Alberta has opted to maintain its fuel tax for the time being, despite Prime Minister Mark Carney’s recent federal measures aimed at easing the burden on Canadians at the gas pumps. Finance Minister Nate Horner expressed support for the federal initiatives but highlighted the province’s decision to retain its fuel tax until at least July due to the unpredictable nature of oil prices. Horner emphasized that Alberta is taking necessary steps to address the situation.
While acknowledging the federal government’s efforts, Horner pointed out that Alberta refrains from imposing a provincial sales tax and highlighted the presence of GST on fuel as an area where further action could be taken. The province’s ongoing relief program is contingent upon the average benchmark North American West Texas Intermediate price remaining at or above US$90 per barrel through parts of May and June, with the current WTI price exceeding this threshold.
Opposition Leader Naheed Nenshi of the Alberta NDP has been urging Premier Danielle Smith’s United Conservatives to eliminate the fuel levy, especially in light of the recent surge in global oil prices following the military conflict in the Middle East. Nenshi criticized the government for not responding promptly to the significant price fluctuations, accusing them of retaining windfall royalty revenues to cover up the substantial deficit projected in Alberta’s 2025-26 budget.
The provincial budget heavily relies on oil revenues, with every dollar change in the WTI price impacting Alberta’s finances by $680 million annually. Nenshi reiterated the call for action on the fuel tax, emphasizing the potential savings for average families. In response, Premier Smith highlighted the government’s income tax reduction initiatives, which have already provided substantial savings for households.
The federal government’s temporary suspension of the fuel excise tax is anticipated to save Canadians 10 cents per litre on regular gasoline and four cents per litre on diesel until Labour Day. Carney noted that this measure will result in a revenue loss of approximately $2.4 billion. Despite calls for aligning with the federal action, Alberta’s Energy Minister Brian Jean deferred to Horner on the matter, emphasizing that Albertans are comparatively better positioned amidst the global economic changes affecting fuel prices.