City of Ottawa expects to save $10 million on fuel, natural gas after federal carbon tax removed

Motorists fill up at an Ottawa gas station. (Tyler Fleming/CTV News Ottawa)

The elimination of the federal carbon tax could save the City of Ottawa millions of dollars on fuel and natural gas this year.

The Liberal government reduced the carbon price for consumers to zero as of April 1.

In response to an inquiry from Coun. Tim Tierney, staff say the 2025 City of Ottawa budget was based on a federal carbon tax rate of 21.4 cents per litre from January to April, and a rate of 25.4 cents per litre from April to December. Ottawa’s natural gas budget was based on a federal carbon tax of 15.25 cents per cubic metre from January to April, and a rate of 18.11 cents per cubic metre from April to December.

City Treasurer Cyril Rogers says the updated 2025 budget shows the city could save $10.5 million following the removal of the federal carbon tax. The savings include $7.2 million in savings on fuel for OC Transpo, $1.9 million in savings on natural gas for municipal facilities and $1.5 million in savings on fuel for municipal vehicles and buildings.

“It is important to note that the 2025 budget is based on pricing and volume consumption,” Rogers said. “The savings identified above assumes the 2025 budget volume consumption is the same and does not account for higher fuel and natural gas volume consumptions driven by the above normal and harsh winter season from January to April.”

A report on the “actual fuel savings realized” by the city will be presented to the finance and corporate services committee later this year.

Rogers adds any savings will be used to offset “other operating deficits” in 2025, including winter operations costs for public works “due to the harsh 2025 winter season.”

Ottawa motorists saw gas prices drop 20 cents a litre on April 1 as the federal government lifted the consumer carbon tax on fuel prices.