Albertans could face 2 gasoline tax hikes on the same day - Action News
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Albertans could face 2 gasoline tax hikes on the same day

April in Alberta often brings unwelcome spring snowstorms and the Stanley Cup playoffs. This year it will mean much higher prices at the gas pumps.

Provincial fuel tax relief expected to end while federal carbon tax increases on April 1

A gas pump on the hook.
Alberta's 2024 budget says the fuel tax relief program is 'not anticipated to remain in effect' past March 31. (Matthew Howard/CBC)

April in Alberta often bringsthe Stanley Cup playoffs and unwelcome spring snowstorms.

This year it willalso mean higher prices at the gas pumps.

Ottawa's carbon tax is set to climb from around 14 cents to more than 17 cents per litre of gasoline on April 1.

And Alberta's fuel tax is expected to be fully reinstated to 13 cents per litre of gasoline the same day as the new fiscal year begins.

The province's 2024 budget said the fuel tax relief program is, "not anticipated to remain in effect."

WATCH | The ongoing confusion about carbon tax rebates:

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Alberta's fuel tax was suspended for all of2023 and partially reinstated at ninecents per litre of gasoline in January 2024.

Richard Masson, executive fellow with the University of Calgary's School of Public Policy,said budget pressures and crude oil forecasts below $80 US per barrel mean it's unlikely Premier Danielle Smith's government extends another tax break.

"I wouldn't hold my breath looking for relief....It's not really a high likelihood," he said.

"People need to get their head around, 'What am I going to do to make sure I'm as efficient as possible when I use gasoline or diesel fuel.'"

Alberta is projecting a slim $367-million surplus over the next fiscal year. The surplus for 2023-24 is forecast at $5.2 billion.

In the budget, the Alberta government is projecting an average oil price of $74 US per barrel over the next year.

A pumpjack extracts oil as the sun sets.
The province is forecasting oil prices to average $74 US per barrel. Crude prices averaging $80 US or more mean lower fuel tax rates for Albertans. (Jeff McIntosh/The Canadian Press)

Tax relief to come if oil prices climb

Crude prices averaging $80 US per barrel or more would triggerfuel tax relief for Alberta residents.

If the fuel tax is fully reinstated next month as expected, average prices between $80to $84.99 US would drive the tax down to ninecents per litre.

If prices climb above $90 US per barrel, the province would stop collecting a fuel tax.

But Masson said Albertans shouldn't count on those necessary benchmarks being met.

"It's not clear that [oil prices are] going to be able to hold that level because China has continued to be weak. Russia's continuing to find ways to get its oil to market," he said.

"Unless interest rates start to come down, economies might start to slow."

The benchmark crude blend West Texas Intermediate (WTI)hit$79.36 US in early March.

Savings should come from elsewhere, advocacy group says

Kris Sims,Alberta director of the Canadian Taxpayers Association, saluted Danielle Smith's government for "keeping spending under control" in this year's budget but said the province could find savings elsewhere to keep the fuel tax break going.

"They're still spending hundreds of millions of dollars on building an NHL hockey rink in Calgary," she said.

A building is shown along a downtown skyline.
A new event centre would replace the aging Saddledome, seen in this file photo. (Jeff McIntosh/The Canadian Press)

"We're convinced that the experts in the treasury department can go through this budget I'm holding in my hand here, line by line, and find the savings in order to give folks some tax relief at the pumps."

In a statement, the provincial government said it reviews fuel tax rates quarterly and the tax funds programs and services that Albertans rely on.

The province said it will provide an update on the fuel tax before the end of March.

Ottawasays about 90 per cent of its carbon pricing proceeds return to families through carbon tax rebate payments, and 80 per cent of households receive more money than they're taxed.