Canadian drivers are facing an uphill battle at the pumps, with nearly half of the price of gasoline set to be paid in taxes by 2030, according to the Canadian Taxpayers Federation’s 2024 Gas Tax Honesty Report.
By 2030, some provinces’ residents will pay more tax than they do for the gas itself.
As of the third week of July 2024, Canadians paid $38.11 in taxes and $68.22 for the pre-tax fuel to fill up a 64-litre tank, totalling $106.33. Currently, the average Canadian pays almost 36% in taxes to fuel their vehicle.
The total tax consists of four components. Provincial tax is about 38%; federal tax is around 30%; carbon tax is just over 32%; and tax-on-tax is about 7.6% of the total tax paid.
Tax-on-tax occurs when some governments calculate sales tax after adding all the per-litre taxes, resulting in taxes being paid on top of existing taxes. In 2024, Canadians paid an average of 4.5 cents per litre in tax-on-tax costs.
Statistics Canada’s June inflation data highlighted that the two provinces that had removed their carbon and fuel tax remained on one end of the inflation spectrum, with the rest of the country on the other end. Saskatchewan and Manitoba’s inflation remained at 1.4% each, with the next lowest province being Quebec at 2.2% and the highest inflation rate seen in Nova Scotia at 3.5%.
Manitobans currently pay the least to fill up their 64-litre tank as the only province with no provincial taxes. They pay $90.78, followed by the second-lowest province, Alberta, at $98.04.
The Liberals have raised the price of the carbon tax every year since 2019. The carbon tax reached $80 per tonne on Apr. 1, 2024. The Liberals plan to raise the tax by $15 per year until it reaches $170 per tonne in 2030.
By 2030, the average Canadian will pay $62.63 in total taxes for a 64-litre fill-up. They will pay $68.22 for the pre-tax fuel, for a total cost of $130.85 to fill up their car. Canadians will pay almost 47.9% in taxes and 52.1% for the gas itself.
Carson Binda, British Columbia’s director for the Canadian Taxpayers Federation, said the taxes to fill up a minivan cost more than a home-cooked dinner for a family of four.
“Politicians from all political parties need to commit to making life more affordable by cutting taxes on gas during the upcoming provincial election,” said Binda.
Residents of Nova Scotia will pay $69.51 in total tax and $67.81 for the pre-taxed fuel by 2030, for a total cost of $137.32. Therefore, residents of Nova Scotia will pay 50.61% in taxes and 49.38% for the fuel itself to fill up 64 litres in 2030.
While other provinces pay only slightly more for the gas itself than they do in taxes, those in Vancouver will pay more in taxes than for the pre-taxed fuel, $64.63 versus $64.16, for a total of $128.79.
Binda highlighted that those in Vancouver pay an average of 81 cents per litre in taxes. In comparison, Victoria pays 74 cents per litre in taxes. In the rest of the province, 68 cents per litre are paid in taxes.
“Carbon taxes cause a lot of pocket-book pain for ordinary families, without any meaningful environmental gain,” said Binda. “Taxing British Columbians for heating their homes or driving to work won’t solve a global problem like climate change.”
The average Canadian spent more on taxes in 2023 than they did on basic amenities like shelter, groceries, and clothing combined, according to a previous report.
The Canadian Taxpayers Federation previously calculated that the carbon tax would cost the Canadian economy $12 billion in 2024 and rise to $30 billion annually by 2030.
A non-binding motion for the premiers to discuss the carbon tax with Prime Minister Justin Trudeau was previously passed by the Conservatives, following unexpected support by the NDP and Bloc Québecois.
The motion passed following 70% of Canadians and 70% of provincial premiers asking Trudeau to “spike the hike.”
Conservative Leader Pierre Poilievre previously called on Trudeau to give Canadians a “summer break” from inflation by removing federal taxes on gas.
Federal director of the Canadian Taxpayers Federation, Franco Terrazzano, echoed Poilievre’s call.
“Canadians need a holiday from Trudeau’s high gas taxes,” said Terrazzano. “If politicians were serious about making life more affordable, then they would cut gas taxes now.”