Gas prices tumble across B.C. after carbon tax lifted in late-night legislative session

Gas prices across B.C. have seen a sharp decline after the consumer carbon tax was lifted in the early hours of April 1.

B.C. was the first jurisdiction in North America to introduce widespread carbon pricing through a consumer tax in 2008. The policy was popular for years, surviving left- and right-leaning governments.

But Premier David Eby says it became "toxic," following years of "axe the tax" campaigning from both federal and provincial Conservatives, and he vowed to do away with it once the federal government introduced the means to do so.  (Notably, the first party to use the "axe the tax" campaign was the B.C. NDP, after the carbon tax was introduced by the governing B.C. Liberals in 2008). 

It all came to a head in a late-night legislative session that started Monday and stretched into Tuesday morning as third and final reading of the bill was passed.

Eby said he expected gas prices to fall by about 17 cents a litre Tuesday, and though it took some time, by mid-morning it had happened, according to online gas pricing aggregates like Gas Buddy and Gas Wizard.

Prices shown on the sites as of 11 a.m. PT range from as low as $1.32 at a station in Penticton to $1.77 in North Vancouver.

Meanwhile, FortisB.C., which provides home heating through natural gas, said they expect a price drop of 23 per cent, or just under $30 a month for the average home bill.

Seasonal fluctuations, refinery fire keep prices up

Some consumers had noted a spike in prices in the days leading up to the repeal of the carbon tax, and Eby says the province's utilities commission has the authority to uncover price gouging.

In an interview with CBC's The Early Edition, B.C. Utilities Commission chair and CEO Mark Jaccard noted that prices for gas fluctuate seasonally due to changes in refinery production.

WATCH | Are gas prices actually dropping?: 

How will gas prices be affected by the end of the consumer carbon tax?

22 days ago

Duration 3:22

After 17 years of B.C.'s consumer carbon tax, the provincial government has passed legislation to scrap it. This comes after a marathon debate in the legislature that went into the early hours of this morning. Premier David Eby says drivers in B.C. will be seeing relief at the gas pump. CBC’s Jessica Cheung went to a gas station to find out what the move means for consumers.

"[Prices] go up as we head toward the summer as refineries switch from making less heating oil and more gasoline ... so those kind of prices fluctuate over the year," he said, adding the commission will monitor the market to determine whether gas companies are passing on savings from the removal of the tax to customers. 

In an interview with the Canadian Press, GasBuddy's Patrick De Haan noted that a refinery fire in northern California had pinched the market all along the west coasts of Canada and the United States.

"Unfortunately, there are some abnormal circumstances happening there," he said. 

What about the environment?

Some analysts were critical of the decision to remove the tax: Ross Hickey, a UBC Okanagan economist, called the decision "foolish," saying putting a price on carbon made sense for people's wallets and for the environment.

"I was hoping it would be an April Fool's joke," he told BC Today host Michelle Eliot.

He said the brunt of the tax was borne by higher-income households, and it helped lower-income residents in the form of rebates that exceeded the amount they paid.

Hickey said the tax had remained quite popular, helping B.C. move toward more environmentally friendly choices, until it became an issue at the federal level.

WATCH | Hickey lays out the case for a consumer carbon tax: 

Axing the carbon tax a 'foolish move,' says UBC economist

22 days ago

Duration 2:54

"Never try to solve an income problem with prices," says UBC Okanagan economist Ross Hickey. He says the affordability crisis is more of an income than a price problem and tells BC Today host Michelle Eliot that higher-income households carried most of the burden of the carbon tax, while lower-income consumers got rebates that exceeded the amount they paid.

"We're gonna throw away a great tax that was going to help future generations all because of a slogan (Axe the Tax)?"

"Honestly, it's pathetic," he said.

The tax's elimination will also affect the provincial budget, as it was expected to generate about $1.8 billion in revenue in the upcoming year. 

As a result, the province is now looking for savings, which could include scrapping its electric vehicle rebate incentive program.

Eby has said that moving forward, B.C. will focus its climate efforts on targeting industrial emitters and encouraging the adoption of low-carbon technology.

In the limited legislative debate around the repeal, the Conservative Party of B.C. focused on the short timeline to discuss the change and called on the province to commit to not hampering industry through any other punitive pricing around carbon.

Meanwhile, the B.C. Greens say they worry about the effect on environmental efforts and lower earners. 

B.C. Green Leader Jeremy Valeriote said he wants to know how government intends to resolve issues, including the end of the climate action tax rebate that B.C. residents had come to expect on a quarterly basis and the significant financial shortfall the end of the tax leaves for the province, estimated to be about $1.5 billion.

"We don't consider that meeting the convenience of fuel producers or aligning with other provinces is sufficient grounds for urgency," Valeriote told the legislature.