful small business” because the co-op isn’t a business. Nobody is making money off of the use of these cars (unlike competitor, zipcar, which primarily operates as a short-term repeat-rental agency) – they are collectively owned by the members and shared. Any fees that are paid go toward the ownership and maintenance of these cars and any administrative charges to pay staff to look after the cars’ collective insurance and well-being.

Arguing that because CAN has staff to manage the fleet and members buy shares and pay fees it is a business that owes the rental tax is akin to saying that because I have a mortgage, and sometimes have friends and family stay over (and sometimes stay at their place, where they pay their mortgage) and we pay housekeepers come in to dust and vacuum every couple weeks (I don’t have that – wishful thinking – but if I did), I should be assessed a hotel tax.

I sincerely hope that the formal assessment results in the Ministry of Small Business pulling their heads out of their collective asses and reversing their decision to levy the rental tax.

Because if this action results in an unaffordable special assessment to members, or even the death knell of CAN, I’ll be purchasing a car again (because what I’d spend on Zipcar would amount to a car payment).

And that seems like a lose-lose situation for an already overburdened road and transportation infrastructure, CAN, the environment, my bank account, and my vote for the government who thought levying the tax on CAN was a good idea in the first place.

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3 thoughts on “CAN-ned

  1. Mel

    Wow, that sucks. I’d be really disappointed to see CAN get more expensive or go away entirely. A co-op (not a company!) trying to reduce our collective impact on the environment should be given a tax break, if anything!

  2. Jer

    The rules that apply to coops are significantly different than the rules applied to for-profit businesses. Having worked with the provincial ministry involved (and the specific branch as well) I’ll be interested in seeing how this one plays out.

  3. Erin

    Have you sent a letter to the Ministry of Small Business, and anyone else who might have clout here, like environmental groups, your MLA, etc? If it can be proved that people who use CAN are reducing the amount of cars on the road, I would think that environmental groups, the Green Party, and anyone else concerned with climate change would be CAN’s champions.

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