An increase in Canada’s carbon pricing plan will make filling up your gas tank more expensive on Friday morning.
Starting April 1, the carbon tax will tack an extra 2.2 cents onto the cost of a liter of gas. With that change, the carbon tax will account for 11 cents of the litre.
Rebates meant to offset the hit from the carbon tax are scheduled to be mailed or delivered by direct deposit in July.
The federal government has refused to give in to pleas from provincial governments and the energy sector to postpone the planned increases.
“I think you’re going to put more pressure on the consumer and consumers are already struggling with inflation,” says Gurpreet Lail, president of the Petroleum Service Association of Canada.
Toronto food delivery driver Michael Chung told CTV News Toronto he’s been refueling $25 at at a time because it’s all he can afford.
“The cost of the gas is too expensive so I can’t do much deliveries and it’s affecting my wages,” Chung said.
Jody Grewal, assistant professor with the Rotman School of Management, said they would have liked for the federal government to delay the tax bump, but acknowledges they have a balancing act to do.
“We have to evaluate what’s happening. Climate change doesn’t take a break just because we are in this period of economic upheaval,” Grewal said.
Speaking on CTV’s Power Play on Tuesday, Environment Minister Steven Guilbeault defended sticking to the timeline.
“95 per cent of the increased cost at the pump has to do with the cost of crude oil going up substantially because of the war in Ukraine and provincial taxes,” Guilbeault said.
Alberta is pausing the collection of a 13 per cent gas tax to give drivers a break. The Ontario government has said it won’t cut gas taxes unless the federal government makes a similar move.
The gas tax will rise again by about 3.2 cents a liter in April 2023.
Dan McTeague, President of Canadians for Affordable Energy says the clean fuel standard coming in December 2023 will also add about four cents to the cost of a liter.
“Put in perspective, diesel and gasoline are going to see carbon tax increases in the order of at least 45 cents a liter between now and 2030, perhaps even earlier,” McTeague said.