Ah yes, a new year and a new opportunity for new thoughts or thought processes … at least that’s what I believed on New Year’s Eve.
But thinking is a foreign invader in the lexicon sanctity of governmental direction. I was hoping against hope that I would be able to uncork my boundless and built-up optimism for the coming year, but it got lost in political dialogue, or as I like to call it, “fogalogue.”
Quite opposite to many politicians, I find it difficult to get excited about taxes. Consumers in Alberta must feel the same way when their oh so left-leaning NDP government increased the carbon “levy” (another word for tax that they avoid using) by 50% from $20/ton to $30/ton at 12:01 a.m. Jan. 1, 2018. This tax is aimed primarily at the consumer of transportation fuels, including natural gas, and does not apply to the farming industry, which apparently the government does not believe produces carbon dioxide. Nor does it apply to refined products that are exported into the U.S. that do not have a carbon tax, or GST.
Applying a carbon penalty to exported refined products to its only customer would make Alberta pricing uncompetitive and force Edmonton refineries to slow down production, which would then lower the tax revenue for the Alberta government.
Can’t have that, now can we?
What this all means to the diesel and gasoline consumers in Alberta is that pump and Cardlock prices will increase for diesel from $0.0535/liter to $0.0803/liter, and for gasoline from $0.0449/liter to $0.0673/liter.
If you say it ain’t so, you would be right, because by a miracle of mathematics, GST at 5% is added making the increases: diesel, $0.084/liter; and gasoline, $0.070/liter. This almost makes a trip to Saskatchewan worthwhile as they have no carbon tax yet and have until the end of the year to come up with one that is acceptable to Prime Minister Justin Trudeau and Catherine McKenna, our environment minister.
The price differentials are not reserved for Alberta versus Saskatchewan since the Maritimes have yet to cave into the Trudeau carbon ultimatum.
Perhaps he can calm the beating hearts of consumers in Ontario and explain why the rack prices in Ontario, which include the cap-and-trade tax similar to the Alberta carbon “levy,” are higher than those in the Maritimes by eight cents per liter for gasoline and 10 cents per liter for diesel.
How can the transportation sector in Ontario and Quebec compete within Canada when they’re up against their Maritime cousins, let alone the U.S. border states that have no carbon taxes, no GST, and have a dollar that is beating the feathers out of our Loonie?
Simple answer: they can’t.
Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc.
Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada. All posts by Roger McKnight