Premier’s plan to hike Alberta’s fuel tax come Jan. 1 is a blow to affordability
Alberta drivers need to pay more at the gas pump like they need a kick in the face.
So why is Premier Danielle Smith planning on hiking Alberta’s fuel tax back up on Jan. 1, 2024?
With Christmas and holiday bills looming, Albertans are fighting to afford groceries and home heating thanks to Prime Minister Justin Trudeau’s carbon taxes.
Yet Smith is making plans to put the provincial tax back on fuel. “In the new year, if these prices continue to be moderate like this, we will be bringing the fuel tax back, yes,” Smith told listeners to her weekly radio show.
Smith did the right thing when she fully suspended the 13 cent per litre provincial fuel tax.
So why the plan to hike it back up?
The government isn’t hurting for tax revenue.
In 2020-21, the government took in more than $19.5 billion in total taxes. In 2021-22, it collected more than $23.5 billion, and in 2022-23, the government pulled in more than $26.5 billion. The tax collectors are swimming in cash, while Alberta’s fuel tax suspension has given Albertans the lowest gasoline and diesel prices in Canada.
The suspension saves families about $70 per month. It saves about $10 to fill a family minivan and about $15 every time drivers fill a light duty pickup truck.
Truckers save about $130 every time they fill up their big rigs with diesel, reducing shipping costs.
The move has saved Albertans hundreds of millions of dollars and it’s one of the province’s affordability advantages. Smith needs to make the right call and extend the suspension again.
Manitoba Premier Wab Kinew just announced that his NDP government is suspending his province’s 14 cent per litre fuel tax on Jan. 1.
Does Smith really want Albertans paying higher fuel taxes than drivers in NDP-run Manitoba?
Ontario Premier Doug Ford has also extended his fuel tax suspension.
Hiking the fuel tax is also a bad idea on the national stage.
Slapping Alberta drivers with a big fuel tax hike would send the wrong message to Trudeau. Most of Canada’s premiers are ganging up on him and telling him to scrap his carbon tax on home heating.
Trudeau caused a national uproar when he carved out special carbon tax relief for homes that heat with furnace oil – which are primarily located in Atlantic Canada.
Smith was one of the first premiers out of the chutes, rightly taking Trudeau to task for not scrapping the carbon tax on all forms of home heating, including natural gas and propane.
Average families will pay about $300 extra in the carbon tax on natural gas and propane to heat their homes this winter.
There’s a gas pump tax connection here.
One of the reasons Smith suspended Alberta’s 13-cent per litre fuel tax was to take some of the sting out of Trudeau’s 14-cent per litre mandatory carbon tax at the pump.
“We’ve got to push back against the federal government on all things that are making life more unaffordable for Albertans,” Smith told the Calgary Chamber of Commerce this past summer.
Albertans still need Smith to play offence for them against Trudeau’s carbon tax.
Trudeau is raising his carbon tax to 17 cents per litre of gasoline and 21 cents per litre of diesel on Apr. 1, 2024.
Since nearly everything we eat and use is delivered on a truck running on diesel, the carbon tax makes everything cost more.
Suddenly hiking the provincial fuel tax on Albertans would lower Smith’s affordability shield and leave Albertans bearing the full brunt of Trudeau’s carbon tax.
Smith doesn’t want to be the first premier to wobble the shield wall against unaffordable fuel taxes, especially when people are struggling to afford the basics of life like groceries and energy.
Working families in Alberta are depending on food banks in unprecedented numbers, and inflation is making most goods more expensive.
Smith has done the right thing for more than a year by keeping Alberta’s fuel tax fully suspended, saving Alberta families serious money.
Now she must do the right thing again and keep her fuel tax shield up for Albertans.
Kris Sims is the Alberta Director for the Canadian Taxpayers Federation.
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