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The consumer carbon tax is gone as of today. What will that mean for your wallet?

The consumer carbon tax is gone as of today. What will that mean for your wallet?

CBC
Tuesday, April 1, 2025 12:27 PM GMT

It's official — the consumer carbon tax is over, starting today. 

Mark Carney cancelled the fee on his first day as prime minister last month, signing a directive for the fuel charge to be removed on April 1. The levy had been added to the sale price of carbon-emitting products by fuel type. For gasoline, it was 17.6 cents a litre, and natural gas was 15.25 cents per cubic metre. (The average Canadian home uses about 2,500 cubic metres of natural gas a year.)

Carney initially supported the carbon tax, but reversed course while campaigning for Liberal Party leadership, saying it had become too "divisive." Though the consumer price on carbon is gone, the industrial price for large-scale polluters remains.

The Liberal government under Justin Trudeau first put the tax in place in 2019 as a way to incentivize Canadians to transition to greener energy sources. But even in the early days, the policy faced opposition from provincial governments, while Conservative Leader Pierre Poilievre's pledge to "axe the tax" later became a central part of his platform. 

The federal carbon price for consumers will disappear today in all provinces except Quebec, where a provincial price on carbon meant the federal price didn't apply. B.C. also had its own consumer carbon tax, but it hurried Monday to get rid of it for April 1, as well.

Now that the tax is gone, how might that impact your wallet? Experts say there will be some cost savings passed on to consumers almost immediately, but the loss of the carbon rebate will also have an impact further down the road.

Andrew Leach, an energy and environmental economist at the University of Alberta, says the cancelled tax will be felt most immediately at the gas pump. 

The price on pollution for gasoline translated to a cost of about 17.6 cents per litre up until today. Leach says it's likely that amount will come off within a matter of days.

"It is a point-of-sale charge … so you should see it come off almost instantly," Leach said.

Christopher Ragan, director of the Max Bell School of Public Policy at McGill University, says the drop in prices could be more gradual, though he agrees it is coming.

"One of the less charming attributes of capitalism is that prices tend to fall more slowly than they rise," Ragan said. "So it might take a little while for that 17.6 cents to drop off the price."

If gas prices dropped by 17.6 cents a litre as a result of the tax coming off, you'd save about $8.80 when filling a car with a standard 50-litre gas tank.

Depending on how oil markets increase or decrease in coming days or weeks will determine whether or not gas prices remain low, Leach adds.

And because natural gas and other home heating costs are billed monthly, the removal of the carbon tax will take a bit longer to be felt there, according to Leach. 

Read full story on CBC
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