Minimum wage going up, gas tax going down: N.L. announces new measures for cost-of-living relief

The Newfoundland and Labrador government is introducing a series of financial measures that it says will ease painat the gas pump and put money in the pockets of residents.

The province is introducing a temporary 50 per cent reduction on its gasoline and diesel tax, Finance Minister Siobhan Coady announced Thursday. The move will cut the provincial gas tax currently 14.5 cents per litre by seven cents per litre until the beginning of 2023. When HST is factored inthe price of gas and diesel will drop by 8.05 cents per litre.

The price of gasoline sits at around $2.22 per litre on the Avalon Peninsulabut is as high as $2.47 per litre in parts of Labrador, while diesel ranges from $2.25 in Newfoundland to near $3 per litre in Labrador.

The reduction won't take effect until it's passedin the House of Assembly. Premier Andrew Furey said it will be introduced in the legislature on Monday.

"I know these are stressful times for many of you and your families. We've been working tirelessly to find ways to add further assistance that are both within our means and are meaningful to you," he said Thursday.

Furey said cuttingthe gas taxwas previously impossible due to how the federal carbon tax's application in Newfoundland and Labrador was negotiated with the federal government.

The federalgovernment likely would have implemented a "backstop" if the province had changed the gas tax, Furey said earlier this month imposing furthercarbon taxeson goods that are currently tax-exempt.

Furey said Thursday that stance has changed inrecent conversations with Ottawa, adding it came up during a meeting with Prime Minister Justin Trudeau last week when Trudeauwas in Newfoundland for the royal visit.

"The federal government recognizes that cost of living is a significant issue facing all Canadians, and this is one measure that we're taking right now to help address that. And I'm confident, subsequent to those conversations, that the backstop will not be implemented," Furey said.

The province will also introduce a one-time home heating supplement for families heating their homes with furnace oil. Families with a net household income under $100,000 will receive a one-time payment of $500, while families with an income of between $100,000 and $150,000 will get a partial payment of between $200 and $500.

People will need to apply for the rebate, said Coady, andmore information will be available in the coming weeks.

Interim PC Leader David Brazil saidhis party had been calling for some of what was announced Thursday for months.

He said any moveto address the cost of living is a positive one but he wanted to seemore long-term solutions.

"Eight cents off is welcome, but if it goes up 10 cents tomorrow that's really not helping anybody in this province get further ahead," Brazil said.

Minimum wage rising to $15 by end of 2023

The province also announced it will raisethe minimum wage in increments to$15 per hour by 2023. The current minimum wage is $13.20 per hour.

Labour Minister Bernard Davis said the province will make three changes to minimum wage in the next 16 months: a50-cent increase on Oct. 1, an 80-cent increase on April 1, and the final 50-cent increase in October 2023.

The province will also implement a transitional support program for smaller employers as the minimum wage rises,providing50 cents an hour, per employee,for employers with 20 or fewer employees.

Davis said the recommendations on addressing the minimum wage came from a report from the province'sminimum wage review committee, which was established in January to address the minimum wage and its adjustment process.

The announcement has been years in the making for Mark Nichols andgroups like $15 and Fairness, who have pressed the government to make the minimum wage a livable wage.

And although Nichols says $15 isn't a livable wage estimated in a 2019 report to bearound $18.80 per hour it's a positive starting point.

"There's still work to be done to bridge the gap between this new minimum wage and a living wage, but it is certainly moving the needle in the right direction," said Nichols, who also servedas an employee representative on the minimum wage review committee.

Nichols says there is still more for the provincial government can do, including connecting the minimum wage adjustment process to the consumer price indexand examining the threshold for eligibility in government programs as the wage goes up.

"What we don't want to happen is increase minimum wage to a point where someone loses access to a program like say the prescription drug program and have to choose between work and the program."

Interim NDP Leader Jim Dinn called the increase to minimum wage significant but wondered if itwill be enough if inflation continues to raise the cost of goods.

"By the time we reach 15 an hour, you have to ask yourself the question, what's going to be the cost of living? Will that even be sufficient?" he said. "We still have a ways to go."

The provincial government says the measures announced Thursday will cost around $80 million, and is on top of $142 million in previous cost of living measures announced in the 2022 provincial budget.

Coady said the province should have the additional revenue to make the funding possible, thanks to the price of oil being higher than projected. She said the deficit is still anticipated to be $351 million.

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