The calls to “do something” about gasoline prices are getting ever more strident.
Oddly, they are not coming from Quebec or British Columbia, where prices tend to be high, but largely from Saskatchewan and Alberta, which enjoy the lowest fuel prices in Canada.
And why do these provinces yearn for cheap fuel when their own petroleum industry profits massively from high prices, as do their provincial coffers?
Despite complaints about high fuel prices, Ford, General Motors and Stellantis (Dodge Ram) pickups are the three most popular new vehicles sold in Canada. In total, 1,285,829 trucks (83 per cent of the market, including SUVs and minivans) were sold in 2022, but that number for cars was a paltry 272,408 (17 per cent).
The North American market for cars is now so poor that Ford, GM and Fiat/Chrysler stopped manufacturing ‘cars’ in North America recently. If you buy their car brands, these will be imported.
Do people ‘need’ trucks for carrying loads? I find that hard to believe. People in the building trades may need a truck to carry equipment.
Of course, some do, but plumbers, electricians, and siding/gutter installers all drive vans. They would not leave their tools out in the open where rain could cause damage or their copper pipe/wire in view so these materials might be stolen. There is simply no way more than half of new vehicle buyers actually need a truck to carry cargo.
Personally, if I need a bigger vehicle, I rent one. I am always glad to return it and get back into my nimble, easy-to-park, small car.
Then there is the perennial complaint about the carbon tax, usually from federal or provincial conservatives — notably, Pierre Poilievre, leader of the Opposition, and John Brassard, MP for Barrie-Innisfil.
The complaint is often phrased, “People cannot afford to fill their cars these days.” But, if that is the case, why do pickup trucks — virtually all with four-wheel drive — continue to fly out of dealerships? Four-wheel drive boosts fuel consumption by roughly 10 per cent.
At its current level, the carbon tax adds just 10 per cent to the price of a litre of fuel. Replacing a pickup truck with a mid-size car would cut your fuel bill by half; a small car would reduce fuel consumption by a further 20 to 30 per cent.
The money you don’t spend on fuel is the equivalent of income — dependable and free of income tax.
Frankly, the logic escapes me.
Add to that the fact each Canadian receives a nominal carbon tax rebate. This isn’t based on how much carbon tax you paid on your gasoline or home heating fuel; it is a fixed amount. Rural residents receive an additional 20 per cent in recognition of the fact they often heat with less efficient fuel oil and do not have public transportation, so they are forced to drive everywhere.
People with large, heavy vehicles end up out of pocket. For people like me who have always preferred small, fuel-efficient cars and have made the effort to reduce home energy consumption, the rebate handsomely exceeds the carbon tax we have paid and becomes an additional source of income that drops into our bank accounts four times a year.
The whole point of the carbon tax was to nudge Canadians toward reducing our consumption of fossil fuels. Every year, this nudge becomes a little more forceful.
Instead of complaining about the price of fuel, people should make an effort toward fuel efficiency. That has the potential to save far more money than getting rid of carbon taxation entirely.
Do I think taxing carbon emissions is a good idea? Well, yes I do.
By worldwide standards, Canada, a country with a small population, emits little carbon compared to populous countries like China or the United States of America. But if we do not show leadership on this matter, how can we expect countries like Malaysia, Nigeria, India, Paraguay and others to accept the need to curb their emissions?
After all, climate change is real. New Scientist just reported 2023 will be the warmest year on record, warmer than our planet has been for 125,000 years.
We Canadians are fortunate because, on average, 85 per cent of our electricity is either renewable or nuclear. Sadly, as individuals, Canadians emit considerably more carbon than most other countries. Some people suggest this is because of our long, cold winters.
However, Finns, Swedes and Norwegians produce half the amount of carbon we emit, despite similarly chilly winters.
Scandinavians are also, on average, wealthier than we are, partly because they need to buy less energy.
They levy higher taxes on fossil fuels than we do, spurring their populations to conserve. Although Norway is a petroleum-producing country, they give themselves no tax breaks on fuel. Their gasoline costs $3 per litre, roughly double ours and in line with what their fellow Europeans pay.
Some Canadian politicians claim carbon taxation has failed and will not reduce Canadian carbon emissions. Clearly, they forgot high tobacco taxes were one of our main tools helping to dramatically reduce smoking rates over the past two decades. Our higher tobacco taxes also drove Canadian smoking rates below numbers in the United States. (See Table 1 in this reference.)
The bottom line is simple: We can beg governments to roll back taxes on fossil fuels, or we can make the effort to improve personal energy efficiency. Removing the carbon price on fossil fuels has the potential to lower home heating bills by 10 to 15 per cent, but only if the government does it.
Consider the carbon tax on heating oil is 10 per cent. If you cannot afford to spend $1,000 on fuel oil, how can you believe $900 is magically affordable? The $100 saved might buy a week’s worth of groceries — each year.
I heat with natural gas. I also cook (plus a barbecue) with it and use it to heat my domestic hot water. My bill for the past 11 months was $1,186; the carbon tax on this came to $181, or 15 per cent. If this tax was removed from my bill, the amount saved wouldn’t quite cover two weeks of groceries for my wife and me.
Recently, the prime minister must have felt a chilly wind. He exempted fuel oil for heating from carbon tax for three years. Predictably, the provincial premiers immediately piled on, demanding this “tax pause” be extended to all fossil fuels used for heating.
Of course, as I have been arguing, such a tax break is trivial, not life-changing.
On the other hand, investing in energy efficiency can reduce your spending on home heating by half. If you drive a pickup truck, replacing it with a smaller, lighter vehicle could drop your gasoline consumption by up to 70 per cent.
Not only that, but once you have done this, the savings continue, even if a future government changes course and reinstates the carbon tax.
The choice is yours.
Barrie resident Peter Bursztyn is a self-proclaimed “recovering scientist” who has a passion for all things based in science and the environment. The now-retired former university academic has taught and carried out research at universities in Africa, Britain and Canada. If you have a question Peter might be able to answer or something you’re curious about, email [email protected].