Gasoline and other fuel prices are set to rise significantly in Alberta on January 1, 2017 due to a new carbon levy that has now been passed by the Alberta Legislature. Gasoline prices will increase by 4.49 cents/litre when the levy is implemented, with a further increase of 2.24 cents/litre on January 1, 2018 to a total of 6.73 cents/litre. The levy will also be applied to diesel fuel, natural gas, propane, and other heating and transportation fuels. The new carbon levy is expected to generate $274 million in revenue for 2016-17 and $1.7 billion in 2017-18, the first full year of implementation.

Carbon levy rates - major fuels

Type of Fuel          January 1, 2017 Rate ($20/tonne)           January 1, 2018 Rate ($30/tonne)
Diesel                                        5.35 ¢/L                                                          8.03 ¢/L
Gasoline                                   4.49 ¢/L                                                           6.73 ¢/L
Natural Gas                              1.011 $/GJ                                                      1.517 $/GJ
Propane                                    3.08 ¢/L                                                           4.62 ¢/L
Source: Alberta Treasury Board and Finance

To assist low and middle income families, the Alberta government introduced a rebate to offset some of the increased consumer costs caused by the new carbon levy in the 2016 provincial budget. As well, Alberta’s small business tax will be reduced from 3 percent to 2 percent on January 1, 2017 to help small businesses deal with these increased costs.

Full information about the carbon levy can be found here.

Bill 20 – The Climate Leadership Implementation Act, which implements Alberta’s carbon levy, was passed on June 7, 2016.

Bill 20 can be viewed here.

RCC has shared our concerns with the Alberta government regarding the potential negative impact that the new carbon levy may have on consumer spending in Alberta and the increased transportation costs that retailers will face.

If you have any questions or concerns, please don’t hesitate to contact: Lanny McInnes, Director - Government Relations (Prairies) at: [email protected] or 204-253-1654