Provincial fuel tax suspended as carbon tax rises

Starting today, Albertans won't be paying provincial fuel tax at the pump.

In an attempt to provide relief from rising gas prices, the provincial government has withdrawn the provincial fuel tax, saving Albertans 13 cents per litre on gas and diesel.

It coincides with an increase in the federal carbon tax, a change that Premier Jason Kenney and the UCP as a whole have been vocally opposed to for some time now.

Kenney hosted a news conference today to discuss the change and to decry the carbon tax increase.

He says the increase will adversely affect Canadians in more ways than one. 

"If they stay in power and keep jacking up those carbon taxes, as their ridiculous NEP 2.0 plan would suggest, then hold on to your seatbelts, because you won't be able to afford filling up at the gas tank, let alone heating your homes, turning on the power, or just going to buy groceries."

He continues, "It's important to remember, this is not just about people who drive, this is not just about motorists, everything you get at the grocery store is brought in by a truck and every one of those trucks has to pay for diesel. Today we also reduced the price of diesel and we also reduced the price of marked fuel for our farmers who are struggling to cope with record-high input costs."

The exclusion of the fuel tax had a pretty instant effect on gas prices, which dropped to the mid $1.50's in the Foothills today.

Kenney noted an increase in other parts of the country,

"In Ontario, I understand that gas prices are up six cents over last night. That's the effect of the Liberal/NDP carbon tax height, but here in Alberta, we're seeing the benefit of the suspension of the provincial fuel tax."

The province's measure will stay in effect until at least June 30, and could be extended depending on the performance of West Texas Intermediate crude.

"As long as we benefit from high oil prices north of $80 a barrel per WTI, and that protects our budget as well because we know that as long as WTI is trading north of $80 a barrel, that our finances will be in balance, so we are not going to take more money out of people's pockets if we don't need it to maintain a balanced budget in Alberta," says Kenney.

The suspension of the tax will cost the provincial government an estimated  $100 to $115 million in fuel tax revenue over three months.