P.E.I.'s 4 Liberal MPs to Premier Dennis King: Lower your own gas tax

P.E.I.'s four Liberal members of Parliament have made a counter-proposal to Premier Dennis King's request that Ottawa reduce its carbon tax: They've told the premier to lower his own gas tax.

"If your preoccupation is with affordability, then we respectfully suggest that you are targeting the wrong tax," the MPs wrote in a letter to the premier dated April 15, and recently shared on social media.

In March, King wrote to Prime Minister Justin Trudeau seeking a pause in the latest step-up of the carbon tax, which kicked in April 1.

"There are serious affordability challenges being faced by many Islanders," King said in the letter.

While noting that carbon tax rebate payments "help to offset" the impact of that tax to Islanders, the premier said "adding to the cost of gas and diesel continually drives up the costs to goods, services, and food for Islanders."

The four MPs and the premier agree on at least one thing: What the carbon tax costs Canadians is to some degree offset by the rebate payments they receive from Ottawa.

"There is, as you know, a provincial gas tax of 8.5 cents per liter [sic] that is not rebated to Islanders," the MPs wrote in their letter to King. "Is there a reason that this tax has not been paused?"

In an interview, Malpeque MP Heath MacDonald noted other provinces have given residents a reprieve on provincial gas taxes, and P.E.I. could do the same.

"Put your money where your mouth is," he said. "That's a switch that the province has the opportunity to reduce… if they wanted to do that, they could."

Four different taxes are applied to fuel prices in P.E.I.: the federal excise tax, a provincial tax, the carbon tax and the harmonized sales tax (HST). Revenue from the collection of the HST is split between the federal and provincial governments.

Prince Edward Island's provincial gas tax is 8.5 cents per litre on gasoline and 14.2 cents on diesel.

It used to be higher. The province lowered the tax to offset the increase in prices when the carbon tax was first implemented in 2019.

As of last year, when P.E.I. was administering its own carbon pricing program, the province was continuing to list the offset of gas taxes as one of the largest expenditures of carbon tax revenues.