Doug Ford extends gas tax cut in Ontario for another year


Premier Doug Ford is extending the 5.7 cents per liter gas tax cut for another year due to concerns about the rising cost of living.

The temporary measure – a Progressive Conservative campaign pledge ahead of the June 2 election that was due to expire at the end of next month – will now run until December 31, 2023, costing the Treasury $1.2 billion.

« People need a little help, » Ford told reporters Sunday at an Etobicoke Esso gas station.

“We know every dollar is worth it and this gas tax reduction is another way to save money for Ontario households,” he said.

The provincial tax would remain at nine cents per litre, down from the previous 14.7 cents before July 1.

Ford’s comments came on the eve of Finance Minister Peter Bethlenfalvy’s fall economic statement on Monday.

Despite rising government revenues thanks to inflation and post-pandemic growth, Bethlenfalvy signaled that a tightening of the belt is looming after nearly three years of record COVID-19 spending.

“We simply cannot ignore fiscal challenges and embark on a massive program of economic stimulus spending and growing deficits,” the treasurer said in a speech to the Canadian Club earlier this month.

“It will only make inflation worse at this critical time. After unprecedented spending in response to the pandemic, now is the time for governments to exercise restraint,” he said.

« More spending today will only make inflation more painful and lead to an economic slowdown. »

The speech came amid contract negotiations with education unions seeking healthy raises for workers after years of annual increases capped at 1%.

The Prime Minister has expressed hope that negotiations with the Canadian Union of Public Employees will see the 55,000 school support staff no longer go on strike as they did for two days earlier this month- this.

“We are at the table, the children are back in class, the parents can go to work. Those are the three things that matter,” Ford said.

Monday’s economic update comes less than three weeks after the province’s independent financial watchdog, the Financial Accountability Office (FAO), projected budget surpluses for this fiscal year and through 2027-28.

According to a 12-page report released Oct. 27, “a strong economy driving extraordinary revenue growth” secured Ontario a $2.1 billion budget surplus in the past fiscal year.

It will be the first budget in the dark since 2017, when Liberal Kathleen Wynne was premier and Charles Sousa treasurer.

« While revenue growth is expected to slow from its current pace, it will continue to outpace program spending increases…resulting in growing budget surpluses of ($100 million) in 2022-23 to $8.5 billion dollars in 2027-28, » the FAO report said.

“These surpluses represent a substantial improvement over the deficits projected in the 2022 Ontario Budget. Ontario’s economy expanded rapidly in 2021 and 2022 as the province recovered from the pandemic.

Despite this bullish projection, Bethlenfalvy – whose last budget in August showed a deficit of $13.5 billion before the surprise surplus of $2.1 billion the following month – warned that challenges loom.

Pointing to short-lived ex-Britain Prime Minister Liz Truss’ ill-fated plan to cut taxes while increasing spending earlier this fall, he said there were lessons to be learned.

« As we have seen recently in the UK, irresponsible fiscal policy is not an abstract risk – it hurts workers and families, » the Treasurer said.

“In our Fall Economic Statement, we will take a different, more prudent and fiscally responsible approach.

To that end, Bethlenfalvy is expected to target other new spending initiatives to help Ontarians cope with an inflation rate that was 6.9% in September.

“With persistent inflation and further economic turbulence on the horizon, it is essential that governments promote stability by remaining flexible, responsive and thinking long-term,” the minister said.

Interim NDP Leader Peter Tabuns implored the Conservatives to « make significant investments in public health care and public education in Ontario now, especially for the sake of our children. »

“Just look at what is happening in hospitals and schools across the province. More children need intensive care than there are pediatric intensive care beds. Teenagers may be sent to general hospitals instead of children’s hospitals which provide specialist pediatric care,” Tabuns said.

“Unless and until education workers get fair treatment, the help students receive from caring adults in the classroom is at risk,” he added.

« By investing in our valued public services — and the people we depend on to deliver them — we can give Ontarians the high-quality public health care and education they deserve. »

Rocco Rossi, president and CEO of the Ontario Chamber of Commerce, which has 60,000 members, said businesses are looking for “a clear and predictable path” from the Conservative government.

“We will look closely at measures that create the right environment to support long-term growth, productivity, resilience and competitiveness,” Rossi said.

« Economic growth in these uncertain times will require long-term planning by the government, with immediate actions to address urgent vulnerabilities in our health care system, housing affordability, impending energy shortages and talent shortages, » he said.

Rossi also implored Queen’s Park to work with Ottawa to « remove barriers to trade so we can create sustainable economic growth for years to come. »

Robert Benzie is the bureau chief at Star’s Queen’s Park and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie


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