The provincial fuel tax in Manitoba will return in the new year, albeit down 1.5 cent per litre from its level prior to a one-year holiday throughout 2024.
What’s more commonly known as the provincial gas tax will return on Jan. 1 at a rate of 12.5 per cents a litre, Premier Wab Kinew said Monday morning in a statement.
The gas tax was 14 cents a litre prior to 2024, and Kinew promised in March he would “never let the gas tax get as high” as it was under the former PC government.
Greg Selinger’s NDP government raised the gas tax to 14 cents a litre in 2012. It remained at that level during the Brian Pallister and Heather Stefanson PC governments.
“Our government kept our word. We said we’d cut the gas tax and we did,” the premier said in a statement. “Now we’re going further by bringing in a permanent cut to the fuel tax to make it one of the lowest in Canada.”
The effective cut in the rate from 2023 to 2025 will be 10.7 per cent.
Kinew claimed in his statement the one-year gas tax holiday reduced inflation in Manitoba.
It also deprived the province of approximately $340 million in revenue, based on figures presented in the provincial budget.
Based on that figure — but not accounting for any growth in gross fuel sales — a 12.5 per cent gas tax would provide the province with an additional $304 million in revenue in 2025.
This might help the province reduce its deficit for the 2024-25 fiscal year, which ends on March 31. The 12.5 per cent gas tax will be applied during the final three months of that fiscal year.
Earlier in December, Manitoba Finance Minister Adrien Sala said the projected deficit for 2024-25 would be $1.309 billion, or $513 million more than he projected when he presented the budget for this fiscal year.