Alberta set to reinstate fuel tax as consumers call for a financial reprieve

The new year will bring some new charges at the pumps for Albertans.

Beginning on Jan. 1, the UCP government will reintroduce nine cents of the provincial fuel tax per litre back to consumers.

The full tax – which was paused in April 2022 by then-Premier Jason Kenney – is 13 cents per litre.

It'll be a tough pill to swallow for drivers, with many already struggling with Calgary's country-high cost of basic living.

"The government ought to be focused on the fact that the majority of the population is struggling to meet their basic needs," NDP MLA Kathleen Ganley said Thursday.

"That's what they should be doing with this resource revenue that belongs to all of us. We should be using that to relieve the burden on families."

• Get local, live and breaking news right to your email inbox. Sign up for our daily newsletter

Alberta's inflation rate has been heading in one direction as of late, and driving has already become more expensive under the UCP's auto insurance changes.

Some question why more financial help isn't trickling down as the province gets set to post of surplus of $5.5 billion in the 2023-2024 fiscal year.

But more consumer-friendly support hasn't been announced.

Instead, the province is trying to frame the fuel tax exemption partially ending as a new pocketbook positive.

"Albertans will save at least four cents per litre in provincial fuel tax," press secretary Savannah Johannsen wrote to CTV News.

"Alberta’s government will continue to revisit the fuel tax rate quarterly and adjust it based on the price of WTI (West Texas Intermediate)."

The new program will remove the full 13 cents again if WTI averages above $90 USD. If the barrel price averages between $85 USD and $89.99 USD, the tax will be set at 4.5 cents per litre. If WTI averages between $80 USD and $84.99 USD, Albertans will pay nine cents per litre.

Any price below $80 USD means the levy will be fully reinstated.

On Wednesday, WTI sat just under $71 USD.

"I don't know that history is going to look kindly on this, but I get the politics," economist Moshe Lander told CTV News. "I don't think the Alberta government has made a compelling argument for why that tax needs to be in place, and why the tax needs to be higher."

Lander says he understands the pushback but believes higher prices at the pumps – if properly navigated – could be good for Alberta in the long term.

He says the province can either use the collected tax to push drivers towards eco-friendly electric vehicles, or consumers can see the increase as a way to use alternatives like ride-sharing and public transport.

As for the messaging: Lander believes it's all off. He warns Albertans not to let the province blame the incoming pump increase on Ottawa's carbon tax.

"They'll always blame the feds," he said. "Unless they're doing exactly what the government (here) thinks is right, it's all Ottawa's fault."