Canadians in some provinces and territories will soon be paying a bit more at the gas station as the federal carbon price increases starting Saturday.
The fuel fee will increase 30 percent from $50 per ton of emissions to $65 on April 1. This means an increase of about three cents per liter for gas, bringing the total to 14 cents per liter.
The proposed increase applies in Ontario, Manitoba, Saskatchewan, Alberta, Yukon and Nunavut.
Meanwhile, the carbon price jump comes into effect on July 1 in Newfoundland and Labrador, Nova Scotia and Prince Edward Island.
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Canada started pricing carbon pollution in 2019.
The move is part of Ottawa’s commitment to tackling climate change with a goal of achieving net-zero carbon emissions by 2050.
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While Canadians will see increases at the pumps, the rise in carbon prices is not expected to have a major impact on their gas bills, said Hadrian Mertins-Kirkwood, a senior researcher at the Canadian Center for Policy Alternatives.
“It’s an incremental increase, but it’s not really going to be a huge year-over-year change that people are going to notice,” he told Global News.
For individuals, that could mean a jump of $1 per tank, depending on how big the vehicle is, Mertins-Kirkwood estimated. It’s also “not a big expense” for companies, he said.
Mertins-Kirkwood said things like oil market volatility and gas taxes have a much bigger impact on energy costs.
“These fluctuations are much larger than the carbon price.”
The carbon price hike comes amid temporary relief for Canadians with lower gas prices reported in February after record-high costs last year. Gas prices in Canada topped $2 a liter for the first time last year.
On a monthly basis, Canadian drivers paid one percent less for gasoline in February, according to Statistics Canada in its latest report, released March 21. Overall, gasoline prices fell 4.7 percent in February — the first annual decline since January 2021, StatCan reported.
The agency said the year-on-year decline was partly due to the significant price increase seen in February 2022 amid the Russian invasion of Ukraine.
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The Canadian national average for gas prices was 150.8 cents a liter as of Friday morning, according to GasBuddy. The CAA estimate for Friday was 149 cents a liter.
In addition to raising gas prices, the carbon tax could see its way into Canada’s wallet in other ways.
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For example, jet fuel across the four provinces is also up about 3.5 cents a liter for a total of nearly 16 cents a liter, which could potentially mean higher airfares across the board.
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However, tariffs for aviation fuel and aviation fuel will remain unchanged in the territories due to the “high dependence” on air transport, according to the federal government.
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Light heating oil, used in household appliances, rises to 17 cents a liter – up almost four cents.
Carbon pricing may also have an impact on food prices, experts on other groceries and shipping goods say, as Canada’s truck-based transport industry will spend more money to fill the tank.
“It’s possible that it could have an impact on things like shipping, but it’s a relatively small impact,” Mertins-Kirkwood said.
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Ottawa has claimed that eight out of ten Canadian families get back more money than they pay under the Federal Carbon Pricing Plan as a result of the Climate Action Incentive.
Canadians can claim CAI payments by filing annual federal taxes.
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Mertins-Kirkwood said most households, excluding those earning high incomes, are “better off” from carbon pricing because of the government rebate, which returns revenue to families and increases with increases.
But the Parliamentary Budget Officer (PBO), an independent watchdog, said in a report last year that a majority of Canadian households will see a “net loss” from federal carbon pricing over the long term through 2030-31.
The PBO said Albertans in the highest-income quintile would pay the largest net cost from the carbon tax, while Saskatchewan’s lowest-income households would see the largest net benefit from the rebate.
– With files from Craig Lord of Global News
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