Canadians could soon see a significant drop of up to 25 cents per litre at the gas pumps following a major policy shift by Prime Minister Mark Carney. In his first move as leader, Carney signed an order-in-council to eliminate the consumer carbon price, effectively reducing fuel charge rates to zero after March 31, 2025.
According to fuel price expert Dan McTeague, who heads GasWizard.ca and Canadians for Affordable Energy, the price of gas could drop 20 cents per litre in Ontario, while diesel could see an even steeper decline of nearly 25 cents per litre.
“As of Tuesday, April 1st—and let’s hope this isn’t an April Fool’s joke—gas prices could drop significantly across the country,” McTeague said.
The price reduction will vary by province, depending on regional taxes and GST rates.
McTeague emphasized that diesel prices have a major ripple effect on the economy, as they influence the costs of transportation, agriculture, mining, and other industries.
“If this drop in diesel prices is sustained, we could see a downward revision in inflation and price pressures,” he said.
Despite the potential savings for consumers, McTeague warns that the price drop may be short-lived, depending on the outcome of the upcoming federal election.
- If the Liberal government is re-elected, they plan to replace the consumer carbon tax with an industrial carbon tax, shifting the cost to refiners, who would likely pass the expense back to consumers.
- The Conservative Party, on the other hand, has pledged to eliminate the carbon tax entirely.
The federal election is expected to be called soon, with recent polls suggesting a tight race between the Liberals and Conservatives.
The federal government argues that carbon pricing is designed to reduce emissions, with revenues returned to Canadians through the Canada Carbon Rebate. However, McTeague contends that many households pay more in carbon taxes than they receive in rebates, especially middle-class families.
What’s Next?
If an election is called on March 22 or 23, it would trigger a minimum 37-day campaign period, meaning the carbon tax would be suspended for at least one month. Whether the relief continues beyond that will depend on who forms the next government.