Newfoundland and Labrador cuts gas tax, promises $15 minimum wage by Oct. 1, 2023

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ST. JOHN'S, N.L. — The Newfoundland and Labrador government is temporarily cutting the provincial gas tax in half and promising a minimum wage of $15 an hour by October 2023.

Premier Andrew Furey told reporters the "temporary and targeted" measures are intended to help people cope with the rising cost of living, driven mainly by spiking global oil prices.

He says the cuts to the provincial tax on gas and diesel will save consumers about eight cents a litre at the pump.

Labour Minister Bernard Davis says a $15 minimum wage will be phased in, beginning with a 50-cent increase to $13.70 on Oct. 1, followed by successive hikes to $14.50 next April and finally to $15 on Oct. 1, 2023.

Newfoundland and Labrador's minimum wage is $13.20 an hour, which was the fourth-lowest in the country as of May 1, according to the Retail Council of Canada.

Six other provinces and territories, including Ontario and British Columbia, offer a minimum wage of at least $15 an hour.

Josh Smee, chief executive officer of non-profit Food First NL, said in an interview the move is a sign of "real progress."

"It's a small win, but it is a win," Smee said Thursday. "That's not to say it's enough … what $15 would have meant when people started asking for $15 is not what it means now, in terms of people's lives."

The province is also offering a one-time rebate of up to $500 to residents who heat their home with oil, as well as a 50-cent-an-hour subsidy for small employers to help them transition to the higher minimum wage.

Finance Minister Siobhan Coady told reporters the measures add up to about $80 million, which will be paid for by higher-than-expected revenues from the province's offshore oil sector.

"Right now, we're holding on our deficit position," Coady said, referring to the $351-million shortfall forecast in the provincial budget delivered April 7.

As in the rest of the country, gas prices in Newfoundland and Labrador have skyrocketed, with Thursday's prices ranging from $2.22 a litre in St. John's to nearly $2.50 in parts of Labrador. The bill to cut the gas tax will be introduced in the provincial legislature on Monday, Furey said.

This report by The Canadian Press was first published May 26, 2022.

The Canadian Press

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