Manitoba government points to low inflation rate after fuel-tax cut

WINNIPEG — Manitoba’s NDP government touted its recent fuel-tax cut as an inflation-buster Tuesday, while the Opposition Progressive Conservatives accused the government of letting costs rise elsewhere.

Premier Wab Kinew pointed to new figures from Statistics Canada, which showed Manitoba had the lowest inflation rate among the provinces in January — less than one per cent compared with the same month last year.

The province’s decision to temporarily suspend its 14-cent-per-litre fuel tax contributed to the low number, Statistics Canada said. While the cost of fuel had dropped in most jurisdictions, the drop in Manitoba was twice as sharp as second-place Saskatchewan.

Kinew, whose government has taken out billboards and other advertisements to promote the tax cut, called a news conference Tuesday to highlight the numbers.

“The fact that we have lower inflation and lower gas prices than anywhere else in Canada is good news,” Kinew said.

The tax cut was among the first measures the NDP enacted after winning the provincial election last Oct., as a way to help people with the rising cost of living. 

The fuel tax is to be suspended until at least June 30, with a possible six-month extension that will be decided in the spring.

The move has met with some criticism. 

Anti-poverty groups have said the tax cut benefits people who drive large vehicles and offers nothing to people who use other forms of transportation. Bus fares in Winnipeg went up by a dime the same day the provincial fuel tax cut started.

The Progressive Conservatives said Manitobans will be losing money on other items. They pointed to the NDP’s recent decision to lift a freeze on property tax increases by school divisions as an example.

“While distracting Manitobans with a small, temporary measure that will rise again in June, the NDP have allowed school taxes to go up, which will put more pressure on Manitoba families struggling to make ends meet,” Tory finance critic Obby Khan said in a written statement.

The tax cut also means the province, which has run deficits in every year but two since 2009, will forgo an estimated $163 million in tax revenue over six months.

The gas-tax cut is the subject of an online opinion poll that has been circulating this week. The poll, conducted by a private firm, asks respondents whether they have seen the government advertisements and to provide their opinions on the ads.

The government was not immediately able to say whether it had commissioned the poll or to provide the cost of its advertising campaign. 

Kinew said the ads are needed.

“I think when you are talking about the number 1 economic issue that Manitobans have been dealing with — high inflation — and you have a government tool that you can use to lower inflation, it’s good to let Manitobans know,” he said. 

This report by The Canadian Press was first published Feb. 20, 2024

Steve Lambert, The Canadian Press