‘April Fools’ Day’: Fuel analyst questions impact of ending B.C. carbon tax

A motorist prepares to pump gas at a station in North Vancouver, B.C. Tuesday, May 10, 2011. (Jonathan Hayward / THE CANADIAN PRESS)

There is hope that British Columbians will get some relief at the gas pump when the province follows through on its promise to drop the consumer carbon tax on April 1.

The province is notifying fuel sellers and natural gas retailers about the move now, so they stop collecting the tax.

B.C. Premier David Eby said earlier this month that the province would kill the consumer tax after Prime Minister Mark Carney made the same announcement about the federal tax.

But there are some concerns about what things will look like on April 1.

Dan McTeague, president of Canadians for Affordable Energy, says the average price decrease at the pump for most of Canada will be about 19 cents a litre, however, that won’t last long.

“It is really a pause and anyone who has any expectation of these things lasting is going to be sadly disappointed,” he said.

“They will get a short-term break at the pumps… after the election and the new government is formed,” said McTeague.

“This drop in carbon taxes on April 1 is called April Fools’ Day, but I suspect this is going to lead to a lot of significant disappointment when Canadians find out in a month or two from now it’s going to be very costly.”

McTeague remains skeptical that consumers will save any money.

“Like it or not, business will pass that on or they won’t survive.”

Cut to climate action tax credit

Cutting the carbon tax also brings about the end of the climate action tax credit, which currently provides up to $1,008 a year to a family of four.

Alex Hemingway is an economist with B.C Policy Solutions. He calls the removal of the tax a “sad day.”

“Many families are being left worse off, they are going to have less cash in their pocket with the elimination of the rebate, offset in part by some lower prices at the pump.”

Anastasia French of Living Wage B.C. said the credit also supports individuals, while most other provincial programs are exclusively aimed at families.

“For single people without kids, that’s $500 a year, which is basically the equivalent to a grocery shop every couple of months.”

She adds with the U.S implementing tariffs on Canada, the rebate is needed now more than ever.

“We know that low-wage workers are probably going to be feeling the brunt of the impact of tariffs and we want to make sure the government has supports in place to support them,” she said.

“This was a very clear form of money they were getting versus the savings they may or may not be making at the pump if they do have vehicles.”

The government statement issued Tuesday says that while it understands getting rid of the tax requires change, it expects fuel sellers and natural gas retailers to make every effort to ensure that their customers are not charged the carbon tax as of April 1.

The tax has been in place since 2008 and getting rid of it leaves a $1.5-billion hole in the provincial budget.

When Energy Minister Adrian Dix was asked how that shortfall would be replaced, he said the finance minister would provide further details by Monday.

With files from The Canadian Press