Yukon News

No, you’re not paying more for gas because of Alberta’s carbon tax

Maura Forrest Friday January 6, 2017

Joel Krahn/Yukon News

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Andrew Noble fills up his car at the Superstore Gas Bar in Whitehorse yesterday. A recent rise in fuel prices in the territory is probably due to refinery problems in the American Midwest, not Alberta’s carbon tax, according to a petroleum analyst.

Yukon drivers may have noticed they’re paying a little more at the pump these days.

Gasoline prices in Whitehorse were hovering around $1.20 per litre as of Friday morning, up from about $1.12 on Dec. 21, according to the Yukon Bureau of Statistics.

So does the price hike have anything to do with Alberta’s new carbon tax, which came into effect on Jan. 1?

The answer, it appears, is mostly no. And maybe also a little bit yes. But mostly no.

As of this week, Albertans are paying a carbon tax of 4.49 cents per litre on gasoline. The provincial carbon tax was implemented at $20 per tonne in the new year.

Yukon purchases most of its gasoline from Alberta. But that doesn’t mean Yukoners are paying Alberta’s carbon tax at the pump.

“In our tax plan, only gas that’s consumed in Alberta, burnt in Alberta, would be subject to the levy,” said Mike Brown, press secretary for Alberta’s finance minister. “So there shouldn’t be an impact on Yukon gas prices.”

Alberta’s carbon tax is applied to consumer purchases. So if Yukoners drove down to Alberta and filled up at gas stations there, they would pay the levy. But there’s no carbon tax on the gasoline imported for sale in the Yukon.

Alberta’s 2016 budget, which lays out the province’s carbon tax plan, includes a section on exported fuel.

“Fuel sold for export will be exempt from the levy as it is not consumed in Alberta and the related emissions are not released here,” it reads.

There are a couple of other ways that gas prices in the Yukon could be affected by the carbon price in Alberta. Fuel delivery trucks driving up from Edmonton will pay more when they fuel up at Alberta gas stations, and they could pass on that extra cost to Yukon customers. The carbon tax on diesel — used by most trucks — is 5.35 cents per litre.

But Jason Parent, vice-president with Kent Group, a downstream petroleum consulting company, said the impact of that price increase would be “fairly minimal.”

“Distribution costs in general are low,” he said.

Parent said it’s also possible that Alberta refineries could increase their wholesale gasoline prices because they, too, will have to pay increased fuel costs thanks to the carbon levy.

But refineries have to remain competitive, he said, so it’s “unclear” how much of that extra cost they could pass on to customers.

“It would be very, very small, most likely, and probably imperceptible,” he said.

Dan McTeague, a senior petroleum analyst at GasBuddy.com, agreed that Yukoners don’t have much to fear from Alberta’s carbon levy.

“There is no impact for Yukoners for gas prices regarding Alberta’s carbon tax,” he told the News by email.

So if Alberta isn’t to blame, why are prices up at local gas stations?

McTeague said that likely has to do with a couple of refinery problems in the American Midwest last month, which drove up gasoline prices.

“All western and northern Canadian gas prices are based on the Chicago spot market,” he said. “That market sets the trend for refinery prices in Edmonton.”

Parent said the hike could also be related to the rising price of crude oil, and to an increase in wholesale prices relative to crude oil. He said that wholesale prices can sometimes rise with no corresponding increase at the pump, which can then lead to a sudden jump.

“So that may have been building for some time, and then that eight-cent jump (in Whitehorse) is a margin correction,” he said.

Brown said that changes in the price of oil will have a “much bigger impact” on gas prices than the carbon tax.

In fact, gasoline prices in Whitehorse are now 20 cents per litre higher than they were a year ago, when they hovered just below $1 per litre.

In October, Maclean’s published an estimate from University of Calgary economist Trevor Tombe that a $50-per-tonne carbon tax, which is to be in place across Canada by 2022, will increase gas prices by about 11.2 cents per litre.

