Starting April 1, 2025, residents of Nova Scotia can expect some welcome relief at the pumps as the federal carbon tax is set to be removed. This change coincides with a reduction in the provincial harmonized sales tax (HST), promising to lower gas prices significantly across the region.
The consumer carbon tax, a controversial charge that has added approximately 17.6 cents per litre to the price of gasoline, will officially end on Tuesday. This decision follows through on Prime Minister Mark Carney's campaign promise to eliminate the tax, which has been a point of contention among many Canadians. The tax has also been blamed for contributing to the rising costs of living, particularly in provinces like Newfoundland and Labrador, where it reportedly cost residents nearly $143 million through 2024, according to the Canadian Taxpayers Federation.
With the carbon tax's removal, gas prices in Nova Scotia are projected to drop by nearly 20 cents per litre, which could bring much-needed savings to consumers. However, the exact impact at the pumps remains uncertain as retailers adjust to the new pricing landscape. The Utility and Review Board of Nova Scotia has recognized that some gas retailers may face challenges in recouping costs for inventory purchased while the carbon tax was still in effect. In a letter issued on March 28, 2025, the board indicated that it plans to implement a mechanism to provide "short-term relief" to these retailers, although the specifics of this plan have yet to be disclosed.
As part of the broader tax changes, the provincial government is reducing the HST from 10 percent to 9 percent, effectively lowering the overall HST from 15 percent to 14 percent. This reduction is expected to further ease the financial burden on consumers, making essential goods and services more affordable.
In Ontario, a similar trend is anticipated as the carbon tax is also set to be eliminated on April 1, 2025. Gas prices across Ontario are expected to fall sharply, with some areas seeing drops of up to 23 cents per litre. Major cities like Toronto, Ottawa, and Windsor are predicted to experience significant decreases in gas prices, with forecasts indicating that prices could dip to around 136.9 cents per litre in Toronto and 135.9 cents in Ottawa.
According to Gas Wizard, a gas price prediction site, the biggest drop is expected in St. Catharines, where prices could fall to 133.9 cents per litre. Other cities, such as London and Mississauga, are also expected to see reductions, with prices dropping to approximately 130.9 cents and 132.9 cents per litre, respectively.
However, while the immediate outlook appears positive for consumers, experts caution that these lower prices may not last long. Dan McTeague, president of Canadians for Affordable Energy, warned that the seasonal switch to summer-blend gasoline could lead to rising prices as early as next week. Summer-grade fuel is generally more expensive to produce and could add an additional 5 to 6 cents per litre to the cost of gas.
Moreover, fluctuations in the global oil market and a weakening Canadian dollar could also contribute to potential price increases in the near future. As such, consumers are advised to take advantage of the current lower prices while they last, but remain aware of the potential for future hikes.
As the clock ticks down to the carbon tax's removal, many Canadians are left wondering how these changes will affect their daily lives. With the promise of lower gas prices and the HST reduction, there is a sense of cautious optimism among consumers. However, whether these changes will provide lasting relief or merely be a temporary respite remains to be seen.
In the meantime, residents across Nova Scotia and Ontario are preparing to fill their tanks, looking forward to the savings that the end of the carbon tax and the HST reduction are expected to bring. As the situation develops, all eyes will be on gas prices and the impact of these significant tax changes on the broader economy.
