Alberta, Saskatchewan, Atlantic Provinces Join Forces Against Ottawa’s New Fuel Regulation

The prices for a litre of diesel and various grades of gasoline are seen on a gas pump at a Petro-Canada station, in Burnaby, B.C., on March 2, 2022. Darryl Dyck/The Canadian Press

Ottawa’s new fuel regulation doesn’t sit well with six provinces, as Alberta becomes the latest member to join forces with Saskatchewan and Atlantic Canada to oppose the new measure that comes into force on July 1.

Two days before the Clean Fuel Regulation (CFR) was enforced, Alberta’s Minister of Environment and Protected Areas Rebecca Schulz wrote to federal Minister of Environment and Climate Change Steven Guilbeault, calling on his government to “immediately halt” the implementation of the new policy.

Schulz said the policy will “harm provincial economies” in Alberta, Saskatchewan, and Atlantic Canada.

“Canadians are already struggling with high inflation. Adding fuel to the fire by hiking the cost of gasoline and diesel will be devastating,” she said in her letter on June 29.

“A plan that unfairly increases costs on families and does not account for regional differences is no plan at all.”

Alberta Premier Danielle Smith backed her minister.

“We’ve got to push back against the federal government on all things that are making life more unaffordable for Albertans,” she told media following an address to the Calgary Chamber of Commerce at the Hyatt Regency in downtown Calgary on June 29, reported by the Calgary Herald.

Double Cost Whammy

Guilbeault’s department has estimated that the CFR, when fully implemented in 2030, will increase the price of gasoline by up to 17 cents per litre and diesel 16 cents per litre.

On top of the federal carbon tax, which will add between 37 cents and 40 cents to a litre of gasoline by 2030 based on various estimates, this means consumers could end up paying close to 60 cents more per litre by 2030.

The rationale for the CFR, according to Guilbeault’s department, is that it will help to remove up to 26 megatonnes of greenhouse gas (GHG) emissions in 2030, which is equal to removing about two weeks of GHG from the Canadian economy.

The situation is particularly heated on Canada’s East Coast, as July 1 also marks the same day the four Atlantic provinces move from their provincial carbon-pricing systems to that of the federal system—creating a double cost whammy for people at gas pumps.

Premiers of the four provinces have requested a delay in the rolling out of CFR. In a joint statement on May 25, they said the enforcement on July 1 will increase inflation and that their jurisdictions are disproportionately affected.

“These increases will further add to inflationary pressures that will increase the costs of other goods imported to the region,” they said.

Saskatchewan Premier Scott Moe joined their campaign in June, and also called for Guilbeault to hold off on implementing the CFR.

“I agree with my Atlantic counterparts, premiers from Atlantic Canada, that have called on the federal minister to delay the implementation of these to ensure that the minister is doing proper and appropriate consultation,” he told CBC News.

“The clean fuel standard has a potential for quite a disproportionate impact in various areas of the nation.”

‘The Highest Cost’

Guilbeault said in a statement on May 26 that the increased profits made by refineries in the Atlantic region mean they don’t have to offload the cost of the new regulations onto consumers right now.

On May 18, the minister criticized an analysis done by Parliamentary Budget Officer (PBO) Yves Giroux, who highlighted the economic impact of CFR in his report.

Guilbeault said the PBO report was “unbalanced,” and “incomplete” as it “fails to recognize the cost of climate change to Canadians,” and that the report draws “price impact conclusions that are substantially greater” than the figures his department provided to the budget officer.

Giroux’s report estimated that the CFR would hit Alberta, Saskatchewan, and Newfoundland and Labrador with “the highest cost.”

The cost increase to the average Alberta household will be $1,157 in 2030, according to Giroux’s estimates. As for Saskatchewan, households will incur an extra cost of $1,117 on average. In Atlantic Canada, households in Newfoundland and Labrador ($850), Nova Scotia ($635), Prince Edward Island ($569) and New Brunswick ($501) will similarly fork out more from their pockets by then.

“Since lower income households generally spend a larger share of their income on transportation and other energy-intensive goods and services compared to higher income households, on average the Clean Fuel Regulations will have a greater impact on these households,” Giroux said in a May 18 news release.

Noé Chartier, Peter Wilson and The Canadian Press contributed to this report.