Braid: UCP goes ahead with fuel tax hike despite federal increase, high inflation

The UCP of 2024 is more concerned with overall finances than rising costs for Albertans

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The post-election UCP no longer seems to care so much about your cost-of-living problems.

On Thursday, we learned that Alberta’s inflation rate is by far the country’s highest, at 4.2 per cent.

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The UCP marked that fact by making it worse.

The government announced that the provincial gasoline tax will go up four cents per litre, starting April 1.

This coincides with Ottawa’s latest carbon tax hike, which will also add four cents per litre at the same April Fool’s moment.

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The UCP of 2024 is more concerned with overall finances than rising costs for Albertans.

Before the election, and even afterward, they couldn’t do enough. Fuel tax was suspended entirely for 2023.

Now, with the four-cent hike, the full 13-cent-per-litre tax is back.

Expect no sympathy from anywhere else in Canada. Inflation is tamed in most provinces.

B.C. has 2.6 per cent inflation, Saskatchewan 1.7 per cent, Ontario 2.4 per cent.

In Manitoba it’s less than one per cent. The Atlantic provinces are also very low.

Canada is in the range of the two per cent official target for inflation.

The national crisis is over — except in Alberta. And the one government that can help piles on more expense.

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The UCP had a clear choice here. It could have paused the four-cent increase in recognition of both the federal tax increase and the inflation bump.

The UCP’s formal policy says there’s supposed to be gasoline tax relief if crude oil tops $80 per barrel.

The WTI price was running above $80 Thursday.

Why raise the tax in these conditions?

Finance Minister Nate Horner makes his case, although he isn’t having a very good day.

He says the average price in this quarter was $78, not quite high enough to trigger relief.

“Look, I don’t enjoy taxing people for anything,” the minister said in an interview.

“But in this chair, you understand the dedicated revenue from the fuel tax and what it means. It’s the only reason we’re able to put forward a balanced budget.”

Horner doesn’t discount inflation as a serious worry. But he says that if housing and rent costs were stripped out, Alberta’s rate would be only 1.3 per cent.

He also hopes people don’t lump Alberta’s fuel levy with the federal one.

Alberta taxes gasoline and diesel to build roads, he said, but “the federal tax is just meant to make fuel more expensive in a punitive way. They want you driving less.”

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Alberta Finance Minister Nate Horner
Alberta Finance Minister Nate Horner. David Bloom/Postmedia

Federal fuel levies total about 35 cents per litre, nearly three times Alberta’s tax.

Horner says the province’s fuel tax relief of 2022 and 2023 saved motorists $2 billion.

Obviously, that cost the provincial treasury the same amount. Now, Horner wants the money back — to help us all, he said.

“In 2024-25, fuel tax revenue is forecast at $1.4 billion, which will help fund everything from better roads to improved health care and more supports in the classroom.”

He argues that we don’t have much of a gasoline price problem anyway.

“Albertans will continue to pay some of the lowest fuel prices in the country even after the fuel tax rate takes effect,” he said in an emailed statement.

“As of mid-March, gas prices in Alberta remained 11 cents below the national average and were a full 22 cents lower than when we first announced the fuel tax relief program in March 2022.”

Deerfoot Trail
Deerfoot Trail in Calgary on Monday, January 11, 2021. Darren Makowichuk/Postmedia

Horner worries that the tax relief policy could lose support if it’s seen as political.

It sure looked entirely political in the election year of 2023.

“If it becomes a political hot potato and people can’t understand why it comes on and cuts off, I guess other things would have to be considered,” Horner said.

And whose fault would that be?

Don Braid’s column appears regularly in the Calgary Herald

X: @DonBraid

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