The introduction of a second federal carbon “tax” on Janum July makes an already complicated calculation even more difficult. In Quebec, it is currently impossible to know exactly what the cost of CO2 is in a liter of gasoline.
• Also read: Gasoline Taxation: Increase, Confusion and Inflation
• Also read: New carbon tax could cost $436 per Quebec family by 2030
“We have no way of knowing,” says Carol Montreuil of the Canadian Fuels Association.
For the refinery representative, one thing is certain: the Clean Fuel Regulations that came into force on July 1 are “expensive”.
The Ottawa House Budget Officer estimates that this will increase the price of a liter of gasoline by 17 cents by 2030 if companies are required to be 100% compliant.
The Canadian Taxpayers Federation (CTF) speaks of an annual increase of 2 to 3 cents per liter of gasoline until 2030.
“It can be more at the beginning and less at the end, it depends on the investments that the oil companies make to meet the requirements,” offers Mr. Montreuil.
Companies are already investing to meet the targets of the new regulations because “by far the best way to achieve this is through biofuel blending”.
Carol Montreuil cites Imperial Oil, the Canadian arm of ExxonMobil, as an example. The company is building a $720 million biodiesel plant near Edmonton. It will become operational in 2025.
So he wasn’t surprised when he saw an immediate effect at the pump on July 1st. Oil majors have already started passing the bill on to consumers.
12 to 13 cents per liter
In Canada, carbon has had a price since 2019: it will cost $65 per tonne in 2023 and will cost an additional $15 per tonne every year through 2030.
Quebec is exempt from this pricing due to its emissions cap and trade system (SPEDE).
The Régie de l’énergie du Québec calculates that the SPEDE increases the current price of a liter of gasoline by 9.23 cents.
If we add the 2 to 3 cents from the new federal regulation, from which Quebec is not exempt, we get an amount of 12 to 13 cents. These are the current CO2 costs in Quebec per liter of gasoline.
a mess
Everyone in the industry is aware that it’s not easy for the consumer to navigate.
“It’s normal that people don’t understand it,” recognizes Sonia Marcotte of the Association of Quebec Energy Distributors (ADEQ).
The retailers it represents would have preferred the SPEDE to be a tax as such.
“It would be clear on the bill, the consumer could see how much it cost them, and it would be the same for everyone,” she says.
Currently in Quebec, the cost of CO2 is built into the price of the refinery and even ADEQ does not know the actual cost.
Gasoline taxes in Quebec in 2023
GST: 4.3%
QST: 8.7%
Gasoline public transit tax (Greater Montreal): 3 cents/litre
Federal consumption tax: 5%
Fuel tax in Quebec: 19.2 cents/litre
SPEDE (“Quebec Carbon Tax”): 9.23 cents/litre
Clean Fuel Regulations (Federal Carbon Tax): 2-3 cents/litre
Can you share information about this story with us?
Write to us or call us directly at 1-800-63SCOOP.