A lightbulb finally turned on in the House of Assembly. Lucky enough, it was in Newfoundland and Labrador Premier Andrew Furey’s office. Furey has discovered something that’s eluding politicians in Ottawa: a government can do something about soaring gas prices.
The Furey government is planning to leave an extra $275 in families’ wallets across the province by lowering the provincial gas excise tax.
Since then, Furey stepped up to the plate and implemented a gas tax cut of his own.
Much like the Ford government’s plan in Ontario, Furey’s gas tax cut temporarily reduces the province’s gas excise tax by seven cents per litre. The relief period will run from this month through until December of this year.
Seven cents may not sound like much as Newfoundlanders and Labradorians face annual inflation rates of over eight per cent, but over time the savings will add up.
With soaring prices at grocery stores and at the pumps, $275 worth of relief is a welcome sign for struggling taxpayers.
Furey’s move is also significant for another reason: he is the first Liberal premier to reduce gas taxes since Prime Minister Justin Trudeau introduced a nationwide carbon tax mandate. Clearly, governments across the political spectrum recognize that high gas prices are hurting families and relief is desperately needed.
Unfortunately, the federal government has yet to come to the same realization.
The tax cuts introduced by Furey, Kenney and Ford are in stark contrast to the policies of the Trudeau government. The federal government followed through on its plan to hike the carbon tax for a third time during the COVID-19 pandemic, with the federal carbon tax now hitting 11 cents per litre.
Now that Furey has implemented a gas tax cut without a federal tax hike in retaliation from the Trudeau government, Atlantic Canada’s other premiers should follow suit. Taxpayers are hurting from thirty-year high inflation levels and are in desperate need of relief.
That is especially the case for taxpayers in Nova Scotia and Prince Edward Island, where provincial governments still enforce a policy known as bracket creep. By failing to index income tax rates in line with inflation, the Nova Scotia and P.E.I. governments essentially increase the tax burden on taxpayers provincewide each and every year.
Looking ahead, the Furey government should plan to make this gas tax cut permanent. This year, it is estimated that food purchases alone will cost the average family $1,000 more than it did last year. With rampant inflation and soaring living costs, Newfoundlanders and Labradorians need relief lasting far beyond December.
Higher gas prices raise the cost of everything. It impacts essentials like groceries, which need to be transported from areas of production to neighbourhood grocery stores.
By reducing the gas tax, Furey is helping to alleviate soaring living costs faced by taxpayers. Taxpayers will continue to need that relief after the year’s end. Furey should be planning to extend the gas tax relief period well beyond December.
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