Alberta will stop collecting a 13-cents-per-litre provincial gasoline tax on April 1 if world oil prices stay high. (File photo from The Canadian Press)

Alberta will stop collecting a 13-cents-per-litre provincial gasoline tax on April 1 if world oil prices stay high. (File photo from The Canadian Press)

Alberta plans to pause gasoline tax saving motorists 13 cents per litre

Gasoline tax pause kicks in when oil prices above $90 a barrel

Albertans could see gas prices slashed by 13 cents per litre soon if world oil prices stay high.

Premier Jason Kenney said on Monday if the price of the benchmark West Texas Intermediate stays above $90 US a barrel the province will stop collecting its 13-cents-per-litre gas tax. If oil drops below $80 US a barrel, the tax will be applied again.

“This massive tax relief is a response to skyrocketing costs at the pump and is going to provide Albertans with the relief that they need when the cost of everything is going up,” said Kenney in a news conference.

The premier said the oil used in gasoline sold now was likely purchased weeks ago when prices were lower, meaning more price hikes are inevitable.

“We know there will be much higher prices so relief is urgently needed right now.”

Adam Johnston commutes from Innisfail to Red Deer daily and likes the idea of a 13 cent-per-litre break.

“Anything cheaper would be nice, especially with the premium gas,” said Johnston, who was paying 174.9 for premium on Monday.

“It will definitely make a difference.”

Regular gas remained at a record high of 154.9 on average in Red Deer on Monday. The highest average last year was 137.9. The lowest recorded average was 63.9 in February 2016.

Gas prices surge higher

Kenney said the gas tax cut, which would kick in on April 1, is tied to high oil prices and will not affect the province’s anticipated budget surplus, which is based on $70 per barrel.

“This is a fiscally responsible measure that will only provide this relief if in fact, the province is generating significantly additional revenues.”

The province will watch gasoline retailers closely to ensure that savings are passed on to drivers although the government has no power to force companies to cut prices.

The program will be reviewed every three months and will be in place for at least a year.

As well, $50 in electricity rebates will be added to January, February and March bills. More than one million homes, farms and businesses will see rebates applied directly to their energy bills.

The gas price relief will save Albertans $1.3 billion over a year and $300 million in electricity costs.

Gas prices hit record in Red Deer

The electricity rebate will combine with a natural gas rebate announced as part of the 2022 budget and which would kick in next winter if prices stay high.

Kenney said the gasoline price relief will be offset partly by an increase on April 1 in the federal carbon tax from just under nine cents per litre to just over 11 cents per litre.

He strongly criticized the federal government and provincial NDP for its carbon tax policies, which are hitting Albertans at exactly the wrong time.

“I really don’t understand how (Prime Minister) Justin Trudeau and (NDP leader) Rachel Notley can think this is the right time to add even more costs to day-t0-day living with their punishing carbon tax,” said Kenney.

Red Deer and District Chamber of Commerce supports the government’s move.

“The unprecedented times of high inflation and energy costs are a drag on the economic growth of our region at a time of recovery from the impacts of COVID 19 and other world events,” said chamber CEO Scott Robinson.

“We support prudent programs and mechanisms by government that are drawn from surpluses being realized due to the increase price for oil and gas products to lessen the cost impact on businesses and consumers in these unprecedented times.”

The Canadian Taxpayers Federation applauded the decision to pause the provincial fuel tax.

“The Kenney government has stepped up to the plate to help taxpayers who are struggling with record gas prices,” said Alberta director Kevin Lacey. “Eliminating the provincial gas tax is a great way to give taxpayers a break.”

Gasoline prices include 10 cents a litre in federal gas tax, 13 cent provincial gas tax, five per cent GST and 8.8 cent carbon tax. At today’s prices, taxes make up approximately 41 cents of the pump price or about 25 per cent.

“Premier Jason Kenney has made the first move and now the ball is in the Prime Minister Justin Trudeau’s to court to do the right thing and cut the carbon tax to protect taxpayers,” said Lacey.

The gas tax cut would save a family nearly $10 on a fill for a minivan with a 76-litre (20 U.S. gallons) tank.

NDP energy critic Kathleen Ganley said the government is not doing enough.

“Albertans are struggling right now. The cost of everything is going up, and many of these rising costs are a direct result of UCP policy. The UCP’s latest plan falls well short of what’s needed and Albertans will continue to struggle with basic costs,” she said.

A recent NDP emergency motion calling for the immediate suspension of the provincial gasoline tax, as well as electricity rebates or a rate cap of $6.50 per kilowatt hour was defeated by the government.

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