Edmonton

Alberta to pause collection of provincial fuel tax to help consumers shocked by high prices

The Alberta government will stop collecting the 13-cent per litre provincial fuel tax on April 1 as long as the benchmark price for oil remains above $90 US, Premier Jason Kenney said Monday.

Province will also provide $150 electricity rebates to families, farms, small businesses

Alberta motorists hit hard at the pumps with skyrocketing fuel prices will get a break starting April 1, Premier Jason Kenney announced Monday. (Matthew Howard/CBC)

The Alberta government will help hard-hit consumers by pausing the collection of its 13-cent per litre provincial fuel tax on April 1,  Premier Jason Kenney said Monday.

"This massive tax relief is a response to skyrocketing costs at the pump and is going to provide Albertans with the relief that they need when the cost of everything is going up," Kenney told a news conference.

"Albertans told us they needed relief from rising costs. We've heard them loud and clear."

The pause in tax collection will apply to gasoline and diesel fuel. The change also will apply to the four-cent per litre provincial fuel tax on marked (dyed) gasoline and diesel.

The pause will remain in effect as long as the benchmark price for West Texas Intermediate (WTI) crude oil remains above $90 US per barrel, Kenney said. Collection of the provincial fuel tax would resume when WTI prices fall below $80 US, he said.

Alberta to end provincial fuel tax while oil prices are high

5 months ago
Duration 2:54
Premier Jason Kenney says beginning April 1, the provincial 13-cent per litre fuel tax will be removed from the price of gasoline and diesel. The tax will be reapplied once the price of oil drops below $80 US per barrel WTI.

The government will review the collection of the fuel tax on a quarterly basis and, if required, consider reinstating collection in stages, based on the average price of WTI over a number of weeks, the province said in a news release.

The government would not reinstate the gasoline tax until at least July 1, they said.

If the pause in fuel tax collection is in place for the full fiscal year, the cost would be about $1.3 billion, Finance Minister Travis Toews told the news conference.

April 1 is the day the federal carbon tax is set to rise again, from just under nine cents per litre to just over 11 cents per litre.

Kenney previously said there would be no point for the Alberta government to offer relief at the pumps while the federal carbon tax hike was set to drive prices higher.

Kenney said Monday he changed his mind because Albertans needed immediate relief from high fuel prices.

On Monday, GasBuddy.com was reporting the cheapest gas prices in the Edmonton area ranged from $1.51 to $1.54 per litre.

Kenney and Toews repeatedly slammed the federal government's intent to raise carbon taxes as inflation hammers Canadians' bank accounts.

"The change to Alberta's fuel tax will put money back in Albertans pockets at a time when other levels of government seek to take more out," Toews said.

At an Edmonton gas station on Monday, driver Julia Viederstadt said she's already started changing her habits — walking more, cycling and riding transit — to avoid filling up her gas tank.

"They should have implemented that yesterday if it were up to me," she said of the gas tax cut. "If it has to be April 1, better than never."

Electricity rebate coming

The government will also provide $150 electricity rebates to help Alberta families, farms and small businesses with high electricity bills.

More than one million homes, farms and businesses are expected to receive a $50 monthly rebate for each of the months of January, February and March. The retroactive rebates will be applied directly to energy bills. Kenney said 

Kenney said the electricity rebate program will cost $280 million.

The province said it will work with utilities and regulators to determine exact details, including rebate timing.

University of Calgary economics professor Trevor Tombe said tinkering with the price of gas might have the unintended consequence of driving prices even higher.

Expensive fuel is a signal for consumers to use less, he said, and artificially lowering that price could change their behaviour.

Giving cash or discounts directly to consumers, such as the electricity rebates will, is a better way for governments to help citizens with affordability, Tombe said.

NDP energy critic Kathleen Ganley said the government's new measures come nowhere close to offsetting the additional costs the United Conservative Party government has foisted onto citizens.

"It appears to be woefully inadequate to meet the needs of Albertans who are struggling with rising costs," she said.

A $50 rebate doesn't go far when some households are staring down a $700 utilities bill, she said.

The government also touted a previously announced consumer natural gas rebate, which would kick in next October, should gas prices rise above $6.50 a gigajoule.

ABOUT THE AUTHOR

Janet French

Provincial affairs reporter

Janet French covers the Alberta Legislature for CBC Edmonton. She previously spent 15 years working at newspapers, including the Edmonton Journal and Saskatoon StarPhoenix. You can reach her at janet.french@cbc.ca.

With files from Audrey Neveau, Craig Ryan and Scott Neufeld

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