Manitoba gas tax hike to fix flood damage

Manitobans will pay more to register vehicles and an extra 2.5 cents per litre for gas, in order to pay for infrastructure that was damaged in last year'srecord floods, the province says.

"It has cost nearly a billion dollars to fight the flood," Finance Minister Stan Struthers said of theflooding that spread across much of southern Manitoba in the spring of 2011.

The government estimated the floods cost in excess of $900 million in mitigation and reparation efforts.

"Last year's record-breaking flood washed away homes and businesses, affecting thousands of Manitoba families," said Struthers, noting that 80 bridges across the province were damaged.

"Parks, roads and bridges were not spared, and rebuilding will take time," he added.

So on May 1, the government will hike the gasoline tax from 11.5 cents per litre of fuel to 14 cents per litre and the motive fuel tax for marked fuel by the same amount.

The province will also raise the price of registering a vehicle by $35, from $119 to $154.

Proceeds from the gas tax increase alone is expected to raise $49 million a year. The vehicle registration hike will raise another $17 million.

"[The] 2.5-cent increase to the gasoline tax will support the extensive rebuilding needed after the flood, ensure stale, ongoing funding for public infrastructure and provide funding for projects in the future," Struthers said.

But raising taxes won't encourage economic growth, argues Brian Pallister, a candidate for the Progressive Conservative Party's leadership.

"Anyone who needs to license a car or drive a little bit is going to be a net loser after today," Pallister said.

"That's seniors, that's working people, that's working families, so the question of how we grow the economy in face of these kinds of new burdens on Manitobans remains to be answered."