British Columbia

B.C. tax hikes on gas, luxury cars, tobacco take effect

Carbon tax increase has bumped up already-soaring gas prices in Metro Vancouver by 2 cents a litre

Posted: April 01, 2018
Last Updated: April 01, 2018

Gas prices on Sunday were peaking at around $1.55 cents a litre in Metro Vancouver. (Jonathan Hayward/Canadian Press)

It might feel like a bad April Fool's joke, but a slew of tax hikes in B.C. take effect today. 

Motorists, smokers and luxury car buyers will feel a strain on their wallets as part of the increases that the province introduced in the 2018 budget. 

The province has ramped up its carbon tax from $30 to $35 per tonne, the first of four $5 annual increases. 

ADVERTISEMENT

The carbon tax has bumped up gas prices by 1.2 cents a litre, which stations have rounded up to two cents.

Gas prices on Sunday were peaking at up to $1.55 a litre in Metro Vancouver.

"It's a really a flip of a coin as to whether or not it will stay where it is or drop," said Dan McTeague, an analyst with GasBuddy.com.

Prices have reached record highs at gas stations in downtown Vancouver, like this one at Burrard and Davie. (David Horemans/CBC)

McTeague warned that prices could surpass $1.60 a litre as the switch to summer gasoline next week adds another four cents a litre.

"Brace for more shock to the pumps," McTeague said. "This is going to be the summer of our discontent." 

ADVERTISEMENT

Other hikes in store

A gas tax in Victoria has jumped from 3.5 cents to 5.5 cents per litre, as part of a request by the Victoria Regional Transit Commission to expand service

Buyers in the luxury car market will now also pay more. 

Cars priced between $125,000 and $149,999 include a 15-per-cent tax instead of 10 per cent. 

And the tax on cars valued at $150,000 has jumped from 10 to 20 per cent. 

With the five-per-cent GST, that makes for a total of 25 per cent tax, meaning a person buying a $300,000 vehicle would pay $75,000 in taxes. 

A saleswoman shows customers an Aston Martin at a luxury car dealership in Vancouver. (Julie Gordon/Reuters)

B.C. car dealers are calling it a "punitive" tax, but that's unlikely to elicit sympathy from the public, said David Moscrop, a political scientist at Simon Fraser University. 

"No one is ever going to feel bad for a Lamborghini salesperson or a Lamborghini driver," Moscrop said.

Tobacco tax rates are increased by 2.8 cents to 27.5 cents per cigarette, and by 12.8 cents to 37.5 cents per gram for all tobacco other than cigars and cigarettes. 

Paying more for hydro

Meanwhile, BC Hydro has increased rates by three per cent. 

In March, the B.C. Utilities Commission rejected a request by the province to freeze hydro rates for the coming year, which the B.C. NDP government had promised to do in the election. 

The commission rejected the request, arguing that the increase still wouldn't be enough recover BC Hydro's costs.