By Chris Brown

Alberta to stop collecting provincial fuel tax, will offer electricity rebate

Mar 7, 2022 | 1:10 PM

Premier Jason Kenney says the province will stop collecting the provincial fuel tax when oil prices reach $90 per barrel to provide Albertans with relief from the sky-high prices at the gas pump.

“This means the price at the pump will drop by 13 cents a litre,” Kenney said Monday afternoon. “This will apply to gasoline and diesel, including marked fuel.”

The current marked fuel tax is four cents per litre of gas.

Kenney said prices have risen by close to 20 per cent in the past month. Gas was priced at $1.33.9 per litre in Medicine Hat in early February. The Gas Buddy app shows prices averaging $1.57.9 on Monday.

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He said relief is “urgently needed, right now.”

The relief is based on a sliding scale for oil prices.

The premier said when the price of West Texas Intermediate (WTI) is over $90 per barrel, the fuel tax will be removed completely. When the price is below $80 the fuel tax will be in full effect.

The price of WTI is hovering close to $120 per barrel on Monday.

The premier also announced relief for families and small businesses.

Alberta families who have consumed less than 250 megawatts of electricity will get a $150 rebate on their electricity bills. Kenney says the vast majority of Alberta households will qualify.

Small businesses will get the same rebate based on the same usage figure. The rebates will come in three $50 rebates applied to bills from January, February and March.

Most houses, farms and small businesses in the province are expected to be eligible, said Dale Nally, associate minister of natural gas and electricity. He said new legislation will be tabled this spring to quickly enable the program.

Relief on April 1

Kenney says scaling the fuel tax relief based on oil prices, to which Alberta’s revenues are strongly tied, protects the province’s fiscal health.

The change will take effect on April 1, the same day the federal carbon tax will rise $10 per tonne of industrial greenhouse gas emissions. That will translate to about 11 cents per litre of gas at the pump.

Kenney said the government will closely watch gas stations to ensure the savings are being passed on to consumers.

The province will review the collection of the fuel tax each quarter and could reintroduce it in stages. Collection will not begin again before July 1.

“Albertans told us they needed relief from rising costs, we heard them loud and clear. And that’s why today we are taking this bold action to soften the role of inflation, especially on the cost of energy,” said Kenney.