As of April 1, the federal consumer carbon price in Canada comes to an end, and Canadians may see a noticeable change at the gas pump. Patrick De Haan, head of petroleum analysis at GasBuddy.com, shared with Global News that the cessation of the carbon tax could lead to a significant decrease in gas prices.
He predicted a reduction of 15 to 16 cents per litre on average, with diesel users potentially seeing savings of up to 20 cents per litre. This relief, according to De Haan, could be felt across the country within the next 48 hours, although some gas stations might take longer to implement the changes.
While this reduction is linked to the removal of the carbon tax, De Haan pointed out that fluctuations in the global oil market could affect the extent of the savings. For instance, a recent three percent increase in crude oil prices has slightly diminished the potential savings.
“Gas prices don’t just move for one lever at a time. There are many different levers that can drive prices up or down all at the same time,” De Haan explained. Still, the end of the carbon price should contribute to a noticeable decrease in the cost of fuel, with the average consumer potentially saving about $6 per week or $300 annually.
The federal carbon tax was introduced by former Prime Minister Justin Trudeau with the goal of incentivizing Canadians to reduce their fossil fuel consumption. While the initiative was aimed at reducing pollution, it faced significant opposition from various quarters, particularly from provincial governments. The industrial carbon price will remain in place, but the consumer fuel charge, alongside the Canada Carbon Rebate, which provided tax-free quarterly payments to eligible Canadians, will come to an end in April.
The rebate program aimed to mitigate the impact of rising fuel costs, with Ottawa claiming that around 80 percent of Canadians received more in rebates than they paid in carbon tax. However, with the rebate being discontinued, economist Moshe Lander noted that while gas prices may decrease, many households could still feel some financial pressure. “Even if we were to say the average family is losing out on $150 to $500, put that over 365 days and you’re talking about a couple of Timbits to a small cup of coffee at Tim Hortons,” he remarked.
Despite this, the drop in gas prices, coupled with the seasonal change in gasoline formulations as summer approaches, is expected to lead to lower prices for much of the year. De Haan suggested that the overall effect would be beneficial, with savings continuing year after year. “Under the old regime, the carbon tax would continue going up every April 1, so, in essence, it’s going to be significant savings,” he concluded.
