Canadians are about to feel the full effect of carbon taxation as we continue to move into the new year. For the past couple weeks, gas prices have remained relatively low. But all that is about to change.
In 2019, Canadians will encounter the highest gas prices they've seen since 2014 when they head to the pump. And the carbon tax isn't the only reason.
TL;DR Carbon taxes are rolling out across the country and Canadians are going to see an increase in gas prices when they go to fill up at the pump this year.
For the past month or so, Canadians have seen surprisingly low gas prices when they've headed to the pump to fill up. Due to a "glut" of oil in the market, prices have dropped.
While this benefitted Canadian drivers, the Canadian economy ran the risk of losing $50 million a day when considering lost revenue and lost taxes.
Canadian drivers saw themselves saving nearly $10 at the pump per visit, but this price drop has severely impacted Alberta.
Many Albertans rely on oil to maintain their standard of living. It's an industry all Canadians inevitably see benefits from. So when there is more supply than there is demand, and Alberta continues to have the problem of no pipelines, the oil market becomes volatile.
Clearly, these low prices were a bit of a tease for a future we don't have to look forward to. That's because, as we enter a new year, new legislation is about to come into play.
The federal government is hoping to roll out a carbon tax this year that will impact the entire nation. While some provinces plan to fight the bill, many also wonder about the constitutionality of this kind of taxation.
The breakdown of the tax is as follows: the government will put in place a federal fuel charge levied at $20 per tonne or carbon emissions.
The estimated increase in gas prices is around 4.4 cents per litre.
The fuel charge is then scheduled to increase by $10 each year, until it reaches $50 in 2022. That means gas will be 11 cents more expensive in 2022.
Planning on buying a Prius yet?
The tax, of course, is meant to encourage Canadians to move away from unclean energy sources, like gas. Alternatives include public transit, carpooling and, as Narcity suggested, embracing your bike when the weather allows.
The country-wide carbon tax won't take full effect until April, but up until then, provinces will be rolling out their own plans for taxation.