Home / Toronto / News / Gas prices going up, not much relief in sight for motorists

Gas prices going up, not much relief in sight for motorists

Why are gas prices so high and what can be done to offset the cost?

TORONTO, March 28,2-22 – Russia’s invasion on Ukraine has had a ripple effect across the globe, affecting gas prices. Gasoline prices are based on the cost of crude oil which jumped in response to the invasion and Western sanctions as countries like Canada, Australia, Britain, and the United States imposed outright bans on Russian oil purchases. The US and Europe were already dealing with higher gas and energy prices due to supply chain disruptions stemming from the COVID-19 outbreak. Now, energy experts say that due to the onset of stringent sanctions against Russia, gas prices can be expected to continue to climb.

“This is just really the calm before the storm,” Canadians for Affordable Energy President Dan McTeague told CP24 News recently. “I think we’re heading for US$150 for a barrel of oil, and that would mean gasoline prices will easily surge to $2 a litre probably in the next few weeks.” The federal government’s carbon tax is set to increase on April 1, which will drive the price up increasing the pressure on Canadians feeling the pinch at the pump. According to McTeague, the feds should put the brakes on that increase and sit down with provincial leaders to look at a rebate to provide some relief for motorists.

Gas prices continue to soar in North America. *Photo by Krzysztof He*pner on Unsplash

Ontario is the most populous province in Canada with 14.45 million people representing 38.3% of the country’s population. It is home to the country’s most populous city, Toronto, and the Canada’s capital city, Ottawa. Millions of Ontarians rely on their automobiles to travel to and from work, school, shopping excursions, and medical appointments. Many others depend on their vehicles to work. Taxi, limo and ride sharing services are all heavily impacted by fuel costs. The Canadian Taxpayers Federation has called on Ontario Premier Doug Ford asking him to honour his promise to cut the gas tax by 5.7 cents per litre by March 31. “Ontario Premier Doug Ford owes you a tax cut,” said Jay Goldberg from the Canadian Taxpayers Federation.

Premier Ford has said he will “look into” a long-promised gas tax cut while also calling out the carbon tax for negating previous savings his government tried to implement for drivers. As recently as November, Ford said the government would meet its promise to cut prices by 5.7 cents per litre by the next budget, which is due at the end of March. Ford is saying he will cut taxes if the federal government will do the same. “I called out the prime minister. He needs to lower the taxes,” Ford said. “He needs to lower this carbon tax, and he needs to cut … the carbon tax, bottom line. Because we already cut four and a half cents off of gas prices and the carbon tax came along and it went right back up.”

The opposition at Queen’s Park couldn’t disagree more with pausing the carbon tax. Ontario’s Green Party leader Mike Schreiner believes the planned increase will benefit consumers. “Quite frankly the carbon pricing actually gives people a rebate that for most people puts more money in their pockets which will help them address affordability challenges,” he says. “I would say don’t get rid of those carbon rebates, I want those for Ontarians.” NDP leader Andrea Horwath feels that gas regulation is the way to go. “It is not a good idea to take those gas taxes away because they fund our health care and our education system and so many other things, so we have to be really, really thoughtful,” she says. Ontario Liberals want to increase incentives for purchasing an electric vehicle. “I think there’s also a responsibility to move forward to help people transition away from fossil fuel burning vehicles,” says Liberal leader Steven Del Duca.

The auto industry is a key element of Ontario’s economy with a strong track record of building cars and car parts. In fact, it’s the only province in Canada that builds cars and trucks. Trucking is a lifeline of the Canadian economy and Ontario has several of the largest trucking fleets in the country. TFI International, based in Montreal, Quebec remains the largest trucking operation in Canada while Canadian National Transportation headquartered in Brampton, Ontario holds the number 2 spot. Trucks were very much on display for three highly charged weeks during the trucker convoy protest-turned-occupation in downtown Ottawa and at blockades at key Canada-US border crossings. Now, many truck drivers are frustrated at rising gas prices that have gone into “overdrive” and fear that if the hike continues it will put them out of business.

Recently, Alberta announced a 13-cent decrease in the price of gas effective April 1. The tax cut is tied to the price of oil, which allows Alberta to offset the tax cut with increased oil revenue. Alberta, as Canada’s main oil-producing region, can help alleviate the global oil supply crunch caused by energy disruptions, says Alberta’s Energy Minister Sonya Savage. “We are the solution, not Venezuela and others,” Savage told Reuters, an apparent reference to the U.S. sending a delegation to Caracas recently to discuss an easing of U.S. oil sanctions. Alberta Premier Jason Kenney has called out President Biden’s vetoing of the Keystone XL pipeline, saying that with his approval of the project Canada could provide “nearly 1 million barrels a day of responsibly produced energy,” to the U.S., replacing “Russian conflict oil.”

Rising gas prices are creating a windfall of cash for both levels of government, McTeague says, but “in an environment where prices are going through the roof. It’s not likely that governments are going to be successful in mitigating the increase.” He says the best course of action would be a rebate to consumers to help ease the burden while world oil prices are volatile.