'Some relief' possible for drivers who can't afford B.C. gas prices: Horgan
VICTORIA - Premier John Horgan says the B.C. government will consider “some relief” for those who can't afford record high gas prices.
Horgan says his government will monitor prices at the pumps over the summer after they reached the benchmark record of almost $1.64 a litre Thursday in Metro Vancouver, but he also suggested provincial taxes aren't the only factor affecting prices.
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But he also suggested provincial taxes aren't the only factor affecting prices.
“We'll see how it goes through the summer and if there's an opportunity to have the province step in and help, we'll do that. But at this point, I'm hopeful there will be some correlation between the commodity price and retail price. Those are issues that are market driven and out of my control,” he said.
Horgan said he can't explain a 12 cent a litre increase and perhaps the industry should invest more in refineries and the federal government should invest more in supply.
Dan McTeague, an analyst at GasBuddy.com, said there are several factors at play, including a shortage of gas across the B.C. and northwestern United States caused by two refineries in Washington state running at reduced rates. He said the inability of the Trans Mountain pipeline's capacity to meet domestic needs is also a factor.
Retailers also “helped themselves” to an additional two cent retail margin increase to 14 cents on Wednesday, McTeague said.
On Monday, British Columbia's long-standing carbon tax increased to $40 a ton, which is double the federal carbon tax introduced in Saskatchewan, Manitoba, Ontario and New Brunswick - provinces that did not previously have any carbon tax in place.
That adds another 1.2 cents per litre at the pump, McTeague said.
“When you look at the totality of gas taxes now in B.C., no small amount can be easily or cavalierly dismissed. You're paying over 52 cents a litre in taxes to the federal, provincial, carbon and TransLink taxes,” he said. “That puts you at variance with most other provinces by as much as 18 to 20 cents a litre more.”
The lowest price in Canada posted on GasBuddy.com Thursday was 99.4 cents a litre at a station in Moraviantown, a First Nation's territory in Ontario.
B.C.'s Opposition Liberals pointed blame at the NDP government for claiming to care about affordability while also increasing the gas tax.
“As of today, the government has the dubious distinction of presiding over the highest gas prices and highest taxes of anywhere in North America,” Jas Johal said during question period Thursday, noting a transit tax hike is also on the way.
Environment Minister George Heyman responded saying the government is putting revenue from the carbon tax toward a range of affordability measures, adding that the former Liberal government increased gas taxes by 15 cents compared with the NDP's two-cent increase.
While high gas prices may hurt pocketbooks, one researcher said they can change consumer behaviour.
Nic Rivers, Canada Research Chair in Climate and Energy Policy at the University of Ottawa, said B.C.'s carbon tax has already prompted many people to ditch their cars for bikes and transit alternatives.
The province implemented North America's first broad-based carbon tax in 2008.
Rivers' research suggests that when the carbon tax reached $30 a ton in 2012, it reduced emission by between five and 15 per cent.
The tax effectiveness is measured through statistical comparisons of gas consumption before and after the carbon tax, as well as between provinces, and two other studies have reached similar conclusions.
“They suggest consumers have indeed reduced their consumption of gasoline and natural gas as prices go up,” he said. “Which isn't surprising.”
Gas consumption has decreased steadily in line with price increases and there isn't a single price point that is most effective, he said, because each consumer makes decisions based on their individual financial realities.
One study found the types of cars people buy in B.C. are more fuel efficient because of the tax, he said.
But adjusting your habits isn't possible for everyone and is harder in rural areas where biking and transit options may be less viable or non-existent.
He also noted that the money collected through the new federal carbon tax will be returned to taxpayers through a rebate.
“Most households will get more back than they will actually spend on additional gas taxes,” he said.