Up to 25-cent drop in gas prices possible across Canada

Canadians could see significant price drops at the gas pumps in the coming weeks but they may not last long.

In his first move as Prime Minister, Mark Carney signed an order-in-council to end the consumer carbon price on Friday. The order would set fuel charge rates for all types of fuel and combustible waste to zero after March 31, 2025.

This could mean gas prices could drop by as much as 25 cents a litre, fuel price expert Dan McTeague of GasWizard.ca, who is also the president of Canadians for Affordable Energy, told INsauga.com.

“So as of Tuesday, April the first, and one hopes that this isn’t an April Fool’s joke, the price would drop effectively, right across the board, here in Ontario, 20 cents a litre, almost 25 cents a litre drop for diesel, McTeague said.

The price drop will be different across Canada.

“So it really varies depending on the province and the GST,” McTeague said.

McTeague said he is focused on the diesel price as it has a cascading effect on the prices of everything else.

“All transportation is affected by the price of diesel that it has been pushed up 25 cents a litre artificially, has no small way contributed to the cost of agriculture, mining, transportation and pretty much everything else that we do,” he said.

“Diesel is the global workhorse when it comes to fuels. And so that dropping 25 cents means, if it’s sustained for a lengthy period of time, we can start to see some serious revisions, downward revisions to inflation and price pressures.”

McTeague suggests the drop in gas prices will be temporary.

If the Liberals are voted in once the federal election is called, they will implement an industrial carbon tax, he said.

“Basically, refiners will now pay the 20 cents a litre, and they will promptly pass it right on to consumers,” McTeague said.

A federal election is expected to be called soon, and recent polls suggest a narrow gap between the Liberals and Conservatives.

The suspension of the carbon tax may be so temporary, it won’t even have an impact on inflation, because it could be restored in the form of an industrial carbon tax, McTeague added.

“So if the election is called next Sunday, the 22nd or 23rd the clock starts ticking on a minimum 37-day (election) campaign,” he said. “It’s 30 days of no carbon tax.”

The Conservative Party has promised to “axe the tax” completely.

The idea behind carbon pricing is to reduce emissions, the federal government has said. Canada Carbon Rebate returns fuel charge proceeds to Canadians through direct deposit or cheque, every three months, ensuring most households get more money back, with lower-income households benefiting the most, according to a press release from the Canadian government.

McTeague argues most people don’t get back what they pay.

“It’s fairly clear to me that for average families, the carbon rebate is less than what you pay for it except for those who truly are on significantly lower budgets in which they in which they have, maybe common apartments or whatever, where they were heating isn’t as expensive,” he said.

With files from Ryan Rocca

Lead photo: Engin Akyurt