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Gas tax cut coming in N.L.'s budget

Finance Minister Cathy Bennett
Finance Minister Cathy Bennett

When Finance Minister Cathy Bennett rises to speak in the House of Assembly Thursday, she’ll deliver something unexpected in the provincial budget: a tax cut.

Multiple sources confirmed to The Telegram that the province will reduce the gas tax by a substantial amount.

In another pleasant surprise for those closely watching the budget, several senior government officials indicate that there will be no significant layoffs Thursday as part of the effort to get the deficit under control.

In fact, a lot of the gossip from inside Confederation Building is that the provincial budget might be almost downright boring.

Pretty much ever since the Liberal government took office at the end of 2015, both Premier Dwight Ball and Finance Minister Cathy Bennett have been telling the people how bad everything is.

The Liberals inherited a $2.2-billion deficit from the previous government, and if they hadn’t taken any steps to raise taxes or cut spending, the deficit was forecast to grow to a massive $2.7 billion.

Bennett raised taxes and fees across the board, and made some spending cuts, bringing the deficit down to $1.8 billion. Also in last year’s budget she laid down a series of deficit reduction targets which would ultimately see the province return to surplus by 2022.

To hit the government’s deficit reduction targets for the coming year, Bennett will have to get the deficit to $800 million or below.

And multiple sources indicate that the government will meet that target.

Both Ball and Bennett have said there will be no increases to taxes and fees, and Bennett reiterated that promise in the House of Assembly Wednesday afternoon.

Privately, many people within the Liberal government say that the 2016 budget was a mess, especially in the way it was communicated to the public. This year, there is a sense that they’ve learned some lessons and the rollout will be smoother.

The public message is expected to be all about balance and stability, and an assurance to the public that the Liberal medicine is slowly, steadily working.

Where the 2016 budget was deeply unpopular, provoking huge protests and a postering campaign calling for Ball’s resignation, Liberals now say that they believe that this year’s budget will arouse much less ire.

The gas tax was doubled in the 2016 budget, an increase of 16.5 cents, but right from the start it was billed as a “temporary” measure.

The government has previously suggested that at least part of the increased gas tax could be converted into a carbon tax to meet federal government requirements starting in 2018, but that’s not something that’s expected happen in the 2017 budget.

 

jmcleod@thetelegram.com

 

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