Kinew coy about extending gas-tax holiday

Premier Wab Kinew wouldn’t say Tuesday whether his government will extend the gas-tax holiday beyond July 1 even though Manitoba has continued to post Canada’s lowest inflation rate since the levy was suspended.

“My commitment is to keep your life affordable,” Kinew told reporters Tuesday after Statistics Canada reported Manitoba’s inflation rate in February was 0.9 per cent.

Since Jan. 1, when the province lifted the 14-cent per litre gas tax, Manitoba’s rate of inflation has fallen to below one per cent and stayed there. In January it was 0.8 per cent and in December, it was 1.7 per cent.

Two years ago, Manitoba’s annual inflation rate was 7.8 per cent, higher than the Canadian average (6.8 per cent).

Kinew and some economists have credited the provincial gas tax holiday for Manitoba’s low rate of inflation.

On April 1, the price at the pump will spike as a result of an increase to the federal carbon tax: to 17 cents per litre of gasoline, 21 cents per litre of diesel and 15 cents per cubic metre of natural gas.

When asked if there is a plan to mitigate the impact on Manitobans — by extending the provincial gas tax holiday beyond July 1, for instance — the premier said his government is making a case for lifting the carbon tax “backstop” imposed by the federal government on provinces that didn’t come up with their own price on pollution.

“I think Manitoba has a really strong case that we don’t need the federal carbon backstop here,” Kinew said.

While he didn’t refer to a specific plan, he pointed to Manitoba’s investments in clean energy over the past 50 years and steps toward “a really credible path to net zero” that will be laid out in the April 2 budget.

“I think we get the carbon backstop removed by having a strong, constructive relationship with other levels of government,” said Kinew.

Under the former Progressive Conservative government, Manitoba failed to impose its own carbon tax plan that the federal government deemed sufficiently stringent.

Currently, opposition Tories have called out the NDP government for refusing to join seven premiers in opposing the federal carbon tax.

Kinew said the Tories, when in power, “wasted a ton of money doing a fool’s errand” fighting the federal carbon tax.

Meanwhile, a business leader and labour studies professor aren’t ready to declare victory over inflation just yet.

“I thinks it’s getting close,” said Manitoba Chambers of Commerce president and CEO Chuck Davidson. “It’s trending in the right direction,” he said about the rate.

“The key indicator is always going to come from the Bank of Canada,” Davidson said. Businesses are waiting for the central back to lower interest rates. “They send a strong signal that we’re heading in the right direction,” he said.

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Lower inflation is good news for Manitoba consumers, but hourly wage growth has been significantly lower over the last year in Manitoba compared to Canada as a whole, said assistant Prof. Jesse Hajer at the University of Manitoba.

Wages are only up 2.7 per cent, or 80 cents an hour, compared to five per cent or $1.66 per hour for the country as a whole, he said.

“The lower inflation in Manitoba has not been enough to make up for this gap, so workers are relatively worse off in Manitoba,” the prof said.

“We know economic growth is slowing, with per-person output continuing to fall in Canada. It is only one month of data, but average wages fell in Manitoba in February, while wages continued to increase in Canada — not a positive development.”

carol.sanders@freepress.mb.ca

Carol Sanders
Legislature reporter

After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.

   Read full biography