Federal Carbon Tax Goes Unnoticed as Gas prices fall According to CAA Gas Price Tracker
As we all know on April 1, 2109 the new carbon tax was implemented in Canada to help fight global warming as part of Canada’s participation to fight climate change. There have been 40 countries that have a carbon tax scheme now and global warming is still continuing even though there are claims that this tax is the best way to fight climate change. A carbon tax is a form of pollution tax and it is used to promote conservation in theory. Pollution taxes are often grouped with two other economic policy instruments: tradable pollution permits/credits (cap and trade) and subsidies. Critics also see this tax as just a tax grab that will go into general revenues as there is no info on what the taxes will be used for.
Taxes are 27 cents a litre before the carbon tax already and prices fluctuate daily as oil prices are based on the commodity price market that are influenced by supply & demand and geopolitical events. The federal government’s new carbon tax is 4.42 cents per litre, plus HST and will increase each year up to 11.05 cents per litre in 2022.
This strategy while it looks good on paper and will hopefully lower carbon emissions, but with a society so dependent on cars for transportation, the automobile will be around a long time. This is a global problem, for example China’s automobile sales is now larger than the USA . New cars sales in China was 10.3 million in 2009 and was 23.7 million in 2018. The amount of cars on the road are the most we have ever been. The biggest culprit for global warming are coal powered plants that contribute 40% of the worlds carbon and 5 of the top 10 of the world’s biggest plants are in China, three in South Korea, one in Taiwan and Poland. Canada is phasing out coal plants. But is the carbon tax going shut these down in other countries? Air Pollution in China is so bad now that they are happy to see a sunny day in some cities as air masks are used to breathe.
Since the carbon tax was implemented gas prices went down as the market it seems has accounted for the tax in the price of oil. The CAA gas price tracker shows gas prices have dropped on average nationally to $1.14 /litre from $1.30 last year. The whole idea for a carbon tax is it will be a financial incentive to conserve, but what has happened gas prices dropped. It looks like in the short term the carbon tax will be ineffective and the price of oil is expected to stay down during the summer driving season, but the market is subject to disruption as we all know. The conflicts in the middle east will put pressure on markets to drive oil prices up if there is no government intervention to protect consumers from these price spikes. But that will take real guts to do and we all know that is lacking in today’s politics.