Many gas stations throughout Red Deer currently have their gas price set at $1.54.9 cents per litre, including this Fas Gas in south Red Deer. (rdnewsNOW)

By rdnewsNOW Staff

Temporary Fuel Tax Removal

Province announces relief for fuel and utility costs

Mar 7, 2022 | 2:50 PM

Albertans will see lower fuel and utility bills through action to address rising costs.

Alberta’s government will stop the collection of the provincial fuel tax to offer Albertans relief from current high fuel prices. Currently, Albertans pay 13 cents per litre in fuel tax. This change will come into effect April 1.

However, UCP officials say the federal carbon tax rate on gasoline is set to increase again on April 1, from just under nine cents per litre to just over 11 cents per litre.

“We’ve heard Albertans’ concerns about the rising cost of living loud and clear,” said Permier Jason Kenney on Monday. “While the federal government is set to increase the carbon tax April 1, Alberta’s government is taking the opposite approach and stepping up to offer relief. Stopping the provincial fuel tax puts money back in the pockets of Albertans when they need it most.”

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“Many Albertans expressed concerns about increasing prices on everyday goods when I consulted with them ahead of this year’s budget,” added Travis Toews, President of Treasury Board and Minister of Finance. “The best thing government can do during inflationary times is to spend less, borrow less and tax less. That’s why today we are introducing new measures to help with the cost of fuel by reducing the provincial fuel tax, providing much-needed relief to everyday Albertans.”

Officials say Alberta’s government will also provide $150 electricity rebates to help Albertans pay for the high bills they faced this winter. More than one million homes, farms and businesses are expected to receive a $50 monthly rebate for three months. These retroactive rebates will help defray the high costs that many families and businesses paid in recent months.

Alberta’s government says it will work with utilities and regulators to determine exact details, including rebate timing. This includes working to have the rebates applied directly to consumers’ bills.

This rebate will combine with the Natural Gas Rebate program announced in Budget 2022 to provide relief for Albertans.

“Utility prices are in part due to market conditions, and in part due to punishing policies from the former provincial government and the federal government,” suggested Dale Nally, Associate Minister of Natural Gas and Electricity. “As our government works hard to responsibly manage system costs, we are also working tirelessly to increase generation investments to bring new supply on to the market. As this long-term work continues, a rebate to help offset these costs for Alberta families and small businesses will help provide support when they need it most.”

Collection of the fuel tax will be paused for:

• gasoline – $0.13 per litre
• diesel – $0.13 per litre
• marked gasoline and marked diesel – $0.04

Because the GST also applies to provincial fuel taxes, the 13-cent reduction will also reduce the GST by 0.65 cents per litre, for a total tax savings of about 13.6 cents per litre of gasoline and diesel.

Officials say the government will review the collection of the fuel tax on a quarterly basis and, if required, consider reinstating collection in stages, based on the average price of West Texas Intermediate (WTI) over a number of weeks. The government will not start to reinstate collection before July 1.

Alberta’s fuel tax is said to be reported and remitted by refiners and large wholesalers and included in the price Albertans pay at the pump. The government is expected to provide information for stakeholders, including fuel retailers, on the fuel tax pause.

“Albertans are struggling right now. The cost of everything is going up, and many of these rising costs are a direct result of UCP policy. The UCP’s latest plan falls well short of what’s needed and Albertans will continue to struggle with basic costs,” said NDP energy Critic Kathleen Ganley.

“Premier Jason Kenney needs to do his job, listen to Albertans, and follow through on the promises he’s made to them,” added Ganley. “Enough with these fake rebates that will never help Albertans.”

The Canadian Taxpayers Federation is applauding the government’s decision to pause the provincial fuel tax while oil prices are soaring.

“The Kenney government has stepped up to the plate to help taxpayers who are struggling with record gas prices,” said Kevin Lacey, Alberta Director, CTF. “Eliminating the provincial gas tax is a great way to give taxpayers a break.”

The organization says gasoline prices include 10 cents a litre in federal gas tax, 13 cent provincial gas tax, five per cent GST and 8.8 cent carbon tax. At today’s prices, the CTF says taxes make up approximately 41 cents of the pump price or about 25 per cent.

“Premier Jason Kenney has made the first move and now the ball is in Prime Minister Justin Trudeau’s court to do the right thing and cut the carbon tax to protect taxpayers,” said Lacey.

The CTF says this gas tax cut will save a family $9.52 on every fill up of a 70-litre sedan.