Gas tax break extended, oil rebate expanded as Liberals count down to 2023 budget

The provincial government has set a date for the 2023 budget, and began the countdown on Monday with two cost of living announcements.

According to a news release, the provincial government will retain the seven-cent cut to the gas tax — previously set to expire this month — until March 31, 2024.

While speaking with reporters on Monday, Finance Minister Siobhan Coady said the year-long tax break will allow businesses and residents to plan.

"We wanted to make sure that we gave them a big runway to make sure that we're fully taking advantage of this reduction in the price," she said.

The seven-cent cut means Newfoundland and Labrador residents pay the second lowest provincial gas tax in the country, after Alberta, although gas prices as a whole remain higher than in other parts of the country.

The extension of the gas tax reduction is part of the 2023 budget, set for March 23, and will cost the provincial government $63.4 million, according to the news release.

In addition to the $63.4 million it will spend on the gas tax break, Coady said the provincial government will miss out on $130 million from the carbon tax after the federal government implements its own carbon tax in July.

The provincial government also announced it will expand a program offering rebates to homeowners who switch from oil to electric heat. 

According to a news release issued Monday morning, the provincial government is working with the federal government on a five-year program which will offer a minimum of $5,000 in rebates, based on income level and heating system, to approximately 10,000 homeowners.

While speaking with reporters, Premier Andrew Furey said the decision to extend the tax break for a full year signals the province's "much better" financial position.

"Given our fiscal position this year compared to previous years, it allows us some flexibility to be able to offer this to families and businesses alike," he said.

The provincial government posted an unexpected surplus last year, largely due to the high price of oil, higher-than-expected tax revenue and inflation.

However, Furey said his government would not make the tax break permanent.

"Whenever you're looking at instruments like taxes they have to be responsive to the people, they have to be responsive to the treasury and to make it permanent, I think, would be a mistake," he said.