Legault dismisses plans to freeze Quebec gas tax amid rising cost

Quebec Premier François Legault said Tuesday that while he recognizes inflation is hitting households hard, he has no intention of freezing rates or reducing the provincial gas tax in the next provincial budget, as Conservative Party of Quebec leader Éric Duhaime is calling for.

At a news conference in Longueuil, Legault reiterated his intention to use the March 22 budget to hand out cheques to taxpayers, saying details will be released when the budget is tabled, along with other measures to help with the rising cost of living. 

"I see the opposition suggesting freezes: freezing hydroelectricity [rate] increases, freezing rents, removing gasoline taxes," he said.

"I think if we do that, it means we would be helping those who consume more," he said.

Earlier that day, Duhaime called on the provincial government to follow Alberta's lead and temporarily suspend the provincial gas tax to help put more money in Quebecers' pockets.

"We have never paid so much for gas," said Duhaime, referring to a "phenomenal increase" caused by Russia's invasion of Ukraine.

The situation in Alberta, however, is very different.

A similar suspension in Quebec would deprive the government of significant revenue. In contrast, Alberta has seen a major increase in the royalties it collects for the oil extracted on its territory since the price of a barrel of oil has risen.

These royalties have risen steadily from one per cent, when oil was trading at $55 per barrel, to their expected peak of 9 per cent since the price reached $120 per barrel.

In dollar terms, the province's revenue increases by $400 million to $500 million every time the price of oil rises by a dollar, experts say, and the price of a barrel has increased by more than $65 per barrel since January 2021.

The loss of revenue from the Alberta provincial gas tax will therefore be greatly offset by the surge in royalties for a little over more than a year. 

Addressing inflation

Legault also indicated that he will talk about inflation as soon as the byelection on Montreal's South Shore is over. 

"I think this is a subject that is becoming more and more unavoidable. We have seen it with the price of housing. It is true, there is a lack of housing in Longueuil, including affordable housing."

He acknowledged it is necessary to use the federal funds allocated for the construction of affordable housing — an amount of $338 million from the Rapid Housing Initiative (RHI) program — as soon as possible.

"We need to reduce construction times. (…) The idea is to move faster," he said. 

Housing and home ownership

Hence the intention, again repeated, to "put money back into the pockets of Quebecers, because it is not only those who need affordable housing who have problems. Middle-class families are also struggling to pay rent increases," he argued.

Legault also noted that the hope of becoming a homeowner is increasingly becoming an unattainable dream for young people due to an unprecedented overbidding on the real estate market.

His comments on the subject, however, indicate there will be no measures dedicated to the problem in the next budget and that people will have to wait for the election campaign in the fall. 

"There is a campaign coming up for the general elections," he said. "I think the political parties will force themselves to have home ownership plans, as we have often seen in history. I urge you to be patient."