Ottawa’s new fuel regulations add to carbon tax pain in Nova Scotia

At a time when many Nova Scotian families are struggling to pay the bills, the federal carbon tax, which went into effect in the province July 1, will add 18 cents per litre to the price of gasoline and raise the cost of goods and services more broadly. Unfortunately, barring a change in government policy, this increase in prices is just the beginning.

The carbon tax is set to rise from $65 per tonne this year to $170 per tonne in 2030. The pain for Nova Scotians extends well beyond simply fuelling their vehicles. For example, according to a recent study published by the Fraser Institute, the $170 per-tonne carbon tax will shrink the provincial economy (measured by GDP) by an estimated 2.4 per cent and result in nearly 1,000 job losses in 2030, compared to the state of the economy with no carbon tax.

But wait, there’s more.

Over and above the carbon tax, the federal government is now imposing new Clean Fuel Regulations, known as the CFR, which requires fuel producers and importers to reduce the carbon content of fuels they sell. By 2030, the “carbon intensity” of these fuels, which measures emissions generated per unit of energy, must be 15 per cent below 2016 levels. Consequently, the CFR will lead to increased prices for virtually all fossil fuels including gasoline, diesel, natural gas and propane.

While the CFR will impose costs all over the country, Nova Scotians will be among the hardest hit. Among the provinces, according to a recent analysis by the Parliamentary Budget Officer, Nova Scotians will bear the third-highest costs (trailing only Alberta and Saskatchewan) with the CFR costing some Nova Scotian families an average of $635 per year.

To make matters worse, the costly effects of the Trudeau government’s carbon tax and clean fuel regulations will fall disproportionally on lower-income households who dedicate a higher proportion of their income toward electricity and heating bills. Besides fuel, the carbon tax and clean fuel regulations also indirectly increase the price of many other goods—including groceries—by increasing the cost of transportation.

While most Nova Scotians want to protect the environment, they likely don’t want to pay ever higher taxes in the name of environmental protection. At a time when many families are struggling to keep up with increases in the cost of living, the joint burdens of the escalating carbon tax and clean fuel regulations will cause great economic pain across the province. Unfortunately, this is just the beginning.