Cutting corporate handouts could pay for the gas tax cut in Manitoba without breaking the budget
If Manitoba Premier Wab Kinew doesn’t extend his gas tax cut before the end of the year, Manitobans could be waking up to a New Year’s Day tax hike hangover.
Almost one year ago, Kinew cut the province’s 14-cent-per-litre gas tax to ease the pain of inflation and lower costs for families. And it’s been working.
Since the government cut the gas tax on Jan. 1, 2024, Manitoba has had the lowest fuel prices in the country and among the lowest inflation rates.
And it’s meant big savings for families. A two-vehicle family with a minivan and a pick-up truck filling up once every two weeks will have saved about $587 over the last year because of the cut. That’s money that can be used for a couple of big trips to the grocery store instead of being sent to government coffers.
The cut is now scheduled to expire on Dec. 31 if the government doesn’t extend it again.
Kinew hasn’t yet said what will happen to fuel prices on Jan. 1.
Here’s some advice to the premier from taxpayers – extend the cut again.
The NDP election platform says the gas tax will remain cut “while inflation remains high.” The rate of the increase in prices may have slowed recently, but prices for essentials are higher than ever. Since 2020, the cost of everything has increased by about 18 per cent. The price of food has increased by 25 per cent.
“We know Manitobans are still struggling with the impact of interest rates and grocery prices so we’re going to continue to step up and save you 14 cents at the pump,” Kinew said when announcing the last gas tax cut extension in September. Families will still be struggling come January.
Families are paying 25 per cent more for food than they were four years ago, but the average Manitoban is only earning about 16 per cent more money. If the government raises the gas tax again, it will only add to the financial burden for Manitobans.
If the government is serious about its commitment to affordability, it must extend the gas tax cut and continue supporting Manitobans as they cope with the rising cost of living.
And Manitobans are obviously still feeling the bite of inflation because a majority want the gas tax cut to continue. Recent polls show that 73 per cent of Manitobans want the government to extend the gas tax cut again. In fact, 70 per cent want the government to axe the gas tax permanently.
The numbers are even stronger when you take out those who are unsure. For Manitobans who are decided on the issue, 81 per cent want another cut extension and 78 per cent want to make the cut permanent.
And just a little spending restraint could make room in the budget for much-needed tax relief.
Families are pinching pennies to make their budget work; the least that the government can do is the same.
The government recently announced a $23.4 million handout to a Winnipeg bus company to build a new facility and increased handouts in the Manitoba Mineral Development Fund by $2 million. The government also announced that it would be setting up a $50 million so-called Strategic Innovation Fund to hand out more money to corporations in Budget 2024.
The fuel tax used to bring in about $340 million for the government, or about 1.4 per cent of the money the government spends every year. Cancelling those three corporate welfare programs would be enough to pay the fuel tax for almost three more months. After that, the government only needs to find about one per cent more in savings to keep the gas tax cut around for another year.
The government promised time and time again to make life more affordable for Manitobans. Life is still expensive. Kinew needs to extend the gas tax cut and keep Manitobans saving.
Gage Haubrich is the Prairie Director for the Canadian Taxpayers Federation.
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