Last month, Yukon Premier Sandy Silver signed a new national framework on climate change, along with most of Canada’s premiers. The agreement will bring carbon pricing to the Yukon, though Silver plans to wait for Ottawa to impose a carbon tax on the territory in 2018 instead of creating his own.

Contact Maura Forrest at .(JavaScript must be enabled to view this email address)

21 Comments

Riptide wrote:
1:23pm Monday January 16, 2017

Walter Wrote:
” Your never going to change bigots minds about global warming even if every glacier in the Yukon melted.”

**********

Canada could eliminate 100% of their GHG’s and thus have a negative carbon footprint (which realistically we probably already do) and if (when?) every glacier in the Yukon melted, people would still ***** that we didn’t do enough. The reality is that regardless of what one thinks of global warming, is that Canada as a whole and YT in particular doesn’t emit enough GHG’s to make a tangible difference even if we eliminated all of what we do emit. You want to see a difference? Get more homes on electric and increase Whitehorse’s hydro output (YN reported that the cold snap we had in Dec cost YP/Atco almost a million in diesel fuel).

And secondly, you do not change demand of an essential product by increasing it’s price. And like it or not, in northern Canada, fuel (gas and heating oil) is an essential product.

north_of_60 wrote:
2:24pm Friday January 13, 2017

If we were burning terrorist oil from the Mideast to heat our buildings, run our vehicles and barbecue our bison burgers, then I could see a good reason to use less.  However the oil and gas we burn in the Yukon comes from Canadian wells, and it’s been extracted and produced in a country with some of the highest environmental [ and human rights] standards in the world.  That Canadian oil makes jobs for fellow Canadians, pays their taxes, puts a roof over their head and food on their table.  Revenue from petroleum provides transfer payments to every have-not Province and all the Territories.

The NDP and LIB want us to stop using Canadian oil as a symbolic gesture to “combat climate change”, even though they can’t provide proof that the fossil fuels we burn in the Yukon have any measurable effect on the planet.  They’ve tried to convince us we should feel guilty about using Canadian oil and pay more tax to use it.  They also can’t prove how a tax increase will do anything to mitigate the effects of rising temperatures in the North.

At the same time the NDP-LIB want us to use less Canadian oil they want to buy more renewable energy toys from Asia where half of the GHGs and most of the toxic pollution in the world is created by burning coal to run the factories making all that stuff.  The toxic waste from those mines, factories and cities is dumped into the sky, onto the land, and into the water.

This NDP-LIB attitude exemplifies greenwashed NIMBYism on a global scale.  They don’t care if the planet is heavily polluted to make their renewable energy stuff, just as long as the pollution isn’t visible on their eco-tour raft trips on Yukon rivers or driving their Chinese-made electric car.
The NDP-LIB will raise taxes, but they’ll give them trendy names to make us feel good.

Will your wage go up to match the rising costs? wrote:
10:44am Friday January 13, 2017

“Fuel sold for export will be exempt from the levy as it is not consumed in Alberta and the related emissions are not released here,”

I’d thought one of the few potential benefits of a carbon tax in Alberta was that oil companies would have to pay a price on the vast quantities of crude oil that they ship around the world, thus increasing the revenues for Albertans and the Alberta government.

Apparently not,  and how hypocritical of the NDP. This further proves this tax has nothing to do with world wide emissions, and more about generating revenue from the people of Alberta, not foreign owned oil companies. No wonder the oil companies approve of this tax, it’s effects on them are marginal.

And more biased coverage from the Yukon News, as usual.  I’d like to see an article about what a carbon tax will do to the Yukon’s economy, or why a carbon tax won’t work.

walter wrote:
12:36am Friday January 13, 2017

  I forgot to mention that North of 60 in a previous post stated that those who resorted to name calling had already lost the argument. (Neo-Luddite Church of the Presumptuous Assumption )
  I had at another time pointed out that 2 of his posts on the same article were contradictory which he denied and called me foolish for misquoting him. How do you misquote someone when you point them to their own posts. It would seem that principal has a very short shelf life in the confused neo-con world.

