Published: Wed, April 03, 2019
Markets | By Otis Pena

Gas prices set to rise Monday as carbon tax goes into effect

Gas prices set to rise Monday as carbon tax goes into effect

The Saskatchewan government said the provincial sales tax (PST) won't be charged on the federally imposed carbon tax when it comes to SaskPower and SaskEnergy utility bills.

Citizens of the four provinces will be receiving rebates on their income tax returns, which start at $128 annually, but vary between provinces and increase for people with spouses or dependents at home.

While Ford said he is staying out of the federal election, he took pains to brand the carbon pricing scheme as the "Trudeau Liberal carbon tax" and cast doubt on Ottawa's promises.

While the federal government has insisted the carbon tax will be revenue-neutral for Ottawa, a government official speaking at a technical briefing for journalists acknowledged that some Canadians - about 30% of them - will pay more per year in carbon taxes than they stand to gain from the new rebate program.

"Nobody trusts the federal government when they cross their fingers and say they will eventually give the money back to us", he said.

A starting levy of Can$20 (US$15) per tonne of pollution imposed on Manitoba, New Brunswick, Ontario and Saskatchewan - all led by Conservatives - will add about 4.4 cents to the price of a liter of gasoline, and drive up other energy costs too.

Schwarzenegger, a Republican, was governor as California prepared to introduce a cap-and-trade system though he left office about a year before it was implemented in 2012.

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Pallister suggests the federal rebates may not be enough to offset increased costs businesses will face, which could be passed on to consumers.

"The U.S. does not have any kind of carbon levy or carbon charge so it makes it more hard to compete internationally", she said.

Saskatchewan's PST is now not applied to natural gas.

"Putting a price on pollution is the most affordable and effective way to cut pollution", Environment Minister Catherine McKenna said on Twitter, enlisting support from former California governor Arnold Schwarzenegger.

"This is unfortunate and also demonstrates a lack of listening and willingness to co-operate", he said.

It is still very uncertain as to how widespread the impact will be, how businesses will receive rebates, and whether the tax will survive court challenges underway in two of the rebel provinces.

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