Prime Minister Mark Carney killed the consumer carbon levy as one of his first acts upon taking office earlier this month. As of April 1, the price everyday Canadians pay for emissions is to be set at $0.
Here is what consumers can expect:
What will Canadians save on fuel?
Patrick De Haan, head of petroleum analysis at GasBuddy.com, said Canadians should see a “pretty sizable rollback” in fuel prices within 24 hours of the retail carbon charge being removed.
As for whether that dip will be equivalent to the entire charge on gasoline that’s been in place since the price took effect in 2019, De Haan said “on paper it should.”
The current carbon price for each litre of gas is 17.6 cents.
However, there are many factors at play in the final pump price, including the cost of crude oil, U.S. tariffs and seasonal swings as stations transition to summer gasoline and refineries undergo routine maintenance.
“There are multiple ways that consumers may not fully realize the (entire) savings, depending on the energy market,” he said.
“But it’s safe to say that they’re going to see the bulk.”
What will you save on utilities?
Electricity bills aren’t covered by the retail fuel levy, but the cost for natural gas is about $4 per gigajoule.
So for a home that burns 10 gigajoules per month—typical use in Alberta—that would lead to an average $40 reduction on utility bills, said University of Calgary economist Blake Shaffer.
“That will be heavily skewed to winter and barely noticeable in the summer,” he said.
Enmax, the City of Calgary’s utility provider, says on its website that the charge will not apply to natural gas starting on April 1, but it will appear on upcoming bills until charges for gas used through March 31 are paid. Enbridge Gas, which distributes the fuel in Ontario and Quebec, had a similar online notice.
What to expect for food costs
It will likely take longer for any cost savings to filter through to consumers in the grocery aisle, and it’s unclear the degree to which they’d be reflected.
“There’s nothing immediate that’s going to take place on the shelves because those products are already purchased. Those products are already contracted. The cost of those are already absorbed on the shelf,” said Kevin Grier, a livestock, meat and grocery market analyst based in Guelph, Ont.
He expects that when grocery chains sit down to negotiate with their suppliers, the absence of the carbon price will play a role.
“I know darn well that if I was Sobeys or Metro or Loblaws, I would be saying, ‘Hey, you know what? You don’t have this carbon tax that you were complaining about last time. So let’s let’s see what let’s see what you can do for me.’”
How much of that consumers see and how soon is unclear, but Grier said, but “eventually in a competitive market, everything does get passed along.”
And what about the carbon rebate?
When the carbon levy was in effect, the government paid out a quarterly rebate to households to help offset the cost.
The final Canada Carbon Rebate is to be paid starting April 22 for those who have filed their 2024 tax returns before April 2. For those filing after that date, the rebate will be sent after their returns are assessed.
The payout differed between provinces, with the highest at $456 each quarter for a family of four in Alberta.
Rebates are also to end for small businesses as of the 2024-25 fuel charge year, as is a tax credit for farmers to offset the cost of pollution.
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