Alberta Drops Provincial Fuel Taxes Until End of Year, Saving Motorists 13 Cents per Litre
EDMONTON—Alberta drivers will see a continued freeze on provincial fuel taxes, saving motorists 13 cents per litre with every fill of gas or diesel until the end of the year, following a vote in the legislature.
“The rising cost of living is a top concern for Albertans and Alberta’s government remains committed to keeping everyday life more affordable by saving Albertans 13 cents per litre every time they fill up for the remainder of the year. This will help an Alberta family save between $6 and $18 every time they fill up their vehicle,” the Alberta government said in a news release on June 19.
Premier Danielle Smith and the United Conservative Party (UCP) made the freeze on fuel tax a campaign promise during the recent election, which took place on May 29. The Alberta legislature and Treasury Board voted in favour of the freeze, which is in place regardless of oil prices, until Dec. 31, 2023.
At a news conference on June 19, Smith—accompanied by two newly appointed ministers: Nathan Neudorf, minister of affordability and utilities, and Nate Horner, finance minister and president of the Treasury Board—said lower gas prices will lower the cost to deliver services and supplies, suggesting Albertans will save money not only at the pump, but also at the store.
“Whether it’s groceries, baby formula, or laundry detergent, lower fuel costs means shipping products to stores cost less,” said Smith. She said small business owners will also benefit from the reduction in taxes.
The premier was asked what would happen if gas stations pocket the savings instead of passing it on to consumers. Smith said Service Alberta “has the ability to enact consumer protection fines if companies are gouging,” and it is her “expectation” going forward that the province’s gas prices will remain the lowest in the country.
The government provided examples of gas prices across the country on June 17, sourced from the Canadian Automobile Association (CAA), which indicated residents of B.C. are paying the highest prices for gas at 191.2 cents per litre while Alberta was at the cheapest rate at 141.4 cents per litre, followed by Nova Scotia at 151.1 cents per litre. The price in Ontario was 157 cents per litre, with Saskatchewan and Manitoba at 157.4 and 157.9 cents per litre respectively.
Fuel prices are higher on the east coast, starting with New Brunswick at 160.9 cents per litre, followed by P.E.I. at 161 cents per litre, Newfoundland and Labrador and 169.9 cents per litre, and Quebec coming in at second highest in the country, at 170.4 cents per litre.
“To date, Albertans have saved $1.5 billion and paid what have often been the lowest fuel prices in the country. Extending the pause will save another $520 million for Albertans,” the government said, noting that the Canadian average fuel cost sits at about 158.8 cents per litre.
Drivers in the province are still paying roughly 31 cents in federal taxes per litre of gas, with the federal government’s carbon tax increase in April, said the province.
The fuel tax was first introduced in April 2022 under then-Premier Jason Kenney, and was used again in January with the government stating it wanted to “help combat high inflation.”
Smith said her government is “committed to keeping life affordable for Alberta families.”
Horner said that Alberta is in a “strong fiscal position” and can offer the fuel freeze to try and help Albertans with the rising cost of living and inflation.
“These savings have and will continue to have a real impact on the pocketbooks of Albertans,” said Horner.
As of Jan. 1, 2024, Alberta will see a permanent fuel tax relief program come into place, which will offer savings on the provincial portion of fuel taxes based on the price of West Texas Intermediate (WTI). If the WTI price exceeds legislated thresholds—should it reach $90 or more average per barrel—Alberta will drop the fuel tax collection entirely.
If oil sits at $85 to $89.99 average per barrel, the fuel tax will be partially reinstated at 4.5 cents/litre. If oil goes to a price of $79.99 average per barrel or less, the fuel tax will be fully reinstated at 13 cents per litre, but will be phased in gradually to “reduce price shock to consumers,” the government said.
