Manitoba schools Sask. in offering inflation relief

Two of Saskatchewan's next-door neighbours were crowing this week about how their policies had resulted in inflation rates well below the national average.

Here in Saskatchewan, the government issued a news release with Trade and Export Development Minister Jeremy Harrison bragging about the province's low inflation rate and linking it to the removal of the federal carbon tax from home heating.

Harrison had apparently employed economic math that perhaps only politicians can appreciate, connecting a good piece of fiscal news to a government policy. 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 Saskatchewan Party government's failure to take measures to provide greater inflationary relief.

Next door in Manitoba, the NDP government was also doing some boasting as the province with the lowest inflation rate for the first three months of the year. Manitoba stands out as the only province with an inflation rate below one per cent in each of those three months.

Manitoba Finance Minister Adrien Sala also issued a news release connecting the lowest inflation rate in Canada to his government's decision to suspend the provincial gas tax, which saves 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 Saskatchewan and Manitoba in January.

Jan. 1 marked the suspension of Manitoba's gas tax and also the date that Saskatchewan stopped collecting the federal carbon tax on natural gas and electric home heating.

One difference is that Manitoba is not breaking the law to provide relief from inflation, while Premier Scott Moe's government has essentially admitted that it is. Also, any relief from Saskatchewan's removal of the carbon tax could be countered by a federal decision to reduce the rebates.

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

But Alberta is experiencing tremendous population growth, well above that of its two Prairie cousins, so that can be a factor, too, helping to drive up prices.

And the Atlantic provinces are burdened with some of the highest inflation rates in Canada, with Nova Scotia and Newfoundland and Labrador above the national average.

Yet how can that be, given that these provinces, where home heating oil is used more widely than elsewhere in Canada, have been enjoying a break from the federal carbon tax since November?

Regardless of whether you believe the politicians' posturing, if you follow their logic, Saskatchewan would have benefited more from the suspension of its 15-cents-per-litre gas tax than its refusal to collect or remit the federal carbon tax. Saskatchewan's gas tax ranks among the highest in Canada.

But Moe's government has consistently rejected doing what other provinces have done to provide affordability relief, despite the urging of opposition parties, including the Saskatchewan United Party, which holds significant sway over the Saskatchewan Party.

Sure, suspending the gas tax might be more effective, but it lacks the drama of a showdown with the feds. In a provincial election year, that's considered more important.

Plus, expecting tax relief from this government seems unrealistic.

In the last budget prior to Moe's 2018 ascension to premier, Saskatchewan collected $6.8 billion in taxes, and that included a hike in the provincial sales tax to six per cent.

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

That works out to six per cent a year over seven years. Imagine if a city councillor came to your door asking for support after levying tax hikes of that magnitude. You'd turn the hose on that politician.

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