Gas tax break extended, oil rebate expanded as Liberals count down to 2023 budget
The provincial government has set a date for the 2023 budget, and began the countdown on Monday with two cost of living announcements.
According to a news release, the provincial government will retain the seven-cent cut to the gas tax — previously set to expire this month — until March 31, 2024.
While speaking with reporters on Monday, Finance Minister Siobhan Coady said the year-long tax break will allow businesses and residents to plan.
"We wanted to make sure that we gave them a big runway to make sure that we're fully taking advantage of this reduction in the price," she said.
The seven-cent cut means Newfoundland and Labrador residents pay the second lowest provincial gas tax in the country, after Alberta, although gas prices as a whole remain higher than in other parts of the country.
The extension of the gas tax reduction is part of the 2023 budget, set for March 23, and will cost the provincial government $63.4 million, according to the news release.
In addition to the $63.4 million it will spend on the gas tax break, Coady said the provincial government will miss out on $130 million from the carbon tax after the federal government implements its own carbon tax in July.
The provincial government also announced it will expand a program offering rebates to homeowners who switch from oil to electric heat.
According to a news release issued Monday morning, the provincial government is working with the federal government on a five-year program which will offer a minimum of $5,000 in rebates, based on income level and heating system, to approximately 10,000 homeowners.
Tax break isn't permanent: Furey
While speaking with reporters, Premier Andrew Furey said the decision to extend the tax break for a full year signals the province's "much better" financial position.
"Given our fiscal position this year compared to previous years, it allows us some flexibility to be able to offer this to families and businesses alike," he said.
The provincial government posted an unexpected surplus last year, largely due to the high price of oil, higher-than-expected tax revenue and inflation.
However, Furey said his government would not make the tax break permanent.
"Whenever you're looking at instruments like taxes they have to be responsive to the people, they have to be responsive to the treasury and to make it permanent, I think, would be a mistake," he said.
Furey and Coady would not give further details on this year's budget.
"You'll have to stay tuned," Furey said.
P.C., NDP leaders want more
The interim leaders of the Progressive Conservative and NDP parties both said they're in favour of the extended tax break, but want the provincial government to do more to help with the cost of living.
When asked if the provincial government should prioritize a balanced budget, P.C. interim leader David Brazil said health care and the cost of living are his immediate concerns.
"If you don't have … financially stable and healthy citizens, your productivity and your viability is gonna be minimal," he said.
Brazil criticized the new health care funding agreement between the federal and provincial governments announced last month.
The new deal will include an immediate $27-million cash injection to alleviate pressure on emergency rooms and pediatric care. Newfoundland and Labrador will also see about $210 million a year for the next five years from a five per cent hike to the Canada Health Transfer, and the province will get $749 million to spend on "shared priorities" with the federal government.
"I would have hoped that they would have negotiated more from the federal government — we'll see that when they do their announcement," Brazil said.
Furey has said he isn't fully satisfied with the new deal, and would have liked to see more money directed at the provinces; however, he directed Health Minister Tom Osborne to move ahead with negotiations.
NDP interim leader Jim Dinn said he wants the provincial government to remove HST from the cost of heat and tie cost of living measures to inflation.
"One-offs like the gas tax — great for people who own a vehicle or two. For those who are struggling still to put food on the table, to pay for increasing rents, it's not so much," he said.