A fuel pump is seen in a car at a gas station in this file photoMARK BLINCH
For decades, drivers in the Canadian oil-producing province of Alberta filled up their cars and pickups with the cheapest gasoline in the country. Not any more.
A provincial carbon tax of 4.49 cents a liter went into effect in the new year that makes Alberta the third-cheapest province to buy gasoline. The fuel averaged C$1.11 a liter ($3.16 a gallon) in the province on Tuesday, higher than Manitoba's C$1.08 and Saskatchewan's C$1.06 a liter, according to GasBuddy.com, a pump price tracking website.
"Alberta is no longer king when it comes to gas prices," said Dan McTeague, a senior petroleum analyst at GasBuddy and former member of parliament, in a phone interview Tuesday. "Alberta is now somewhere in the middle of the pack."
Home to Canada's oil sands and the world's third-largest crude reserves, Alberta has enjoyed the lowest average pump prices in Canada since at least 1970, with fuel taxes that were sometime half that of eastern provinces, according to McTeague.
Cheap energy is a part of Alberta's culture, along with cowboys and ranches. Large pickup trucks and SUVs roam the streets of Calgary, the province's biggest city. Such gas-guzzling vehicles won't be as affordable to drive with pump prices now only about a cent lower than Ontario, Canada's most populist province where a new cap-and-trade rule also increased the tax in the new year, according to GasBuddy.
Continue Rising
The change comes just as Alberta is emerging from a two-year recession caused by the biggest oil price route in decades. The economy contracted 6.5 per cent over two years as oil producers curtailed investment and fired workers, according Royal Bank of Canada report last month. The unemployment rate of 9 per cent in November was the highest since the early 1990s, according to provincial data.
Albertans now pay almost 29 cents a liter in total taxes for gasoline, including the carbon tax, a 10 cent federal tax and 13 cent provincial sales tax, McTeague said. That compares with residents of Manitoba who pay just over 25 cents a liter in taxes at the pump. People in Newfoundland, on Canada's east coast, pay 47 cents a liter after taxes were increased last year, he said. Newfoundlanders also had the highest pump prices in the country Tuesday: $1.38 a liter.
Carbon taxes will continue to rise in future years as part of the Alberta New Democratic Party plan to improve the province's environmental record and combat climate change. The NDP, which ended 40 years of Progressive Conservative rule in elections in 2015, has argued that placing a price on carbon will help the province gain approval for oil pipelines.
Protect Environment
"It's the best way for us to protect for the environment and protect jobs and get pipelines built," Deputy Premier Sarah Hoffman told reporters in Edmonton on Jan. 1, according to Canadian Press.
Still, many in Alberta aren't pleased to pay more at the pump. The increase also means Canadians will continue to pay more for gas than Americans who paid$2.35 per gallon on average Tuesday.
On Dec. 31, Derek Fildebrant, a member of with the Opposition Wildrose Party, tweeted a picture himself filling a pickup truck full of jerry cans at gas station.
"Fillin' up the truck & every jerrycan I can find before the Carbon Tax strikes at midnight," he said.