WINNIPEG — The Manitoba government is ending its yearlong fuel tax holiday but bringing back the levy at a lower rate.

The government temporarily suspended the 14-cents-a-litre fuel tax at the beginning of 2024 as a way to help people deal with the rising cost of living.

The province has announced the tax will be back in place on New Year’s Day at a rate of 12.5 cents per litre.

The tax holiday caused Manitoba’s inflation rate to be among the lowest in the country, but it was criticized by some as favouring people who drive large, expensive vehicles.

Premier Wab Kinew says the cost of living has hurt everyone and even people who earn six-figure incomes need relief.

Kinew had said the lower fuel tax would cut grocery prices, but Statistics Canada says Manitoba saw the steepest inflation on food last month compared to a year earlier.

This report by The Canadian Press was first published Dec. 23, 2024.

Steve Lambert, The Canadian Press