Alberta's Premier suspends provincial gas tax, says it harms the 'poor' and 'powerless'

THE CANADIAN PRESS/Jason Franson

The Canadian Taxpayers Federation applauded Alberta Premier Danielle Smith's move to suspend the provincial gas tax for at least the next six months amid rising inflation and costs on necessities. 

"The provincial gas tax usually costs people about $15 every time we fill up a pickup truck in Alberta, so seeing it suspended is a good thing," said Kris Sims, Alberta Director for the CTF. "This fuel tax relief will also take some of the sting out of the high cost of diesel, so that helps with job site costs and shipping essentials."

In a live address Tuesday evening, Premier Danielle Smith announced the province would suspend the gas tax for at least six months. Smith also promised that reducing or eliminating the tax based on changes in the price of a barrel of oil would become a permanent policy of the UCP government. 

This evening's announcement of a suspension of the fuel tax in Alberta is good news folks who rely on diesel... which is pretty much everyone who eats food & uses stuff!

The tax suspension saves 13 cents per litre of diesel.

That saves about $120 per big rig truck fill up. pic.twitter.com/QftH7aKkPJ

— Kris Sims (@kris_sims) November 23, 2022

In a stern letter to Prime Minister Justin Trudeau, she highlighted how the carbon tax enamours the NDP and Liberal coalition. 

Smith said the carbon tax is "designed by the wealthy and well-connected," which does not readily impact their household finances but does everyone else. 

Albertan households are on the hook to lose upwards of $1,017 annually. 

The Canadian Taxpayers Federation has been urging the provincial government to suspend the fuel tax for months, with the Trudeau Liberals unwilling to provide similar relief to taxpayers. 

Smith called for the Trudeau Liberals in early November to cancel their planned tripling of the carbon tax by 2030, which has already contributed to higher inflation and borrowing costs for Albertan households. 

"It's to make life more painful for the poor and the powerless, and with that tax set to go up again in the middle of winter, when inflation is eating more and more into your hard-earned dollars," she said. 

"Every Albertan deserves to be free from the stress of wondering how thye're going to make rent or how they are going to keep their kids fed... So long as the affordability crisis lasts our government will be in Albertans' corner!"#affordability #abpoli pic.twitter.com/EakP6k5253

— Danielle Smith (@ABDanielleSmith) November 29, 2022

In March, the Bank of Canada Governor, Tiff Macklem, confirmed that the federal carbon tax bolstered inflation by 0.4 percent. 

Later that month, the Parliamentary Budget Office highlighted that "most households incur a net loss" from the carbon tax rebate in 2030-31 when the levy is $170 per tonne. 

"Premier Rachel Notley could have fought for you, but she made a different choice," persists Smith. 

"She chose to abandon the hundreds of thousands of Albertans to higher energy costs to seek the approval of the Trudeau Liberals." 

Between 2018 and 2022, the federal carbon tax backstop increased by $10 per tonne per year, reaching $50 per tonne in 2022. 

Despite the COVID-19 pandemic, the federal government implemented its planned carbon tax hike, raising it to $40 per tonne on April 1, 2021, and again another $10 the following April. 

Following back-to-back annual carbon tax hikes, the Parliamentary Budget Officer (PBO) estimated in a report released in late June that it would add $120 per tonne in carbon tax by 2030. 

Passed in 2018, the Greenhouse Gas Pollution Pricing Act capped the tax at $50 per tonne. But the federal carbon tax will increase from $50 per tonne in 2022 by $15 per year until it reaches $170 per tonne in 2030. 

Despite the skyrocketing inflation, the Trudeau Liberals plan to increase the carbon tax by $15 per year until it hits $170 per tonne in 2030. The federal carbon tax currently costs about 11.1 cents per litre of gasoline, up from 8.8 cents in 2021. That is expected to rise to 14.4 cents for Alberta in 2023 and 37.6 cents for 2030. 

By 2030, Albertans will pay 67.8 cents in fuel taxes per litre of gas.

Before the Tuesday night announcement, the provincial gas tax was 4.5 cents per litre of gas and set to rise along with the price of oil. 

"The remaining fuel taxes total about 28 cents per litre, and they're all imposed by the federal government," said Sims. 

The provincial government now forecasts a budget surplus of $12.3 billion for the current fiscal year, down from a previous forecast of $13.2 billion. The Alberta government lowered its budget surplus owing to a series of tax breaks and social program enhancements that cost taxpayers $2.5 billion, including $1.3 billion to combat inflation.