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What is the carbon tax?

This tax is applied to fuels such as gasoline, diesel, natural gas and propane. It also impacts electricity rates as carbon pricing is applied to natural gas-fired electricity generation.

While Ontarians won’t get much of a reprieve from their home-heating bill, as the tax is being removed at the end of the winter season, drivers will notice an immediate price drop at the pumps.

Price drop at the gas pump

Drivers currently pay a carbon tax of 17.61 cents per litre of gasoline and 21.39 cents per litre of diesel — both figures had been scheduled to increase April 1 — but the price decrease will be even greater than that, points out Dan McTeague, president of Canadians for Affordable Energy.

That’s because there’s a tax on the tax as we pay an HST on the above carbon pricing.

The actual price drop at the pump will be around 20 cents per litre on gasoline and close to 25 cents on diesel.

If on March 31 gasoline prices are $1.50 per litre, drivers can expect them to be $1.30 on April 1, McTeague said.

Eligible Canadians are still slated to receive the Canada Carbon Rebate (carbon tax rebate) in mid-April.

Questions remain

There are questions about what happens to the tax following the federal election and what the next federal government will do.

McTeague points out the legislation that led to the carbon tax’s creation remains in place and if the consumer price index is simply shifted to an industrial carbon tax, businesses will pass those costs to consumers anyway.

“You’ll get this carbon tax right back at you but in a hidden fashion, with no rebate,” he said.

Carney has not signalled an end to industrial carbon pricing for large emitters.

The , an industrial carbon tax that remains in place, is estimated to increase the price of gasoline by 17 cents per litre and diesel by 16 cents per litre when fully implemented in 2030.

The intention of this tax is to force fuel producers and importers to reduce the carbon content of the fuels they sell.

The consumer carbon tax, which Carney is removing starting April 1, was expected to increase the price of gasoline by about 37 cents per litre when fully implemented in 2030.