Finance Minister Mitch Murphy says the tax system isn't just a money grab, but should work to help the economy grow. The government is planning a "bold and innovative" overhaul of the taxation system, including holding hearings into how to use the tax system to help the environment.

There are no new general taxation measures, as the "tax burden on Islanders is pretty high right now," he said, adding they "should not have to shoulder the burden of inadequate funding from the federal government."

Murphy did announce the following measures, which he estimated in total would bring in $12 million annually:

• Gas tax will increase by three cents per litre by midnight.
• Cigarette tax to increase by $5 per carton.
• Capital tax on financial corporations raised to five per cent from three per cent.
• Provincial Sales Tax extended to cover green fees at P.E.I. golf courses.
• Exempt military and police personnel on high-risk international operations from paying income tax.
• Mirror new federal deduction for costs of disability supports.

Murphy vowed to help make P.E.I. a leader in environmental sustainability, offering a Provincial Sales Tax rebate of up to $3,000 for hybrid vehicles, and eliminating the PST on low-flush toilets.

"Taxation can also play a role to influence consumer decisions on sustainability," said Murphy, announcing the government will begin public hearings on ways to use the tax system to influence sustainability.