Gas tax to return to Manitoba on New Year's Day, premier says
Rate will be 12.5 cents a litre following yearlong fuel-tax holiday
The provincial fuel tax in Manitoba will return in the new year, albeit down 1.5 cent per litre from its level prior to a one-year holiday throughout 2024.
What's more commonly known as the provincial gas tax will return on Jan. 1 at a rate of 12.5 per cents a litre, Premier Wab Kinew said Monday morning in a statement.
The tax was 14 cents a litre prior to 2024, and Kinew promised in March he would "never let the gas tax get as high" as it was under the former PC government.
Greg Selinger's NDP government raised the tax to 14 cents a litre in 2012. It remained at that level during the Brian Pallister and Heather Stefanson PC governments.
"Our government kept our word. We said we'd cut the gas tax and we did," the premier said in a statement. "Now we're going further by bringing in a permanent cut to the fuel tax to make it one of the lowest in Canada."
The effective cut in the rate from 2023 to 2025 will be 10.7 per cent.
Kinew claimed in his statement the one-year gas tax holiday reduced inflation in Manitoba.
In an interview on Monday, Finance Minister Adrien Sala said the one-year pause saved the average two-car Manitoba family somewhere between $500 and $600 in 2024.
The gas-tax holiday also deprived the province of approximately $340 million in revenue, based on figures presented in the provincial budget.
Based on that figure — but not accounting for any growth in gross fuel sales — a 12.5 per cent gas tax would provide the province with an additional $304 million in revenue in 2025.
This might help the province reduce its deficit for the 2024-25 fiscal year, which ends on March 31. The 12.5 per cent gas tax will be applied during the final three months of that fiscal year.
Earlier in December, Sala said the projected deficit for 2024-25 would be $1.309 billion, or $513 million more than he projected when he presented the budget for this fiscal year.
Sala said the additional revenue from the return of the gas tax was factored into that deficit projection.
He said the revenue from the tax is required to fund provincial programs.
"We need to balance the need to improve affordability with the need to ensure that we can make the investments we need in health care, education and other priorities of Manitobans," Sala said in a telephone interview.
Lauren Stone, the Progressive Conservative finance critic, said Manitobans are going to "feel the pinch" of the return gas tax and might not be aware it's coming.
"The NDP has announced this two days before Christmas while Manitobans are busy with the holiday season," Stone said at the Manitoba Legislative Building.
The Canadian Centre for Policy Alternatives, a left-of-centre policy think tank, praised the return of the gas tax, opining the measure will have both fiscal and environmental benefits. The Canadian Taxpayers Federation, a right-of-centre think tank, panned its return as another measure that will make consumers shell out more money.
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