Who benefits from Manitoba’s ‘gas tax holiday,’ and for how long?

Small businesses and climate activists are looking at what the province’s newly introduced “gas tax holiday” bill could mean for Manitobans.

The bill was introduced Thursday by Finance Minister Adrien Sala, and offers to remove provincial tax from gasoline and diesel. That means 14 cents per litre will stay in the pockets of commuters, saving the average family with two cars about $250 over six months — that’s how long the tax break would last.

Though only offered for half a year, stakeholders are saying the impact would be beneficial — or detrimental.

What small businesses are saying

Brianna Solberg with the Canadian Federation of Independent Business (CFIB) said taking provincial tax off of fuel would be a lifesaver for small businesses.

“Our most recent survey data indicates that 63 per cent of business owners are saying fuel and energy costs are the most significant costs that their business is facing,” she said, adding that 80 per cent of the CFIB’s members started paying more for energy in the last year, even though they were using the same amount.

Mostly, Solberg said the cut won’t just help small businesses involved in deliveries and transportation, but because it would lower freight and shipping costs it would help everyone.

“I think cost relief in general at this is time is a really positive sign,” she said, particularly with the Canadian Emergency Business Account deadline approaching, by which businesses have to re-pay the federal government money they loaned to stay afloat during the pandemic.

If they don’t make the deadline, their debt will turn into a three-year loan with interest of five per cent yearly.

“I think if the bill is passed, this bill will come a long way to help businesses on the road to recovery,” she said.

Aaron Dolyniuk, executive director for the Manitoba Trucking Association, said the tax break wouldn’t help big trucking companies so much, because of a fuel surcharge.

“A surcharge typically ebbs and flows with the price of fuel so that trucking companies are not caught in the middle,” he said, preventing them from losing money to unexpected increases in fuel price. He said it also passes “the cost of fuel on to the consumer, or on to those purchasing the product (being transported) or service.”

So, even though bigger trucking companies wouldn’t feel the break so much, he affirmed consumers would.

Dolyniuk said the biggest that will be seen over six months, would be at the pump.

What climate activists are saying

On the flip side, Bethany Daman, communications manager for Manitoba’s Climate Action Team, says a short-term break in fuel tax now could break the bank down the road.

“Not ensuring affordability measures take into consideration emission reduction, means that our long-term costs — as a result of extreme weather events — are going to increase significantly,” she said.

Daman said unloading the financial pressures weighing Manitobans down is a great thing, but it’s intersectional.

“The affordability crisis, the health care crisis, the climate crisis are so linked,” she said, with lots of overlapping solutions. It will prove critical, though, to keep a long-term perspective and not get lost in the moment.

“It’s important to ensure that we’re not shortsighted in making those decisions and just really, really ensuring that all measures, all policies, budgets, legislations are considering climate.”

The primary concern, she said, are “extreme weather events,” that will come as a result of climate change caused largely by emissions.

“One thing that out team has really looked closely at is where emission in Manitoba are coming from, and the three key areas are food, transportation and shelter,” she said.

Of the two largest areas is transportation.

But no matter where the emissions come from, Daman said Manitoba is falling behind.

“We are one of the only two provinces in Canada whose emissions are still higher than where they were in 2005.” She said if Canada is going to uphold its commitment to the Paris Agreement which seeks to lower global emissions by 45 per cent for 2030, and get to net zero by 2050, “every six months counts.

“Within that time, we have to do absolutely everything we can to be able to support individuals in reducing their fossil fuel, rather than incentivizing it.”

She said one way to do this, is by bettering public transportation in cities and rural areas.