Alberta and Ontario ring in the new year with higher gas prices
Torontonians woke up to $1.15 per litre of regular gasoline on New Year's Day. Ontario's newly enacted cap-and-trade program works out to about $17 per tonne of carbon, or 4¢ per litre of gasoline.
Albertans saw gas prices increase by 4.49¢/L while diesel prices rose by 5.35¢/L. Retail prices at the pump in Calgary were about $1.10/L earlier this week. Propane prices also rose by 3.08¢/L while wholesale natural gas prices rose by $1.011 per gigajoule.
Alberta's carbon price is currently $20 per tonne, rising to $30 next year. About 65% of Albertans are expected to get rebate cheques, targeted to families that make less than $47,500 per year.
It could be a lot worse, however. Gas prices in Vancouver topped $1.35/L this week, the highest in North America. BC's $30/tonne carbon tax works out to 6.67¢/L for gasoline. Wholesale gasoline prices in BC's Lower Mainland are governed by US West Coast prices, which are already higher than the rest of North America due to constraints in refining capacity. The Vancouver area also has a hefty municipal transit tax of 17¢/L.
BC has had a carbon tax in place since 2008. It is unclear if the tax has reduced emissions in the province since carbon emissions have risen and fallen with economic activity. Unlike the other provinces, BC's carbon tax is revenue neutral, with all funds redirected to low income families and general tax reductions.
Gas prices are unlikely to go down anytime soon, however. The federal government has mandated a minimum carbon price of $50/tonne by 2022.
About 13% of the world's carbon emissions are now subject to a carbon levy. Canada accounts for 1.6% of the world's greenhouse gas emissions.