Liberals’ new fuel tax already spiking prices at the pump
Liberals’ new fuel tax already spiking prices at the pump

The Trudeau government’s clean fuel regulation has spiked gas pump prices just a week into its implementation.

In Prince Edward Island, the Federal Fuel Charge—introduced by the Department of Environment and Climate Change Canada—is responsible for fuel prices increasing by five cents per litre (cpl) as of July 7, the Island Regulatory and Appeals Commission (IRAC) said.

Furnace oil and diesel also increased by five and a half cents and five cents, respectively.

The clean fuel charge, which the government claims will cut carbon emissions from gas and diesel by 2030, took effect July 1.

CTV reported that fuel costs will increase by 15 (cpl) in the Prairies to as much as 24.45 (cpl) in New Brunswick.

Other regulations, which differ by the province, are already in place, but altogether the carbon and clean fuel regulations could increase the cpl by 45.15 to 56.2.

The program has garnered support from industry associations.

“The policy has a pretty soft start because what it’s requiring is to some extent even less than what is actually being required of other pre-existing policies,” Michael Wolinetz, a partner at Navius Research—a Vancouver-based energy and environment consulting firm—told the CBC.

“We’re not expecting the policy to have any real bite until 2025,” Wolinetz added.

However, joining resistance from Saskatchewan and Atlantic Canada, Alberta’s government isn’t as agreeable.

Premier Danielle Smith has pushed back, citing potential harm to the province’s oil and gas sector, which has come back to life in the last couple of years following its crash nine years ago.

Following a recent address to the Calgary Chamber of Commerce, Smith—citing Alberta’s affordability crisis and quoted the Parliamentary Budget Officer’s estimate that the tax will cost Albertans more than $1,160 a year — told reporters that federal government policies are affecting Albertans’ living standards.

“We’ve got to push back against the federal government on all things that are making life more unaffordable for Albertans,” Smith said.

The Chamber’s president and CEO is in lockstep with Alberta’s premier.

“We’re already dealing with an inflationary situation and this isn’t going to help,” Deborah Yedlin said. “When you see the regulations causing higher costs for businesses and consumers, there’s no pricing power. If you’re a business, you can’t pass that on. If you’re incurring higher and higher costs, that’s something that you’re going to have to deal with in terms of having smaller margins.”

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