Walter wrote:
11:56pm Thursday January 12, 2017

  Curiously the following major cities have no idle by-laws to name just a few : Halifax, Toronto, Hamilton, Ottawa. I guess a good portion of the population of Canada are just being nosy and should mind their own business. Some say no idling for any more than 3 minutes in a 1 hour period.
Regardless stinky half burned diesel is enough to gag anyone.
  Why would it be okay for 1 in 300 to nauseate everyone else not even considering what it’s doing to the environment. Those who have sniffed to many toxic diesel fumes should consider that others may not wish to become like them.

north_of_60 wrote:
2:42pm Thursday January 12, 2017

Those who continue to flog the dogma of the Neo-Luddite Church of the Presumptuous Assumption are misinformed at best.  CO2 is a feature, not a problem.  Here’s some easy-to-digest education:  https://youtu.be/j5M1qtN62yk  Matt Ridley delivers the 2016 Annual GlobalWarmingPolicyFoundation Lecture at the Royal Society, London 17 October 2016.

The TrudoTax is a tax increase to fund the LIB style of ‘tax-and-spend’  governance.  It would have looked bad to increase the GST back to the 7½% the LIBs need, so it’s much easier to con the gullible and misinformed with a ‘guilt tax’.

If you don’t believe you’re taxed enough, then why did you accept your income tax refund?  Those who like being taxed more to fund their LIB masters should just honestly admit it, and stop trying to con everyone with self-righteous, save-the-world, stop-climate-change codswollop.  Save it for whine-and-cheeze parties with fellow believers.

As for “a big 3500 something idling” that seems to have upset some of the AGW believers, consider that such vehicles might consume a dollar’s worth of fuel idling for an hour or so.  Do you really believe that increasing that cost to $1.10 is going to change the habits of people who can afford such vehicles?  Besides, it’s none of your business how much fuel anyone burns;  they’re free to spend their money anyway they choose, just like you are.

Max Mack wrote:
2:04pm Thursday January 12, 2017

Actually, the increase in the pump price does reflect carbon taxes levied on the fuel used to fill the delivery trucks. I’m disappointed that Maura hasn’t written a more balanced piece.

From the story: “The carbon tax on diesel — used by most trucks — is 5.35 cents per litre.”

Before the carbon tax, using November data, the average price of diesel fuel in Edmonton was about $0.927 per litre. Adding the carbon tax, the new price of diesel fuel would be $0.9835 per litre - that’s a 5.8% increase in cost. Trucks carrying fuel up the highway must pass that cost increase on.

Do the math . . .

Average retail price for self-serve gasoline in Whitehorse before the carbon tax was 109.9. Add that 5.38% calculated above. That’s 116.27. Pretty dang close to where we are now with 119.9 at most stations.

I realize my limited analysis does not include the weighting effects of fuel purchased by truckers in Alberta vs Yukon, but I think it is pretty safe to say that we are seeing an immediate effect on prices at the pump because of the AB carbon tax.

This increase in price will flow through to everything that is trucked up the highway - food, clothing, appliances, building materials, vehicles, luxury items . . . you name it. And, we haven’t yet factored in the proposed Yukon carbon tax. And, we haven’t yet to encounter the planned increases in carbon taxes in future years to meet government targets.

What governments aren’t telling you is that some analysts argue that carbon taxes must be in the range of $200-300 per ton of CO2 to significantly reduce human-generated CO2.

Jim cleaver wrote:
10:08am Thursday January 12, 2017

It all sounds good on paper. Keep in mind that everything that comes into the Yukon will have a fuel surcharge on it. Include air fares in that as well. Prices at local merchants will increase and therefore we pay more. But we can all shop Amazon and avoid that right? It’s a long way off but if we all end up in tiny homes squatting all over and crapping in chemical toilets, not contributing to society, where do we end up? Carbon tax is a “fine”. We are going to fine you for driving to work, heating your house, buying your groceries, clothing, etc. Let’s just be up front about it. Our neighbours south of the border aren’t doing it. China, Russia aren’t doing it. Do we really believe they are going to if we set an example?

