Chestermere Drivers Brace for Double Gas Tax Hit in April

Residents of Chestermere and across Alberta are gearing up for a potentially costly start to April, as two significant tax increases on gasoline are slated to coincide on the first day of the month. In a one-two punch to consumers, the federal carbon tax is expected to jump from approximately 14 cents to over 17 cents per litre, while the provincial fuel tax, which had been partially suspended, is anticipated to be fully reinstated to 13 cents per litre as the new fiscal year rolls in.
The looming hikes come after a year of suspended provincial fuel taxes in 2023, followed by a partial reinstatement to nine cents per litre in January 2024. The Alberta government’s 2024 budget suggests that the fuel tax relief program is not expected to continue, placing additional budgetary pressures on motorists.
Experts, including Richard Masson from the University of Calgary’s School of Public Policy, suggest that the dual increase is a result of economic conditions and crude oil price forecasts, which have remained below $80 US per barrel. “Given the current budget pressures and oil price forecasts, it’s unlikely that any further tax relief will be extended,” Masson stated, advising Albertans to prepare for the impact on their wallets.
Despite forecasting a modest $367-million surplus for the upcoming fiscal year, down from a projected $5.2 billion surplus for 2023-24, the Alberta government has set an average oil price projection of $74 US per barrel over the next year. This price point falls short of the $80 US per barrel threshold that could trigger fuel tax relief for residents.
The budget outlines a sliding scale for tax relief based on oil prices, with the fuel tax set to decrease to nine cents per litre if average prices hover between $80 and $84.99 US per barrel. Should prices surpass $90 US per barrel, the province has committed to halting fuel tax collection entirely. However, Masson cautioned that these benchmarks are unlikely to be met due to global economic factors and oil market dynamics.
Amid these tax increases, advocacy groups like the Canadian Taxpayers Association have called on the Alberta government to seek alternative savings to maintain the fuel tax break. Kris Sims, the association’s Alberta director, criticized the provincial expenditure on projects like the construction of an NHL hockey rink in Calgary, suggesting that budgetary re-evaluation could offer some relief at the pumps.
The provincial government, in response to concerns, has stated that it reviews fuel tax rates quarterly, emphasizing that the tax funds essential programs and services for Albertans. An update on the fuel tax is expected before the end of March.
Meanwhile, the federal government defends its carbon pricing strategy, asserting that approximately 90 per cent of the proceeds are returned to families through rebates, with 80 per cent of households receiving more than what they pay in carbon taxes. As Chestermere residents face these imminent increases, the debate over the balance between fiscal responsibility and consumer relief continues to unfold.