Drivers fuelling up with a sense of dread as gas tax return looms By: Scott Billeck Posted: 4:32 PM CST Tuesday, Dec. 24, 2024 Last Modified: 7:13 PM CST Tuesday, Dec. 24, 2024 Updates

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Asit Patel’s move from Winnipeg to Calgary in a few weeks will be a little more expensive than he’d hoped.

That’s because the provincial gas tax is being reinstated next Wednesday, and the 12.5-cents added to every litre pumped is going to be an unwelcome goodbye hug when he and his family bid farewell to Manitoba.

Premier Wab Kinew announced Monday that the tax, which was 14 cents per litre before the government temporarily suspended it a year ago as an “affordability measure” to help Manitobans navigating inflationary prices on almost everything, was going back into effect Jan. 1.

Patel, his two parents, brother and sister-in-law are hoping to find more opportunities and a better way of life in Alberta.

“I’m expecting around $600-$700 (for fuel),” Patel said Tuesday while waiting at 204 Fuels on Waverley Street, noting he’s renting a U-Haul truck to get the family’s bare necessities to their new home.

“We’re basically going to Calgary with three beds and a couple of boxes. We’re starting fresh.”

Patel said his family can’t afford to take any more than what would fit in the back of the rental truck, meaning some of their belongings will be left behind.

Moving companies are out of the question. It’s too expensive, he said, partly because of high fuel prices across the Prairies.

“We know we have to pay the (fuel) taxes, but it needs to be reasonable,” said Patel’s father Umesh. “Every common person will be affected by this.”

The province said the 1.5-cent-per-litre cut from the previous levy will be permanent.

“Our government keeps our word,” Kinew said in a news release Monday. “We said we’d cut the fuel tax and we did. We said it would last 12 months and it did. Now we’re going further by bringing in a permanent cut to the fuel tax to make it one of the lowest in Canada.”

Kinew’s government revealed last week that its projected 2024-2025 deficit has soared by $513 million, to $1.3 billion.

The result of the yearlong gas tax holiday cost the province an estimated $340 million in lost revenue in 2024.

The province expects to collect $78 million per quarter from the reinstated 12.5-cent fuel tax, which will be a revenue loss of $28 million over the fiscal year compared to the estimated $340 million that would have been collected at 14 cents per litre.

Finance Minister Adrien Sala wouldn’t say why government decided to cut the tax by 10 per cent or how it arrived at that figure.

“We knew that the gas tax holiday had an enormous impact for Manitobans in saving them money,” Sala told the Free Press Monday. “Manitobans continue to face affordability challenges and we wanted to make sure we continue to provide them the help that they need.”

The 204 Fuels gas bars have some of the lowest prices in the city — charging 111.9 cents per litre of regular gas when he was filling up, a cent cheaper than Costco on McGillivray Boulevard, which requires a membership to get the discounted price.

A Shell gas bar on south Pembina Highway near the Perimeter posted the regular fuel price at $129.9 per litre Tuesday.

Sandeep Hangra said she’s disappointed that the gas tax is coming back. Her husband recently lost his job as a long-haul truck driver and is now working as a driver with a ride-hailing company to try to make ends meet.

They’re thinking about moving back to India because life has become too expensive here, she said. When they arrived in Canada in 2017, the monthly rent for their apartment was just under $1,000. It has since doubled.

“There’s too much inflation and no jobs,” she said.

Meanwhile, Christina Harris said the gas tax is returning at a bad time.

“Especially with the cost of things going up, it’s just that much more on top of everything else,” she said.

Harris said she expects to wait in gas bar lines over the next few days in order to fill up at the best price before the tax kicks in again.

“It makes a difference when you commute back and forth to work, having to get gas two or three times per week,” she said. “It adds up.”

Harris is expecting to feel the impact of rising fuel prices, but as a motorist, she knows there aren’t many alternatives.

“We don’t have a choice,” she said.

Gas tax holiday critics, however, support its return.

Molly McCracken, Manitoba director of the Canadian Centre for Policy Alternatives, guessed that one in five residents of the province didn’t benefit from the yearlong “affordability measure,” presumably because they neither own nor have access to a vehicle.

scott.billeck@freepress.mb.ca