Northwestern Ontario residents got a serious hit to their wallets last week as gas prices spiked significantly.
The increase was due to the price of Crude Oil hitting a 7-year high of over $78 dollars a barrel last week, as well as the high demand.
Kenora-Rainy River MPP, Greg Rickford said in an interview with the Q Morning Show producers have halted production of gasoline.
“It increases their profit margins and drives the price up. Northwestern Ontario is sitting at the same price today as it is in Vancouver and Montreal, and I think in Newfoundland they’re soaring over a buck sixty,” said Rickford.
Rickford did touch on two factors that make fuel in Ontario more expensive than in other parts of Canada.
The first factor being the removal of the cap-and-trade price off of gasoline.
“That brought it down five cents at the time but these are global markets and that’s not going to last when a supply and demand issue arises,” noted Rickford.
The program, which began on January 1, 2017, raised revenue for the province through the auction of emissions allowances, which gave participants the right to emit Greenhouse Gases. The province used the auction revenue to fund initiatives that were reasonably likely to reduce GHG emissions. The program ended in July of 2018.
The end of the cap and trade program was estimated to be a $3.0 billion hit to Ontario’s annual budget from 2018-2022.
The second factor in the rise in gas prices is the high Carbon Tax.
“It’s 10 to 12 per cent of the price of a litre now, and it’s going to go up within the next five to six years in around 38 cents a litre. We pay a higher price here,” concluded Rickford.
A 2021 Canadian Taxpayers Federation report showed the federal government raised the carbon tax by $10 per tonne to $40 a tonne. Their plan is to increase it agin to $50 per tonne by 2022, and then $15 per year until it hits $170 per tonne in 2030.
The increase in the Carbon Tax results in an 8.8 cent per litre increase in gas. In 2030, the increase will translate to a 39.6 cent per tonne litre increase in gas.
Last week Kenora saw a 13 cent spike in gas up to $154.9 per litre. Some areas around the region are paying as high as $165.9.
The average price of gas in Northern Ontario is $143.8.