Motorists are in for some sticker shock at the pumps while transit riders will be digging a little deeper come Monday morning.
The federal government’s carbon tax kicks in April 1 in the provinces that refused to impose their own emissions pricing meaning people in Manitoba, Ontario, Saskatchewan and New Brunswick will see a bump in the cost of gasoline and heating fuel.
The federal tax is $20 a tonne for this year, but it’s set to increase by $10 annually until April 2022.
The starting rate adds 4.4 cents to the price of a litre of gas. EnPro predicts gas prices across the GTA could reach $1.24 a litre by Wednesday and remain at that level for several months.
The tax will also add about 4 cents to a cubic metre of natural gas while also driving up the cost of propane, butane and aviation fuel.
There is uncertainty about how widespread the impact will be, how businesses will receive rebates, and whether the tax will survive court challenges underway in two of the rebel provinces.
The federal government has yet to reveal details about a program to rebate some of the increased costs faced by small- and medium-sized businesses.
A new Abacus survey indicates people are still confused when it comes to the tax. Just over 80 percent of respondents in the four provinces where the tax will be in place say it’s already taking money from their wallets which is essentially the same feeling felt by people in provinces where the carbon tax will not be in effect.
There also seems to be a breakdown in the government’s message about the climate change rebate.
Residents of the four provinces will be getting rebates on their income tax returns. The rebates start at $128 annually, vary between provinces and increase for people with spouses or dependents at home. Essentially a family of four could get back enough to cover the difference for more than 110 tanks of gas a year but nearly half of Canadians polled say they had no clue.
The Conservatives have said they would scrap the carbon tax if elected this fall even though 70 percent of respondents identify climate change as a top five election issue and a large majority of those voters lean towards voting Liberal.
The federal government says the carbon tax is a sensible way to protect the environment – put a price on activities that pollute to discourage emissions, and give back most or all of the money through income taxes.
Ontario Premier Doug Ford has described the carbon levy as a “job-killing” tax that will increase prices on everything. He has warned that it could cause a recession – a claim economists dispute.
Ford and several PC MPPs took to Twitter on Sunday warning people about the gas price increase, taking pictures of themselves pumping gas or at gas stations.
Beverly Gilbert, a Calgary tax adviser, says the carbon tax will affect Canada’s competitiveness.
“The U.S. does not have any kind of carbon levy or carbon charge so it makes it more difficult to compete internationally,” she said.
An Ontario court is set to hear the government’s constitutional challenge of the carbon tax in April. A Saskatchewan court has already heard similar arguments and is expected to deliver its verdict shortly.
The gas pump won’t be the only source of sticker shock for commuters as the price to ride the TTC is going up as well.
While the cash fare will remain frozen at $3.25, Presto fares and the soon to be phased out tokens will climb from $3 to $3.10. Monthly passes will rise by $5.
The fare increases, which were approved in the recent city budget, are expected to bring in $26-million this year, which will help offset the $20-million the transit agency expects to lose due to the two-hour hop-on, hop-off option available to commuters.
While it’s been a little over three years since the last transit fare increase, the hike is not sitting well with many public transit advocates. NDP transit critic Jessica Bell is planning to table a private members motion calling on the province to match municipal transit funding to offset the need for fare hikes.