Gas price gap between Quebec and the rest of Canada is widening after carbon tax cut

After the federal consumer carbon tax was cut in March, gas prices have dropped everywhere in Canada, except in Quebec.

Since Mark Carney’s Liberal government cut the consumer carbon tax, prices at the pump dropped everywhere in Canada.

...except Quebec, where it has gone up.

The Montreal Economic Institute (MEI) think tank hopes the province will find ways to reduce gas prices for drivers by tapping the sustainable development Green Fund surplus.

The national average price on Thursday was 132.5/L. In Quebec, it was 148.2/L.

An MEI study suggests using the $1.8 billion Green Fund 2.0 surplus to reduce the gas tax, which is currently 19.2 cents per litre.

For comparison, Ontario’s fuel tax is nine cents a litre.

MEI study author Gabriel Giguère points out that when the carbon tax was scrapped in March, it further widened the gap between Quebec’s price at the pump and other provinces.

“We have a huge gap between what we pay as a Quebecer and what the rest of Canada is paying,” he said. “We are currently in Greater Montreal at 18 cents more than the average Canadian is paying, and so, in that sense, we really need to lower that price to make sure that the affordability crisis, in a sense, is not affecting us as much as it is right now.”

Every major city in Canada saw its fuel price drop by at least 10 cents per litre, except the ones in Quebec.

Giguère estimates that it costs the average Montreal-area resident an extra $260 per year for fuel.

SOURCE: Statistics Canada

Affordable Energy president Dan McTeague explained that Quebec’s cap-and-trade system, which allowed the province to avoid the federal carbon tax, adds around 12 cents a litre on fuel.

The surplus generated from that fund (around $1.8 billion) is what the MEI and McTeague feel should be used to lessen the price burden at the pump.

“So anywhere you go, all around you is a sea of much cheaper prices that makes their economies much more competitive, and consumers a little bit better off than certainly here in Quebec, and so there has to be some kind of a give,” said McTeague.

McTeague said that internal combustion engines are not going away and that they continue to be more efficient and clean.

“Electric vehicles need hydrocarbons to be processed, realized and to be made, whether it’s graphite, whether it’s plastics, polymers, resins, tires, they’re all made with oil,” he said. “So let’s not be Pollyannaish about this and suggest we have something that’s much better than the others in terms of internal combustion engines.”

Giguère adds that everyone in the country is paying less, and that Quebec’s new Bill 7, meant to make the province more efficient, should be used to help consumers.

“It’s something to have the possibility now that the government needs to do it,” he said.

“We have to be pragmatic about this,” said McTeague. “We all want a cleaner environment. We all want to do best by the environment, but we can’t do it by bludgeoning consumers and harming the economic interests of the province, and as compared to what other regions are doing.”