Federal Hidden Carbon Tax Costs Seven cents Per Litre of Gas in 2026

OTTAWA, ON: The Canadian Taxpayers Federation is calling on Prime Minister Mark Carney to scrap the hidden carbon tax embedded in federal fuel regulations that increases the price of gasoline by up to seven cents per litre.

“Carbon taxes make life more expensive, hurt Canada’s economy and don’t work,” said Franco Terrazzano, CTF Federal Director. “Ottawa’s hidden carbon tax will cost families hundreds of dollars and blow a multi-billion-dollar hole in Canada’s economy.”

The hidden carbon tax is embedded within federal fuel regulations that took effect on July 1, 2023. The regulations require producers to reduce the carbon content of their fuels. If they can’t meet the requirements, they must purchase credits, increasing costs that are passed onto Canadians purchasing gasoline or diesel. There are no rebates with this carbon tax.

The hidden carbon will cost up to seven cents per litre of gasoline in 2026, according to analysis from the Parliamentary Budget Officer. It will cost up to 17 cents per litre of gasoline when the regulations are fully implemented in 2030.

The hidden carbon tax will cost the average household between $384 and $1,157 in 2030 depending on the province, according to the PBO. It will cost Canada’s economy up to $9 billion by 2030, according to government records.

The hidden carbon tax is “regressive for households” because “lower income households generally spend a larger share of their income on transportation and other energy-intensive goods and services compared to higher income households,” according to the PBO.

“Carney should make life more affordable and get our economy firing on all cylinders by ending all carbon taxes,” Terrazzano said.

The PBO also said that, “Canada’s own emissions are not large enough to materially impact climate change.”

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