Cost of a fill-up gets fingers pointing in N.B. Legislature

·4 min read
The rising cost of gasoline dominated debate in the New Brunswick legislature on Thursday. (Kirk Fraser/CBC - image credit)
The rising cost of gasoline dominated debate in the New Brunswick legislature on Thursday. (Kirk Fraser/CBC - image credit)

With gas prices hitting record highs in New Brunswick, the cost of filling up dominated the New Brunswick Legislature on Thursday, with some partisan finger-pointing and riffing on carbon taxes thrown in for good measure.

The Opposition Liberals seized on musings by Premier Blaine Higgs that he could give hard-hit consumers a gas-tax rebate, but only later this year if revenues allow it.

"He's dragging his feet or just suggesting an idea to get a headline," Liberal Leader Roger Melanson said.

In question period, Justice Minister Ted Flemming blamed Melanson's federal Liberal allies and their climate change policies for the price of gas.

Ed Hunter/CBC
Ed Hunter/CBC

"When you restrict the supply of something, the price goes up," Fleming said.

"The federal government in its policy has restricted the exploration, transportation, and distribution of oil and gas products, and by so doing, the price has gone up. … It's Economics 101.

"It is lunacy, it is harming New Brunswick, it is harming the people. Phone your buddy Trudeau and tell him to fix it."

Ottawa has put carbon pricing and new environmental assessment rules in place, but also recently approved an offshore oil project in Newfoundland and Labrador, a decision Higgs applauded this week.

But that was a rare cross-partisan moment.

Higgs's Progressive Conservative government and the Liberal opposition have been trading accusations since gas prices began soaring following the start of the war in Ukraine in late February.

The regulated price for a litre of regular unleaded gasoline, which hit $2.02 on Thursday, was already rising before the war began.

The Energy and Utility Board's last pre-invasion maximum price was $1.58.9 on Feb. 24. A year ago this week, it was $1.34.

The latest price hike this week, cracking the two-dollar threshold, means the province is now collecting 5.9 cents more per litre of gasoline in HST than it did at this time last year.

Higgs has called on Ottawa to give provinces a break from having to collect the 11-cent-per-litre carbon tax under the national climate change action plan.

The federal government refused, prompting the provincial Liberals to demand Higgs slash the provincial gas tax instead.

Higgs has rejected that, saying giving up the gas tax revenue would endanger the new spending he put in this year's budget and its narrow $35 million surplus.

Ed Hunter/CBC
Ed Hunter/CBC

On Wednesday, Higgs suggested that if the harmonized sales tax charged on gas sales leads to an unexpected revenue windfall, he'll look at rebating some of it to New Brunswickers who need it most.

But he said it's too soon to make a decision because higher prices could lead to people cutting back on buying gas, which might offset any revenue gains.

"If we could say the volumes were the same, we aren't seeing any difference, yes, we could calculate it very precisely. But that's the part we don't know," Higgs told reporters.

"I don't want to do something that's going to impact the programs we've put in place and need to fund."

He also said the province and some of its Crown corporations, including NB Power, will see higher costs themselves that will also affect the budget's bottom line.

The HST is collected by the federal government, which turns over the provincial share to the provinces.

That usually happens in the third quarter of the fiscal year, which is why Higgs says it's too soon to be sure whether the government can afford to rebate some gas-tax revenue.

CBC News
CBC News

But Melanson, a former Liberal finance minister, said Higgs would have gas sale trends from the end of the last fiscal year, and early data from April, the first month of the new fiscal year.

"He would have by now the volume of fuel consumed and purchased, and the revenues it generated the first month. He would have that," Melanson said.

"And he could make a decision now. I'm worried he doesn't want to do this rebate."

Melanson said while he called for a gas tax cut, a rebate would be better than nothing.

"I'm at a point right now where any action will be good to give some relief to New Brunswickers. If a rebate is easily done, I'm okay with it."

Premier argues for carbon tax pause

The federal carbon price is designed to dampen demand for fossil fuel products so that consumers will burn less of them.

But Higgs has argued that the soaring prices due to the war in Ukraine and other global factors will have the same effect, making it possible for Ottawa to pause the carbon tax.

The premier said he accepts the need for policies such as carbon pricing to fight climate change but claims the federal government has moved too fast, squeezing Canada's ability to supply oil and gas to world markets looking for alternatives to Russia.

"The federal programs are designed to raise prices to put fossil fuels out of business. And we're not denying or challenging the climate change initiative and how we need to ultimately get there. We're challenging the timeframe and the ability to do so."

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