As fuel prices continue to rise, there are growing calls for the Canadian government to put a freeze on the implementation of the carbon tax set to go into effect as of April 1. The planned increase will raise the federal carbon tax by 2.2 cents, pushing the total carbon tax to 11 cents a litre. According to industry experts, gas prices are expected to reach $2.20 in the summer
The Canadian Federation of Independent Business (CFIB) has reported that the price of fuel has become the biggest cost concern for an estimated 64% of small businesses. They are amongst those asking the federal government to freeze the carbon tax as many of their members feel unable to absorb further cost increases.
CFIB reported that only a third of small businesses have managed to regain pre-pandemic sales levels and pay down their debts. They noted that now was not the time to add more expense to struggling businesses. The federation is also recommending a pause to other upcoming tax increases including those on the alcohol excise tax, employment insurance premiums and Canada Pension Plan.
Alberta Premier, Jason Kenney, has added to the dissenting voices opposed to the fuel tax increase. To help Albertans cope with this rising cost, he has announced the temporary suspension of provincial fuel taxes on diesel and gasoline from April 1. Kenney has termed this a reverse carbon tax and continued to criticise PM Trudeau’s plans to go forward with the federal fuel tax increase. Another relief measure from the provincial government will be to provide electricity rebates of $150 to about one million farms, homes and businesses.
Ontario’s Premier Doug Ford is also calling on the federal government to pause or scrap the increase so that any measure they have taken to lower gas taxes will not be wiped out by the federal tax increases. Upon taking office in 2018, Ford did cancel the province’s cap and trade greenhouse gas emissions reduction system which he claimed would lower gas prices by 4.3 cents. This action however led to the imposition of the federal carbon tax. He is expected to try and lower gas prices further by reducing the provincial fuel excise tax by about 5.7 cents per litre, by the end of April.
British Columbia’s Premier, John Horgan, is however taking a different position on the issue and attributes the rising fuel costs to volatility in the international market and the Russian invasion. He has confirmed that a freeze on carbon tax increases or capping gas prices will not be options in curtailing rising gas prices.
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