Gas prices to spike next week when federal carbon tax comes into effect

Drivers should brace for a significant hike in gas prices next week when a new federal carbon tax comes into effect for Ontario residents on April 1.

The tax will also be in effect in Manitoba, Saskatchewan, and New Brunswick.

“You’re looking at 5 cents a litre (hike) and for diesel it’s even worse, it’s about 8 cents a litre,” predicted Roger McKnight, chief petroleum analyst at EnPro.

McKnight believes prices will remain high over the next several months, peaking around $1.28 a litre.

Senior Petroleum Analyst for GasBuddy.com, Dan McTeague, told Breakfast Television that 2019 will be one of the most expensive years for drivers in recent memory.

“The composition of your summer fuel is more expensive to make so that adds another five cents to a litre of gasoline,” he said. “It’s going to be a very expensive summer. Probably 2019 is going to come down to being the most expensive we’ve seen going back to at least 2014.”

“So the cost of everything is definitely going up as a result of it,” he added. “This is what people voted for in 2015 … so they can begin to pay now.”

Many businesses have expressed concerns about the added costs.

Ottawa has vowed to return all the funds collected in rebates to individuals, businesses, local governments and other organizations. The rebates for individuals are already flowing as tax returns get filed, but the promised program to help small and medium businesses hasn’t been finalized.

Environment Minister Catherine McKenna has said the final details of the business rebates were still being worked out.

Last week’s federal budget made mention of legislation to allow the funds to be transferred, but offered no specifics.