[DIV id=headline] [H2]Get used to higher gas prices, PM says[/H2]
[DIV id=author] [P class=byline]STEVEN CHASE AND GLORIA GALLOWAY
[DIV id=article style="FONT-SIZE: 100%"][!-- Summary --] [!-- dateline --]OTTAWA, WINNIPEG[!-- /dateline --] -- Prime Minister Stephen Harper quashed speculation that his spring budget might offer consumers targeted tax relief from soaring fuel prices, saying only that motorists would get a break on gas costs when the Conservatives trim the GST.
[!-- /Summary --] He also warned that Canadians are going to have to learn to live with sticker shock at the gas pump.
"I think that the truth of the matter is that higher gas prices -- that's going to be something that we're going to have to get used to," Mr. Harper told reporters in Winnipeg.
He was prompted to comment after Foreign Affairs Minister Peter MacKay left the impression earlier yesterday that the Conservative government might be considering additional tax relief aimed at soaring fuel prices.
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"There's very little that the federal government can do outside of the issue of taxation on gasoline and home-heating oil," Mr. MacKay told reporters in Halifax.
"There [are] discussions about that right now. We have a budget coming and we're getting all kinds of submissions . . . on what to cut and what not to cut," Mr. MacKay said. "So these are areas that we're examining."
Mr. MacKay also discussed a May, 2004, Tory pledge to remove the GST on the portion of gas prices above 85 cents a litre, adding he believed it would be a topic of discussion when cabinet ministers gather next week.
"I know that was raised with [Mr. Harper] as recently as [Tuesday] in his travels in British Columbia and I haven't had an opportunity to discuss it directly with him or with Jim Flaherty, but we'll be back at the cabinet table next week and I expect fully that this will come up."
Finance Minister Flaherty's office declined comment on Mr. MacKay's remarks.
At a Winnipeg press conference, Mr. Harper said the Tory plan to lower the goods and services tax to 6 per cent from 7 per cent would help motorists, but he shied away from measures promised while in opposition, saying the GST rate reduction would be more beneficial.
"The commitment we made in the [recent] election campaign was to cut the GST, which would reduce prices on all consumer products and reduce the federal government's revenue from rising gasoline prices," the Prime Minister said. He said lowering the GST rate would reduce Ottawa's take more than axing the GST charged on excise tax.
In May of 2004, as Official Opposition leader, Mr. Harper vowed that a Conservative government would eliminate the GST on any portion of gas prices above 85 cents per litre. He said the Tories would also get rid of so-called tax on tax where the GST is charged on top of federal excise taxes.
"We are only depriving Ottawa of a massive windfall it wasn't counting on and it doesn't need," Mr. Harper said then.
When reporters pressed the Prime Minister yesterday about his previous call to reduce the GST on gas, he said: "As you recall, that was two elections ago."
The rising price of gasoline is a situation that the federal government will watch closely, Mr. Harper said. But it may be something that Ottawa can do little about, he said.
"Worldwide, long run, the demand for energy products is outstripping the supply and I think we're going to see sustained upward pressure on prices for some time to come. This is something that we're all going to have to adapt to. And it's one of the reasons why, when we deal with climate change and other issues, we're going to want to encourage the development of alternative energy sources."
It is not the first time that Mr. Harper and his Foreign Affairs Minister -- who was his co-architect in the creation of the Conservative Party -- have given mixed messages.
During the recent election campaign, Mr. MacKay offered a very different notion of the job description for the party's proposed federal prosecutor than the one outlined by Mr. Harper.
And in March, Mr. MacKay was forced to retreat from comments that some aid to the new Hamas government in Palestine would continue, clarifying later that the matter was under review.
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