Tories increase tobacco, fuel taxes

The New Brunswick government is counting on hikes in gas, tobacco and liquor taxes to decrease its deficit, Finance Minister Blaine Higgs announced Tuesday.

The provincial government rolled out the series of tax hikes as a part of its fiscal austerity plan.

Finance Minister Blaine Higgs announced the bump during his budget speech Tuesday.

The Higgs budget will have an immediate impact on New Brunswick drivers when they fill up their tanks.

Tax on regular gas will jump from 10.7 cents per litre to 13.6 cents per litre. In addition, the tax on diesel fuel will move from 16.9 cents per litre to 19.2 cents per litre.

Higgs downplayed the hike on the various taxes during his budget speech.

"With this gasoline tax increase, New Brunswick will still have the lowest gasoline tax in Atlantic Canada, and the third lowest of all provinces," Higgs said in his speech.

For the first time since 2002, smokers will see so-called sin taxes go up.

Taxes on cigarettes will jump from 11.7 cents per cigarette to 17 cents, a $10.50 increase per carton. The tax on a carton of cigarettes will now go up to $34 from $23.50.

Taxes on fine cut tobacco and tobacco sticks will rise 62 per cent and 56 per cent respectively.

Higgs said increasing tobacco taxes was often suggested by citizens during his town-hall style pre-budget consultations with the public.

"New Brunswickers sent a clear message to the government that tobacco taxes should be increased to help discourage smoking and help pay for the additional costs smoking imposes on our heath care system," Higgs said.

Higgs also said the NB Liquor Corp. will make $10 million more in 2011-2012, but the finance minister did not say how that increase would happen.

The government estimates the gas and tobacco tax increases will generate an additional $63 million in revenue.