Prairie Premiers Urge Trudeau to Suspend Federal Carbon Tax Hike

The prices for a litre of various grades of gasoline are displayed on a pump at a Shell gas station, in Vancouver, on March 8, 2022. The Canadian Press/Darryl Dyck

Premiers from the prairie provinces are urging Prime Minister Justin Trudeau to suspend plans to raise the federal carbon tax in light of the surging energy costs being borne by Canadians.

In a joint letter sent to Trudeau on March 25, Alberta Premier Jason Kenney, along with Saskatchewan Premier Scott Moe and Manitoba Premier Heather Stefanson, called upon the prime minister to temporarily stop the application of the federal carbon tax hike on April 1.

“This is the worst possible time to increase energy costs on Canadians,” Alberta Premier Jason Kenney said in a tweet on March 28. “The Prairie Provinces are urging Prime Minister Trudeau to stop the carbon tax.”

The carbon tax, as part of the Liberals’ plan to reduce greenhouse gas emissions by 2030 to 40-45 percent lower levels than in 2005, will increase from its current cost of $40 a tonne to $50 a tonne on April 1. It will then rise by $15 a tonne yearly starting in 2023 until it hits $170 per tonne in 2030.

“The two-year pandemic has clearly placed considerable financial stress on families and businesses, despite the unprecedented supports provided by the federal and provincial governments to date,” the premiers wrote.

“More recently, inflation levels not seen in decades have significantly increased the cost of food and transportation and other essential goods. Canadians were already feeling the pain of supply chain and other inflationary causes.”

Gas prices in Alberta averaged around $1.66 per litre on March 28, reported the Canadian Automobile Association. Saskatchewan hovered at $1.69 a litre, while Manitoba had the highest among the prairies provinces at $1.73 per litre. British Columbia has the highest average in the country at around $1.95 per litre.

The premiers said the “skyrocketing energy costs” will not drop in the short term, given the sanctions imposed on Russia over their ongoing invasion of Ukraine. Canada has imposed a barrage of sanctions on Russian officials and entities including asset freezing, export and import restrictions, and financial prohibitions.

The premiers said the war in Ukraine compounds the many other cost pressures Canadians currently face, and that government leaders “now need to provide obvious pricing relief to families and businesses being squeezed.”

“Further increases to fuel prices, through the federal carbon tax, are not appropriate policy measures at this critical juncture,” says the letter.

A recent report by the Parliamentary Budget Officer on the financial impact of the carbon tax on Canadians calculated that in 2021-22, each household in Alberta is expected to incur an average net loss of $507, while Saskatchewan, Manitoba, and Ontario, will incur an average net loss of $309, $225, and $276, respectively.

By 2030–31, the amount will have spiked, with Alberta experiencing a net loss averaging $2,282 per household, Saskatchewan at $1,464, Manitoba at $1,145, and Ontario at $1,461.