Province extends gas tax holiday until end of year By: Chris Kitching Posted: 10:46 AM CDT Wednesday, Sep. 25, 2024 Last Modified: 6:40 PM CDT Wednesday, Sep. 25, 2024 Updates

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This article was published 25/09/2024 (689 days ago), so information in it may no longer be current.

Premier Wab Kinew’s decision to extend the provincial gas tax holiday is likely going to reinforce the popular support he currently enjoys with Manitoba voters nearly a year after the NDP’s election victory.

Kinew announced Wednesday that he is extending 14-cents-per litre tax suspension for another three months, until Dec. 31. The holiday began Jan. 1 and was initially scheduled to end June 30, but was extended until Sept. 30.

A Leger poll commissioned by the Canadian Taxpayers Federation in August suggested 71 per cent of Manitobans supported another extension. The CTF has called for the permanent removal of the provincial gas tax.

“This clearly helps Manitobans to be able to make their lives more affordable,” said CTF Prairie director Gage Haubrich.

According to a CTF estimate, a family that fills up a minivan and a pickup truck once every two weeks will save almost $600 this year.

Haubrich said the tax only brings in about 1.4 per cent of the province’s revenues — somewhere in the neighbourhood of $340 million — leaving money to spend on priorities.

Fuel analyst Dan McTeague said the extension is “good timing,” as gasoline will be close to $1.30 per litre into winter, when prices are typically lower.

“This will continue to make Manitoba the most affordable place in the country for gasoline,” said McTeague, president of Canadians for Affordable Energy.

The former Ontario Liberal member of Parliament said what remains to be seen is whether the cut shows up on Manitoba’s finances. He described $340 million as “a pretty big hole in the books.”

Finance Minister Adrien Sala is expected to give a fiscal update Friday, a source told the Free Press. The province has said it can afford the tax holiday.

But if the tax is reintroduced at the start of 2025, the political implications for the NDP could be “very painful” if Manitobans’ goodwill goes out the window, said McTeague.

“This clearly helps Manitobans to be able to make their lives more affordable.”–CTF Prairie director Gage Haubrich

The Canadian Centre for Policy Alternatives favours an end to the tax holiday.

“There are many pressing financial needs for the province,” said Molly McCracken, the organization’s Manitoba director. “It’s taking money away that could be used for infrastructure or (public) transit and transportation.”

McCracken said the measure has not led to lower grocery prices, as Kinew expected, nor a break on bus fares.

“The gas tax cut does not help those most impacted by the affordability crisis,” she said. “It benefits vehicle owners. The larger the vehicle, the more they save.

“In the name of affordability, this government needs to do more to help those who can’t afford to buy a car.”

Absent the provincial tax, the price of regular gas was just below $1.30 a litre at many stations this week. Stations charged similar prices the day before the tax was removed, fulfilling an NDP election promise to give some relief to Manitobans hit by inflation.

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In a news release, Kinew said people who drive a pickup truck will save about $14 when they fuel up.

Manitoba’s inflation rate has dropped to within the Bank of Canada’s target range of one to three per cent amid national decline this year.

The Manitoba Bureau of Statistics estimates the gas tax holiday has directly contributed to a decrease of 0.4 percentage points to inflation, the province said.

McCracken said the extension sends a signal to buy gas vehicles amid the global climate crisis. She suggested the tax revenue could be used to help Manitobans switch from fossil fuels to “truly affordable” renewable energy.

Bethany Daman of Manitoba’s Climate Action Team agreed revenue could be directed to a number of areas, including health care or wage increases for government employees.

“This affordability measure is quite concerning, because it is not an affordability measure that takes into consideration all Manitobans, but it costs all Manitobans,” she said.

Shiu-Yik Au, an associate professor of finance at the University of Manitoba’s Asper School of Business, said the NDP’s pledge to balance the budget this term, while trying to pay for election promises and staff wage increases, will not be easy.

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“Every penny not collected from the gas tax has to be collected from some other tax or cut from a service,” he said, noting opinion polls give Kinew the highest approval rating among Canadian premiers.

The extension was met with criticism from the Opposition Tories.

“People are struggling every day with the rising cost of living, housing and groceries, and they need meaningful, long-term relief to support their families,” interim Progressive Conservative leader Wayne Ewasko said in a statement.

“Wab Kinew is stringing Manitobans along three months at a time because he has no plan and he has no vision — just short-term fixes to dodge accountability and distract from negative headlines.”

Kinew recently told reporters his government will be fiscally responsible, while Manitobans tighten their own belts.

At a news conference Friday, he said the government considered input from Manitobans, interest rates and inflation on grocery prices, while making a decision on the extension.

“It’s a balance between all the costs that Manitobans have to pay,” said Kinew. “We can’t go into the grocery store and do this, do that. But, we can go to the gas station and say, you know what, don’t charge a tax on the people of Manitoba right now, let’s save them a little bit of money.”

— With files from Carol Sanders

chris.kitching@freepress.mb.ca

Chris Kitching
Reporter

Chris Kitching is a general assignment reporter at the Free Press. He began his newspaper career in 2001, with stops in Winnipeg, Toronto and London, England, along the way. After returning to Winnipeg, he joined the Free Press in 2021, and now covers a little bit of everything for the newspaper. Read more about Chris.

Every piece of reporting Chris produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.