Motorists should notice better pump prices soon after carbon tax ends May 30

Eliminating provincial carbon tax will save almost seven cents a litre

Drivers can expect to see prices at the pump fall soon after Alberta’s carbon tax disappears on May 30.

But motorists should enjoy the lower-cost ride while it lasts, because the federal government’s promised carbon tax will claw back most of the savings.

“You might get a reprieve for awhile, until Ottawa imposes its carbon tax,” said Dan McTeague, a senior analyst with GasBuddy, which tracks fuel prices.

“Any way you look at it, Albertans will win at least for the next couple of months, but it depends on when the federal government reimposes (a carbon tax).”

McTeague said Alberta’s carbon tax adds about seven cents a litre to the price of gasoline. The federal tax adds a little under five cents per litre, but that is scheduled to ramp up to almost eight cents per litre in April 2020.

In the meantime, the impact of a carbon tax-free Alberta will be felt almost right away.

“You may not actually see it showing up at the pumps for a couple of days until (service stations) chew through their inventory,” he said, adding most gas stations sell their inventory within three to five days.

“I would think definitely by the first week of June, everyone will be passing on the savings.”

Cynics, who fear gas stations will hold their prices steady and reap the benefits of a few extra cents of profit per litre, can look to Ontario’s example.

Last fall, when Premier Doug Ford ditched the provincial carbon tax — which added about 4.6 cents to the price of a litre of gasoline — prices noticeably dropped, said McTeague.

“I know it will happen (in Alberta),” he said. “It happened in my province last year.”

Ontario’s carbon tax-free status only lasted until April. That’s when the federal carbon tax kicked in, adding about 4.4 cents a litre to gas prices.

Alberta will face a federal carbon tax, too. Prime Minister Justin Trudeau said all provinces will pay, although he would not say in a stop in Edmonton last week if he would impose the tax as soon as Alberta’s version is dumped.

Getting rid of the carbon tax was perhaps United Conservative Party Leader Jason Kenney’s most popular election promise.

There was little love shown for the tax at the pumps in Gasoline Alley on Tuesday.

“You know what, I think it was just another tax to begin with,” said Bob Campbell, who is from Thunder Bay, Ont., but has spent 16 years working in Alberta’s petrochemicals industry.

He was skeptical of claims that the tax would help reduce the province’s carbon footprint.

“I think it was just an attempt at masking a tax to make it sound like something it was not,” said Campbell.

Samantha Masyk was glad to see the province is dumping the tax.

“Absolutely,” she said. “It was just something else for the government to make more money.”

She was not in favour of another tax, “because everything else in life is costing an arm and a leg.”

Another driver, who did not want to be named, said he was also opposed to the carbon tax. He questioned why Canadians were being asked to pay when major polluters, such as China, were not.



pcowley@reddeeradvocate.com

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