TERRAZZANO: Canadians need a break from Trudeau’s gas taxes

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Canadians need a break from Prime Minister Justin Trudeau’s soaring gas taxes. 

The federal government makes you pay a federal fuel tax, a carbon tax, a second carbon tax, and a sales tax every time you fuel up. In total, federal gas taxes add about 35 cents per litre to the pump price. That’s more than $20 to fuel up a sedan.

When you add in all the provincial (and sometimes municipal) gas taxes, the total government take can be up to 45% of the pump price. 

To add insult to injury, the federal government and all six provinces east of Manitoba charge their sales taxes on top of their other taxes. This tax-on-tax adds about $2.90, on average, to the cost of fueling up a sedan. If you fill up that car once a week, you’re paying about $150 every year just because of the tax-on-tax.

In fact, the GST charged on top of the carbon tax will cost Canadians almost $600 million this year. By the end of 2030, this tax-on-tax alone will have cost Canadians a total of $6.2 billion. 

And that big tax bill at the pumps is only getting bigger, courtesy of Trudeau’s carbon tax hikes. 

Trudeau’s carbon tax currently costs 17 cents per litre of gas. Trudeau plans to crank up his carbon tax to 37 cents per litre of gas by 2030. And the federal government won’t rule out future carbon tax hikes after 2030. 

Ottawa also imposed a second carbon tax through fuel regulations last summer. When those fuel regulations are fully implemented in 2030, they will add up to 17 cents per litre to the price of gas. There are no rebates with the second carbon tax and it’s being layered on top of the original tax.

That means in 2030, Trudeau’s two carbon taxes will add up to 54 cents per litre to price of gas. 

Fuel taxes hurt Canadians even beyond the price at the pumps. 

The carbon tax on natural gas will cost the average Canadian family about $300 this year to keep their heat on. 

By making it more expensive for farmers to produce food and truckers to deliver food, the carbon tax makes it more expensive for Canadians to buy food.

The big rig truck driver that delivers groceries to the store pays about $330 in federal taxes every fuel up. The carbon tax on propane and natural gas will cost Canadian farmers $1 billion by 2030.

Outside of Ottawa, politicians of all political stripes are providing relief. 

Manitoba’s New Democrats suspended their 14 cents per litre provincial fuel tax for at least nine months. 

The Liberals in Newfoundland and Labrador cut the provincial fuel tax by eight cents per litre back in June 2022. That relief will be in place until at least April 2025. 

Ontario’s Progressive Conservative government cut its fuel tax by six cents per litre in July 2022, and the relief will stay until at least the end of this year. The average two-car Ontario family has already saved more than $700 since the tax cut took effect.

Alberta’s Conservative government suspended its fuel tax for more than a year and a half. Even British Columbia’s NDP government paused its carbon tax hike during the pandemic. 

The United Kingdom, Sweden, Australia, South Korea, the Netherlands, Germany, Norway, India, Ireland, Israel, Italy, New Zealand, Portugal, among other countries have also cut fuel taxes in recent years. 

Trudeau could make life more affordable today. All he needs to do is stop charging taxpayers so much at the pumps. 

Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation