Federal cabinet minister refutes N.S. finance minister's gas tax claims

Nova Scotia's only federal cabinet minister, Sean Fraser, says Nova Scotia's minister of finance is wrong to blame Ottawa for not being able to lower the province's roughly 15-cents-a-litre tax on gasoline and diesel.

Provincial Finance Minister Allan MacMaster told reporters Wednesday that the federal government forbids any province from lowering the tax because it would be seen as an offset to the federal carbon tax, which has yet to be imposed in Nova Scotia. 

"They've just simply said we can't do it." MacMaster said at Province House. "There is a federal document that you cannot go and offset the carbon pricing because it would defeat the purpose of what they're trying to do, which is trying to raise the price of fuel, so people stop buying it."

But Fraser, MP for Central Nova and minister of Immigration, says Nova Scotia is free to follow the lead of other provinces that have cut provincial fuel taxes as an inflation relief measure rather than a way to circumvent federal law.

"There have been provinces who have done that," Fraser told the CBC in a phone interview Thursday. "In fact, both the government of Newfoundland and Labrador and the Province of Ontario."

• N.S. finance minister says he can't cut a provincial tax on fuel because Ottawa objects

"If the province simply wants to reduce fuel tax, within provincial jurisdiction, they are free to do it, as both provincial Conservative and Liberal governments have, in different parts of Canada," said Fraser.

MacMaster suggested Newfoundland and Labrador was given a pass by the feds because it has a Liberal government. Ontario, however, has a Conservative government.

Fraser also took issue with MacMaster's suggestion that cutting the provincial fuel tax against Ottawa's wishes could cost the province dearly.

"The federal government, we depend on them for a significant source of revenue that comes into the province, MacMaster said Wednesday. "So there's transfer payments, the health transfer, the social transfer."

Fraser called the suggestion Ottawa would cut health transfers or federal funds that help pay for post-secondary education, social assistance, early learning programs and child care, an attempt "to prey on people's vulnerabilities."

"There is an effort to scare Canadians into believing the federal government is going to reduce spending on health care, when in fact every indication suggests that we are going to increase health spending," said Fraser.

"At a time when people are concerned about the quality of health care, concerned about affordability, that kind of attempt to inspire fear in people rather than advance policies that are going to serve their interests is disappointing to say the least." 

The provincial tax, officially known as the motive fuel tax, is expected to raise nearly $260 million for the Nova Scotia government this year.