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Substantial Drop in Ontario Gas Prices Following Carbon Tax Scrapping
Gas prices in Ontario are experiencing a significant decline following the elimination of the federal consumer carbon tax. This change comes after Prime Minister Mark Carney officially signed an order to repeal the tax during his recent inauguration. Although the industrial carbon pricing structure remains intact, the consumer charge’s removal is expected to cause a notable reduction in fuel costs.
Analysts predict that gas prices could decrease by approximately 17 to 20 cents per litre across the province. Roger McKnight, the chief petroleum analyst at En-Pro International, indicated that diesel prices may see an even more considerable drop, potentially falling by around 21.4 cents per litre. Nevertheless, he cautioned that prices at the pump could still vary due to other influential factors, including the inclusion of the harmonized sales tax (HST) in fuel pricing.
Patrick De Haan, the head of petroleum analysis at GasBuddy.com, also supports this viewpoint. He noted that while the scrapping of the carbon tax serves as a significant driver for lowering prices, the overall cost of crude oil is on the rise. As a result, the ultimate decrease in fuel prices that consumers experience may settle closer to 15 cents per litre.
Current Fuel Pricing Landscape
As of 4 a.m. on Tuesday, the average gas price in Canada was reported at $1.51.3 per litre, according to data from the Canadian Automobile Association (CAA). In Ontario specifically, users on GasBuddy have reported prices ranging from $1.26.9 to $1.36.6 at various filling stations.
The consumer carbon price had been a significant policy under the previous government of Justin Trudeau. It aimed to reduce fossil fuel consumption by imposing financial penalties for carbon emissions. The policy faced increasing scrutiny over time, particularly as inflation affected consumers across Canada. While Ottawa tried to promote implementation of provincial carbon pricing, provinces like Ontario that opted out faced the federal rate instead.
The Canada Carbon Rebate program, which provided quarterly tax-free payments to eligible Canadians, was established to mitigate some of the financial burdens caused by rising fuel costs, with the government claiming that most Canadians received more in rebates than they paid in carbon taxes.
With Prime Minister Carney’s decision to eliminate the consumer carbon price, the rebate scheme will also conclude, with the last payment to Canadians scheduled for April. Presently, Quebec remains the only province in Canada to maintain its carbon pricing through a cap-and-trade system established in 2013.
Some provinces are gearing up for an increase in demand as seasonal shifts approach. Despite this potential surge, De Haan insists that it is unlikely to counteract the substantial savings forecasted for consumers at the pump, predicting “lower prices throughout the rest of the year.”
Source
globalnews.ca