Gas prices drop in Alberta (Photos: A.Epp/LNN April 2, 2022)

By Cathy Gibson

Temporary relief at gas pumps for Alberta drivers

Apr 2, 2022 | 11:31 PM

LETHBRIDGE, AB — Gas prices have dropped in Alberta despite an increase in the federal carbon tax.

As planned on April 1, 2022, the federal carbon tax increased to $50/tonne, which equates to an increase of 2 to 3 cents per litre at gas stations.

On the same day, Alberta’s provincial gas tax was suspended. That offsets some of the federal carbon tax increase, so Alberta drivers are seeing a 10 to 11 cent drop in gas prices.

This situation has been in the works for some time. Kenney originally promised to cancel the provincial gas tax during his election run in 2019. However, at that time, the federal government had already directed all provinces and territories to have a carbon tax. If a jurisdiction did not have one of its own, then Ottawa would impose a federal carbon tax on it.

Kenney fought against the idea all the way to the Supreme Court, and he still believes the price at the pump should be lower for Albertans.

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“The problem is that includes the three cent a litre increase from the Liberal-NDP carbon tax,” Kenney said during a news conference in Calgary on Friday. “We fought against that. We sued the feds all the way to the Supreme Court. Regrettably, we lost. We just passed a motion in Alberta’s Legislature calling on the feds not to raise the carbon tax today, on April Fool’s Day, but they ignored us because they want to punish Canadians for filling up their gas tanks, heating their homes, turning on the electricity, and living normal lives.”

The government says the provincial tax break for Alberta drivers is a temporary measure that will be in effect until at least June. Beyond that, Kenney says the future of the provincial gas tax will depend on the fluctuating price of West Texas Intermediate (WTI) crude oil.

“We know that as long as WTI is trading at more than 80 bucks a barrel, that our finances will be in balance, so we are not going to take more money out of people’s pockets if we don’t need it to maintain a balanced budget in Alberta.”

The province says the suspension of the provincial gas tax will equate to an estimated $100 million to $115 million drop in fuel tax revenue for the province in each of the first three months of the tax hiatus.

The province says Albertans will see further cost savings through electricity rebates and a natural gas relief program. The government says more details on these additional cost-saving measures will be released in the coming months.

READ MORE: Kenney urges Ottawa to cancel planned federal carbon tax increase in April

READ MORE: Alberta Legislature votes in favour of motion calling for end to federal carbon tax increase