Manitoba schools Saskatchewan in inflation relief

Two of Saskatchewan’s neighbours were crowing last week about how their policies led to inflation rates well below the national average.

In a release, Saskatchewan Trade Minister Jeremy Harrison bragged about the province’s low inflation rate, linking it to removal of the federal carbon tax from home heating.

Saskatchewan’s seasonally adjusted inflation rate in March compared to the year before sat at 1.5 per cent, lower than the national rate of 2.9 per cent.

But Harrison inadvertently called attention to his Sask. Party government’s failure to provide greater inflationary relief.

Manitoba’s NDP government also was boasting about having the lowest provincial inflation rate — below one per cent — in each of the first three months of 2024.

Manitoba Finance Minister Adrien Sala also issued a release linking Canada’s lowest inflation rate to his government’s suspension of the provincial gas tax, saving Manitobans 14 cents a litre when they fill up.

So if you follow the line of reasoning of these two politicians, cutting taxes alone lowers inflation. That seems dubious, but the inflation rate indeed dropped in both provinces in January.

Jan. 1 marked the suspension of Manitoba’s gas tax and Saskatchewan stopping collection of the federal carbon tax on natural gas and electric home heating.

But Manitoba is not breaking the law to provide inflation relief. And any relief from Saskatchewan’s removing the carbon tax could be countered by a federal rebate cut.

Alberta suspended its 13-cents-a-litre gas tax for the first three months of this year, yet its March inflation was 3.5 per cent — second highest in Canada.

But Alberta is experiencing tremendous population growth, well above those of its two Prairie cousins, so that may be helping drive up prices.

Whether or not you believe the politicians’ posturing, by their logic, Saskatchewan would have benefited more from the suspending its 15-cents-a-litre gas tax — one of Canada’s highest — than refusing to collect or remit the federal carbon tax.

But Moe’s government has consistently rejected doing what other provinces have done, despite the urging of opposition parties.

Sure, suspending the gas tax might be more effective, but it lacks the drama of a showdown with Ottawa, deemed more important in a provincial election year.

Plus, expecting tax relief from this government seems unrealistic.

In the last budget before Moe became premier in 2018, Saskatchewan collected $6.8 billion in taxes, included a provincial sales tax hike to six per cent.

The projection in the latest budget is for $9.7 billion from taxation after several PST expansions — nearly $3 billion or a whopping 42.6 per cent increase.

That works out to six per cent a year over seven years.

Yet this tax-hiking provincial government fancies itself an inflationary hero.