Holt Liberals under pressure over election gas-price promise

Premier Susan Holt's government finds itself in a dilemma after gasoline distributors and retailers warned that a key Liberal affordability promise could drive them out of business.

Business owners warned a committee of New Brunswick MLAs that a bill to repeal the so-called "cost of carbon adjustor" would force those costs onto their books, putting their viability at risk.

"We are held hostage because of this situation," Peter Clark, the owner of Woodstock-based Clark Oil, told the legislature's law amendments committee.

"We are an essential service. There'd be no food on the table, there'd be no construction, there'd be no nothing without us delivering. We are not big oil. You're not getting at big oil here." 

Nadine Hébert, the vice-president of Shoreline Fuels, said repealing the adjustor could lead her company to park its delivery trucks immediately.

Chris Scholten, the president of Scholten's Convenience Stores, said forcing retailers to absorb the carbon cost — set at 7.1 cents per litre of gas this week — would lead to them losing money on every fill-up. 

"Under this Bill 4, it's suggesting that we should be absorbing a loss for the sale. [It's] a privilege to sell gasoline, apparently," Scholten said.

WATCH | Supporters, critics weigh in on controversial gas charge:

Holt government in dilemma over promise to repeal ‘cost of carbon’ charge

6 hours ago

Duration 2:19

The governing Liberals find themselves stuck between an election promise and concerns from gasoline retailers as they decide whether to follow through on removing a Higgs-era fuel charge. 

"How do we continue to cover ever-increasing costs when we're being held back on any ability to recoup said costs? Where does it end?"

But committee member Jacques LeBlanc, the Liberal MLA for Shediac-Cap-Acadie, pointed out that the government is hearing from New Brunswickers struggling to cope with higher costs.

"People are being pinched everywhere," he said.

"You understand that we also hear it from that side also. This is important to understand. People need to be heard but also, we need to take action to make sure people are getting a better dollar value for what they pay for."

The clause, adopted by Blaine Higgs's Progressive Conservative government in 2022, requires the Energy and Utilities Board to pass on the cost of federal clean fuel regulations from producers to consumers via the weekly price setting for gasoline.

The regulations are intended to create financial incentives for producers to produce fuel with lower greenhouse gas emissions.

But in last year's election Holt said forcing distributors and retailers to pass on the cost to consumers amounted to a tax that she promised to repeal.

The Liberals introduced a bill to do that last fall, but after lobbying by the Convenience Industry Council of Canada and other organizations, they halted debate and sent the bill to the committee for hearings.

Bill Hogan, a PC MLA, said Tuesday that it was a mistake for Holt to commit to repealing the clause without considering the impact on small businesses. 

"Perhaps they had not fully considered all the ramifications to removing the carbon adjustor," he said.

"I think it sounded good to call it the 'Higgs tax.' … I think it sounded good to say, 'Let's take 4.3 cents a litre off the price of gas.'"

LeBlanc told reporters that it was too early to say what the committee would recommend after the day of hearings.

"Our intention is to move this bill forward, and there's a process," he said, including a debate in the legislature that could include "possibly some amendments" 

"We were elected on a promise that people needed for more affordability measures, so we're looking at all points of view," he said. "We'll take all that into consideration." 

Moe Qureshi of the Conservation Council of New Brunswick said it's impossible to know whether the carbon adjustor amount truly reflects the cost of the federal regulations to producers.

He said the Energy and Utilities Board should have the power to investigate the real cost and pass that on directly to producers. 

"A lot of these costs should be paid by the polluter," he told MLAs.

"It's not the consumers' responsibility to clean up the fuel. It's industry's responsibility to clean up the fuel."  

The adjustor should be repealed and replaced with a more stringent carbon tax on industry, he said.