Gas prices tumble in Calgary as consumer carbon tax removed

The consumer carbon tax is gone for now and it means some instant savings at the pump, but some economists wonder if Canadians are really better off.

It was a welcome sight for many Calgary drivers Tuesday morning as gas prices as low as $1.27 per litre could be found at many stations, with some even lower.

The changes are due to the removal of the nearly 18-cent-per-litre federal consumer carbon tax, which kicked in at midnight.

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“Now we see a pause and a reduction, essentially, of that 17.6 cents a litre. So, it’s going to mean that Canadians, virtually coast-to-coast, are going to pay hundreds of dollars less per year on gasoline with those big savings,” said Patrick De Haan, the head of petroleum analysis at GasBuddy.com.

Monday saw gas prices in Calgary hovering around 158.9 cents per litre. Prices at some stations Tuesday were as low as 127.4 per litre and 139.4 per litre, while others sat around 141.9 per litre.

Prime Minister Mark Carney, who assumed office earlier this month, made the removal of the consumer carbon tax one of his first actions, just ahead of an election call.

“I’m not a career politician; I’m a pragmatist. So, when I see something that doesn’t make sense, something that doesn’t work, I change it,” Carney said Tuesday.

Pierre Poilievre, the leader of the Conservative Party, isn’t convinced that change will stick.

“We know that the Liberals have not gotten rid of the carbon tax. They’ve simply hid it from the gas pumps a few weeks before the election,” Poilievre said.

The federal Conservatives have been advocating for the elimination of the carbon levy for years, calling it a financial burden on Canadians.

The levy, initially set at $20 per ton in 2019, has been rising steadily each year. It was previously set at $80 per ton before its removal this week.

Prices at the gas pump were felt nearly immediately on Tuesday, but home heating costs are expected to come down eventually, too. The pause of the consumer carbon tax means a savings of about $4 per gigajoule on natural gas.

“You’re getting billed monthly on that stuff, so it’s going to take some time for it to show up on your bill,” said Chetan Dave, an economics professor at the University of Alberta.

“It might be pretty significant, actually, as far as the home heating bill is concerned.”

While the carbon tax may be gone from fuel prices, Canadians are still set to receive the final Canada carbon rebate.

Losing that carbon tax rebate cheque after this month will be a bigger hit to some Canadians than the savings from pausing the levy, Dave explained.

“The main difficulty with dropping it from consumers is going to be that, I think for most middle-class and lower-income Canadians, the loss of that rebate will be pretty heavy relative to the decrease in the price at the pump,” he said.

The last cheque will be issued on April 22 for those who have filed their 2024 tax returns before Wednesday.

For anyone filing after that date, the rebate will be sent once their returns have been assessed.