Carbon tax lift unlikely to bring record pump pain
The 1.1 cent per litre increase in B.C.'s carbon tax as of Canada Day isn't expected to push Metro Vancouver gasoline prices into record territory.
Gas prices in the region averaged $1.39 per litre as of Thursday, before the final lift in the carbon tax to 6.67 cents a litre.
Gasbuddy.com founder Jason Toews said the bump could take average prices here back over $1.40, but not likely above the 2008 record of nearly $1.50 or this year's late May peak of $1.489.
"I think that's going to be the peak for the year unless we see some major refinery issues," he said.
Prices have trended lower this spring as crude oil prices dropped on a sagging world economy and, more importantly, as three west coast refineries came back on line after previous shutdowns constricted supply.
Higher demand from the summer driving season has kept gas prices from falling too far yet, Toews said, but he expects significantly lower pump prices by the fall if all else stays equal.
"We should see gas prices get much cheaper," he said. "I think we could see the return of $1.20-something gas."
The last scheduled increase in the carbon tax comes as the provincial government asks for public input on the future of the tax ahead of 2013 budget deliberations.
Up for debate is whether the tax should be reduced or rise further, whether any further increases should continue to go to tax relief or be redirected to fund carbon reduction initiatives such as transit.
The Canadian Taxpayers Federation is calling for the carbon tax to be eliminated entirely, adding many of the offsetting tax cuts are geared to business and don't benefit ordinary consumers.
CTF spokesman Jordan Bateman listed tax breaks for industrial property owners, interactive digital media ventures, scientific research and the film industry.
"The quickest way to save taxpayers money is for B.C. to scrap the carbon tax," he said.
The carbon tax also applies to other carbon-releasing fossil fuels, including diesel, natural gas, coal and propane.
The Pembina Institute, which backs a higher carbon tax, issued its own report June 25, arguing the measure has been positive for B.C.
It surveyed a cross-section of business, academic and government leaders, and found a majority concluded there was no significant downside so far. They were split, however, on whether the carbon tax should continue to climb when no other North American jurisdictions have imposed any similar tax.
|Vancouver Historical Gas Price Charts Provided by GasBuddy.com|