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Increasing the gas tax is a bad move for Albertans and the economy

By Franco Terrazzano
and Kris Sims

Alberta Premier Danielle Smith has talked a good game defending Albertans against Ottawa’s carbon taxes.

But she’s about to get outflanked by New Democrats if she doesn’t keep her fuel tax suspension going.

Last year, the Alberta government suspended its provincial fuel tax, saving drivers 13 cents per litre at the pumps. That saved families about $10 every time they filled up their minivans and truckers about $140 when they filled their big rigs.

Franco Terrazzano

Franco Terrazzano


Kris Sims

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Suspending the fuel tax was the right thing to do. But Smith will soon hike her fuel tax to nine cents per litre.

That would be a bad move, politically and economically.

“Affordability is the primary concern of Albertans and all Canadians,” Smith wrote to Prime Minister Justin Trudeau last year. “Elimination of the carbon tax entirely, along with temporarily pausing federal fuel taxes, would assist millions of Canadians.”

Smith’s tough talk against Trudeau was spot on. But the one thing immediately within Smith’s control to make life more affordable is to refuse to hike her fuel tax.

Alberta’s New Democrats are against the fuel tax hike.

“I don’t believe that the affordability crisis has abated,” Rachel Notley, Alberta’s NDP leader, said. “I would argue that it’s gotten worse. So, this is not the time for them to [raise fuel taxes].”

The NDP government in Manitoba is suspending its 14 cents per litre fuel tax in the New Year.

“You work hard for every dollar, but inflation hurts,” said Manitoba Premier Wab Kinew. “That’s why a Manitoba NDP government will save you 14 cents a litre every time you fill up. It’s one important step we can take to make life more affordable for families.”

The Liberals in Newfoundland and Labrador extended their eight cents per litre gas tax cut until the end of March 2024. Ontario’s Progressive Conservatives are extending gas tax cuts through June of next year.

Albertans don’t want to pay higher taxes at the pump. The Alberta NDP opposes gas tax hikes. NDP and Liberal premiers are providing relief. And Smith and her United Conservatives recently boasted about the “Alberta Advantage” at the pumps and the province having the “most affordable fuel in Canada.”

It makes you wonder: are paper pushers in the bureaucracy giving Smith bad advice?

Economically, the gas tax hike makes even less sense.

The Alberta government suspended its fuel tax in 2022 – amidst 40-year high inflation – to provide much-needed relief. Prices are rising slower than they were last year. But that doesn’t mean life is more affordable. A quick trip to the grocery store proves prices are still way up.

Even more dumbfounding: Smith’s government is projecting a $5.5 billion budget surplus. It’s not like the government is so strapped for cash that it needs to take more money from Albertans struggling to make ends meet.

If Alberta’s politicians were truly committed to the gospel according to Hayek, they should look for savings instead of hiking taxes. Prime example: don’t jet to a global climate conference in Dubai with more than 100 Alberta delegates. While we don’t know who took the trip on the taxpayer dime (yet), it’s a good bet this will come with a hefty price tag.

Here’s another tip for saving money: Alberta Health Services doesn’t need to hire social media “influencers.”

Here are the key takeaways:

Albertans are still struggling with inflation. There is no political pressure for Smith to raise gas taxes. The government doesn’t need extra cash. Smith is right to bash Trudeau’s carbon taxes for making life more expensive.

The solution for Smith is simple: shield Albertans from rising costs and don’t raise gas taxes.

Franco Terrazzano is the Federal Director, and Kris Sims is the Alberta Director, of the Canadian Taxpayers Federation.

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The opinions expressed by our columnists and contributors are theirs alone and do not inherently or expressly reflect the views of our publication.

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