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Fuel tax returning in Alberta on New Years Day

A nine cent per litre provincial gas tax takes effect New Year's Day in Alberta.
Gas Pump 2226
Brent Calver/OWW

A portion of the provincial fuel tax will be reinstated New Year's Day.

The UCP government announced that after pausing the tax a year ago, it will be bringing it back based on oil prices. Former Alberta premier Jason Kenney paused the fuel tax retroactively to Jan. 1, 2022 and it was extended again in June. However, the government said Tuesday the tax will be back in a matter of weeks.

“The provincial oil price-based fuel tax relief program will be reinstated on Jan. 1, which means Albertans will continue to save money at the pumps,” Minister of Finance Nate Horner said in a press release Dec. 19. “The program sets fuel tax rates quarterly based on the average price of West Texas Intermediate (WTI), with a rule limiting rate increases to a maximum of nine cents per litre each quarter.”

Nine cents per litre in fuel tax will be applied at gas pumps. The press release goes on to say the provincial fuel tax could be as high as 13 cents per litre in January, but has been reduced.

“As a result, Albertans will continue to save four cents per litre on gas and diesel in the first three months of 2024, with the fuel tax applied at a reduced rate of nine cents per litre,” Horner said. “After that, Albertans will save some or all of the provincial fuel tax when WTI prices average $80 per barrel or higher in each quarterly review period.”

The price of West Texas Crude on Dec. 19 was $73.44.

According to Gasbuddy.com, fuel prices in Athabasca, Westlock and Barrhead on Dec. 20 ranged between 112.4 and 119.9 per litre.

The NDP and Canadian Taxpayers Federation (CTF) are decrying the move to reinstate the fuel tax.

Alberta NDP Energy and Climate Critic Kathleen Ganley said in a press conference that it is the wrong time to bring back the fuel tax.

“The government ought to be focused on the fact that the majority of the population is struggling to meet their basic needs. That's what they should be doing with this resource revenue that belongs to all of us, it belongs to every one of us in Alberta and we should be using that to relieve the burden on families,” Ganley said.

The Canadian Taxpayers Federation released a statement calling for an extension of fuel tax relief in Alberta.

“Premier Danielle Smith did the right thing one year ago when she fully suspended the Alberta fuel tax because people are struggling with affordability so it’s mindboggling that she would hike the fuel tax back up now,” said Kris Sims, CTF Alberta director, in a statement. “With the Trudeau government hiking its federal carbon tax in a few weeks and with so many still people struggling to afford food and home heating, increasing the Alberta fuel tax is the wrong way for the Smith government to go.”

The CTF statement went on to say the fuel tax break saved mini-van drivers $10 per fill up and big rig drivers $130 every time they gassed up.

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