Gas tax: reduce the provincial tax instead, say federal MPs

The premier of Prince Edward Island wants Ottawa to reduce its carbon tax. The four federal deputies from the province instead propose to Dennis King to reduce his own gas tax.

If your concern is that gas prices are affordable, we respectfully believe you have the wrong tax.

This is what Liberal MPs wrote in a letter to the Prime Minister dated April 15 and recently posted on social media.

Last March, Dennis King sent a letter to Prime Minister Justin Trudeau asking him to suspend the increase in the carbon tax, which came into effect on April 1.

Many island residents face serious financial problemshe wrote in his letter. The rising cost of gasoline and diesel continually drives up the cost of goods, services and food for island residents.

Justin Trudeau responded in writing to provincial premiers who were calling for the increase to be suspended that his government was willing to work with them to establish their own carbon pricing plans, provided they meet or exceed national carbon targets. reduction of emissions.

Federal MPs believe the island can reduce its tax

In their letter, the island’s four federal Liberal MPs, Sean Casey, Lawrence MacAulay, Heath MacDonald and Robert J. Morrissey, target the provincial gas tax.

As you know, a provincial gas tax of 8.5 cents per liter is not refunded to Island residents. Is there a reason this tax hasn’t been suspendedwrite the deputies.

Malpeque MP Heath MacDonald notes other provinces have given residents a reprieve on provincial gas taxes.

Prince Edward Island could do the same. This is an adjustment that the province has the opportunity to reduce. If she wanted to, she could do ithe said.

Four different taxes apply to fuel prices in Prince Edward Island: the federal tax, a provincial tax, the carbon tax and the harmonized sales tax (HST). Revenues from the collection of the HST are shared between the federal and provincial governments.

The provincial tax is 8.5 cents per liter for gasoline and 14.2 cents for diesel. The province reduced this tax in 2019, when the carbon tax was implemented.

According to the federal Minister of Finance, the average island household will spend $628 in direct and indirect costs related to carbon pricing this year. At the same time, Ottawa predicts that the average household will receive $801 in reimbursement.

The four MPs said they had not received a response from the Prime Minister’s Office regarding their letter.

A spokesperson for the Prime Minister said the Prime Minister had nothing to add to the debate.

Lowering taxes is not the solution, says expert

Pierre-Olivier Pineau, professor at HEC in Montreal and holder of the Chair in Energy Sector Management, affirms that the provincial tax on gasoline plays a role a very important role for Prince Edward Island.

Abolishing taxes is rarely a good solution, it may be nice in the short term, but it is not a structural solution. So Prince Edward Island would have less funding to finance roads, finance different elements.

He even believes that this provincial tax should be increased to finance the road network which would otherwise be in deficit.

In Canada, we consume roughly 1000 liters of gasoline per person per year. Obviously, we have a certain sensitivity because we feel very dependent on the price.

He adds that the federal carbon tax does not represent the bulk of the increases in pump prices, quite the contrary. The increase is three cents per liter since April 1, he adds.

He argues that the carbon tax is an essential element in combating climate change, but also an indicator to consumers that it is time to change the sources of energy supply.

We need to stop looking at the price at the pump, we need to focus on lowering our individual energy bill.he says, giving the example of reducing our travel or using smaller or electric vehicles.

Based on a report by Kerry Campbell CBC and Julien Lecacheur of Radio-Canada