Manitobans can expect to see even cheaper prices at the pump as the provincial government unveils its plan to temporarily pause its fuel tax.
The provincial government wasted no time in the New Year revealing that it would pause the tax as part of its promise to provide economic relief to residents.
In contrast, Premier Danielle Smith faces public backlash for her decision to reinstate Alberta’s provincial fuel tax in a reduced form after a lengthy pause.
Albertans now have to pay nine cents per litre in fuel taxes, as opposed to the previous rate of 13 cents per litre.
Before implementation, Alberta’s government suggested re-imposing the fuel tax, which faced opposition from the Canadian Taxpayers Federation (CTF) and the opposition New Democratic Party (NDP), as previously reported by True North.
CTF’s Alberta director Kris Sims joined True North’s Andrew Lawton to discuss Alberta’s tax reinstatement, which came into effect on the first day of 2024.
One year ago, Alberta Premier Danielle Smith was praised for her decision to temporarily suspend the fuel tax, explained Sims. This relief led to Albertans saving $10 when filling up a minivan, $15 when filling a pickup truck, and about $130 for a trucker filling up his big rig. These savings added to about $100 million a month province-wide.
The initial relief was tied to the price of a barrel of oil. When the suspension was announced, the Alberta government said that if the price of oil dropped below a certain threshold, it would reimplement the tax.
The CTF would not be urging Alberta to extend the tax relief if Alberta was near a deficit. Sims explained that debt is a major issue, with Canadians spending billions on paying down debt annually.
“That isn’t the case in Alberta. They have a $5.5 billion surplus after a year of not collecting this tax. So mathematically, it’s a big head-scratcher as well,” said Sims.
The province has agreed to use 50% of its cash surplus towards paying down the debt. Even still, Alberta could use their surplus to pay down debt, keep the tax off, and still have more than a $1 billion surplus by budget time.
Sims explained that while there is a math aspect to the tax, the political aspect needs to be considered as well.
When initially implementing the pause on fuel tax, Smith said she was doing this because people were struggling to afford the basics because inflation was a huge problem. Sims explained that Smith also saw this as a shield against Ottawa and Prime Minister Justin Trudeau’s continuous increase of the carbon tax, which is set to increase even more in a few weeks.
“None of that stuff has changed. In fact, it’s getting worse,” said Sims. “Politically, mathematically, we don’t get it. This doesn’t make any sense.”
For the first time in a year, Albertans are not paying the lowest fuel taxes in Canada. Manitobans, under NDP Premier Wab Kinew, are now paying less. This is largely in part to the Manitoba government removing their fuel tax the same day that Alberta reinstated it, saving motorists in Manitoba 14 cents per litre.
Manitoba said that it introduced the measure to help motorists with inflation.
Minister of Finance Nate Horner defended Alberta’s policy in a statement released on Tuesday.
“Alberta’s fuel tax is a predictable source of provincial revenue, helping to offset the volatility of other revenue sources. As a stable component of Alberta’s revenue mix, the fuel tax helps fund programs and services Albertans rely on while maintaining our significant tax advantage,” he wrote in the letter.
“Albertans will continue to save four cents per litre on gas and diesel in the first three months of 2024,” Horner explained. “After that, Albertans will save some or all of the provincial fuel tax when West Texas Intermediate crude prices average $80 per barrel or higher in each quarterly review period.”
Horner said that another update will be provided before the next quarter ends on March 31, 2024.
In Ontario, the provincial governments have decided to prolong the reduction in the gas tax until June, allowing motorists to keep benefiting from a nine cents per litre discount.
Meanwhile, in British Columbia and Saskatchewan, despite the opposition parties’ requests for a gas tax reduction, the respective provincial governments have opted not to implement such measures.