Walter wrote:
12:16am Wednesday January 11, 2017

    The Carbon tax is designed to change peoples behaviour regarding the wasteful use of fossil fuels. I believe it will have that effect but it will take some time. Sure we have a small footprint but why shouldn’t we do our share. Your never going to change bigots minds about global warming even if every glacier in the Yukon melted. They will just come up with some bogus story about how GHG is all a hoax.  There was a big 3500 something idling away at the CGC on the weekend for well over an hour with blatant aplomb. The only vehicle doing so that I could see. I believe this violates a no idle bylaw and if so I would further like to see that any City employee be able to issue an idling violation ticket with a witness counter signing. The little bits add up quickly in spite of Con claims. I mean look what they’ve done for the world in all other areas. Polution for profit.

Reality Check wrote:
10:06am Tuesday January 10, 2017

@Whiners, that’s a nice little reality you’ve invented for yourself. Unfortunately for you the truth is that drivers and their gas taxes already fund anything and everything most of which has nothing to do with roads or road maintenance. If all gas taxes were funneled back into the upkeep of roads we’d all be driving on superhighways, but you go ahead and keep sniffing whatever it is that’s giving you such grand delusions.

Hey north_of_60 ... wrote:
10:02am Tuesday January 10, 2017

It’s called the Federal Gas Tax and can only be used for specific projects, not whims. Look it up and educate yourself. And I wasn’t talking about the NDP. I was talking about the cons who are complaining about the tax (hence the “communists in conservative clothing” comment). While comedy might not be my forte, clearly reading comprehension is not yours.

north_of_60 wrote:
11:31pm Monday January 9, 2017

@
Whiners believes “We have a tax on gas that’s used to fix roads. ”  What a joke.  Parrot a lie often enough and soon you’ll believe it’s true.  They should go learn how our gas taxes are used as slush funds to finance every green-washed whim that catches the government’s attention. 
Describing the NDP as “a bunch of communists in conservative clothing with their hands out” is silliness at it’s best, but don’t give up your day job, comedy is not your forte.

Jonathan Colby wrote:
6:46pm Monday January 9, 2017

For myself, I would ask that you not throw communists into the mix. Pretty sure there’re no new complaints about the economy. It still belongs to the oligarchs and the corporations, instead of the workers.

Whiners wrote:
12:11pm Monday January 9, 2017

It costs money to deal with the effects of carbon emissions. So why shouldn’t the people responsible for creating those emissions pay for it? We have a tax on gas that’s used to fix roads. Why shouldn’t their be a tax on emissions to help pay for incentive programs aimed at energy efficiency and dealing with the effects of climate change?

Instead, we have a bunch of communists in conservative clothing with their hands out, crying about having to pay their share. The government isn’t going to keep bailing you out and many of us are sick of paying more than our share so you can keep acting like carbon pigs. Pull your own weight already because many of us are sick of paying your way as well as our own.

'Tater Tax wrote:
6:30pm Sunday January 8, 2017

Meanwhile ‘lil tater jetted off to the Bahamas for the holidays in the Air Force Challenger jet. In his own words, ‘We all have to do our part to reduce carbon.’

Ptabbe wrote:
8:57pm Saturday January 7, 2017

Maybe Trudeau need to vacation in chine for a month and breath some of tha fresh breeze .let see if he will impose the tax.
He is robbing as all

Jonathan Colby wrote:
10:18pm Friday January 6, 2017

Oh, the price only skyrocketed because of corporate greed? Good to hear! I can put my prepared outrage until the gummint comes to tax me into abject poverty.

north_of_60 wrote:
6:13pm Friday January 6, 2017
north_of_60 wrote:
5:45pm Friday January 6, 2017

Perhaps the TrudoTax won’t increase the price of fuel at the pumps, but it will increase the price of everything transported from southern Canada.

Where are the YP now? wrote:
4:16pm Friday January 6, 2017

I can only assume that the YP will be tweeting this article ASAP?

Bill Fredrick wrote:
3:51pm Friday January 6, 2017

Anyone out there want to buy the Brooklyn Bridge???

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