The provincial government set a deadline for the 2023 budget and started the countdown on Monday with two cost-of-living announcements.
According to a press release, the provincial government will keep the seven cent cut in the gas tax – which was due to expire earlier this month – until March 31, 2024.
Speaking to reporters on Monday, Treasury Secretary Siobhan Coady said the year-long tax break will allow businesses and residents to plan.
“We wanted to make sure we gave them a big runway to make sure we took full advantage of that price drop,” she said.
The seven cent cut means residents of Newfoundland and Labrador pay the second-lowest gas tax in the country’s provinces, after Alberta, although overall gas prices remain higher than in other parts of the country.
The gas tax break extension is part of the 2023 budget, scheduled for March 23, and will cost the provincial government $63.4 million, according to the press release.
In addition to the $63.4 million it will spend on the gas tax break, Coady said the provincial government will miss $130 million from the carbon tax after the federal government introduced its own carbon tax in July .
The provincial government also announced it would expand a program offering rebates to homeowners switching from oil to electric heating.
According to a press release issued Monday morning, the provincial government is working with the federal government on a five-year program that will give approximately 10,000 homeowners rebates of at least $5,000 based on income level and heating system.
Tax break isn’t permanent: Furey
Speaking to reporters, Prime Minister Andrew Furey said the decision to extend the tax break by a full year signaled the province’s “much better” fiscal position.
“Given our financial position this year compared to previous years, this gives us some flexibility to offer this to families and businesses alike,” he said.
The provincial government posted an unexpected surplus last year, mainly due to high oil prices, higher-than-expected tax revenues and inflation.
However, Furey said his government will not make the tax break permanent.
“Whenever you look at instruments like taxes, they have to be people-responsive, they have to be treasury-responsive, and making them permanent would be a mistake in my opinion,” he said.
Furey and Coady declined to give further details on this year’s budget.
“You have to stay tuned,” Furey said.
PC, NDP leaders want more
The interim leaders of the Progressive Conservative and NDP parties both said they support the extended tax break but want the provincial government to do more to help with living expenses.
Asked whether the provincial government should prioritize a balanced budget, PC interim leader David Brazil said health care and the cost of living were his immediate concerns.
“If you don’t have … financially stable and healthy citizens, your productivity and your profitability will be minimal,” he said.
Brazil has criticized the new federal-provincial healthcare funding deal announced last month.
The new deal will include an immediate cash injection of $27 million to ease pressure on emergency rooms and pediatric care. Newfoundland and Labrador will receive about $210 million a year from a 5 percent increase in Canada’s health transfers over the next five years, and the province will get $749 million to spend on “shared priorities” with the federal government.
“I would have hoped they would have negotiated more from the federal government — we’ll see when they make their announcement,” Brazil said.
Furey said he wasn’t entirely happy with the new deal and would have liked to see more money flowing into the provinces; However, he instructed Health Secretary Tom Osborne to continue negotiations.
NDP interim leader Jim Dinn said he wanted the provincial government to remove HST from heating bills and link the cost of living to inflation.
“One-off taxes like the petrol tax – great for people who own a vehicle or two.
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