Gas prices across Canada have seen a dramatic drop as of April 1, 2025, following the removal of the federal carbon tax on fuel. This significant policy change has resulted in lower prices at the pump, bringing relief to drivers nationwide.
In Halifax, the Nova Scotia Energy Board announced a reduction in the minimum price of self-serve regular gasoline by 17.4 cents, bringing it down to 146.5 cents per litre. The price of self-serve diesel also decreased, now sitting at 161.2 cents. Previously, on March 28, 2025, gas prices were at 163.9 cents, while diesel was at 181.0 cents. This price drop is directly linked to the elimination of the carbon tax, which took effect today.
Additionally, the provincial government implemented a harmonized sales tax (HST) cut, reducing the provincial portion from 10 percent to nine percent, thus lowering the overall HST from 15 percent to 14 percent. This combined effect of the carbon tax removal and the HST reduction is expected to ease the financial burden on consumers.
Across the country, the impact of the carbon tax removal is equally pronounced. In Prince Edward Island, for instance, gasoline prices fell by 20 cents per litre to $1.49, while diesel dropped by 24 cents to $1.66. This change came swiftly after Prime Minister Mark Carney signed a directive on his first day in office, canceling the carbon tax and allowing lower fuel prices to take effect immediately.
Eligible Canadians who have received quarterly carbon rebates in the past can look forward to one more payment on April 22, 2025, provided they file their taxes by April 2. Those who miss this deadline will receive their rebate once their taxes are assessed. Notably, there is no carbon tax applied to home heating oil, following a controversial exemption announced by Ottawa a year and a half ago.
Former Prime Minister Justin Trudeau first introduced the carbon pricing scheme in 2019, aiming to incentivize Canadians to reduce fossil fuel consumption and transition to greener energy sources. However, rising inflation and the financial strain on households led to increased opposition to the tax, especially from Conservative Leader Pierre Poilievre, who campaigned on a promise to "axe the tax." This sentiment resonated with voters, ultimately leading to the tax's removal.
In New Brunswick, the carbon price for consumers has also been set to zero, resulting in a drop of 20.2 cents per litre for regular self-serve gasoline, which is now priced at around $1.44. Diesel prices decreased by 24.6 cents, bringing them down to approximately $1.61. This change highlights the widespread effect of the federal government's decision to eliminate the carbon tax on fuel.
Dan McTeague, President of Canadians for Affordable Energy, indicated that gas prices are expected to drop nearly 20 cents per litre across Ontario as well, thanks to the withdrawal of the federal carbon tax. As of 12:01 a.m. on April 1, gas stations are no longer required to collect the 19.9 cent carbon tax on gasoline or the 24.2 cents for diesel, inclusive of HST. Prior to the removal, gas was selling for an average of $1.45 in Windsor, Ontario, on March 31, 2025.
In Ontario, the average gas price is now expected to range between $1.33 to $1.39 per litre, translating to an estimated savings of about $10 on a full tank for drivers. This reduction comes after the carbon tax was previously set to rise by another $15 per tonne today, which would have brought it up to $95 per tonne. Carney's swift action to scrap the tax is seen as a pivotal moment in his administration.
As the carbon tax is lifted, Canadians can also expect to see changes reflected in their home heating bills and food prices, although these adjustments may take longer to manifest. Families, particularly those in Ontario, can anticipate their final carbon tax rebate starting April 22, 2025, with a typical family of four expected to receive about $300.
This sweeping change in fuel pricing marks a significant shift in the Canadian government's approach to carbon pricing and its impact on everyday consumers. While the intention behind the carbon tax was to encourage a transition to sustainable energy practices, the immediate economic pressures faced by Canadians have prompted a reevaluation of such policies.
As gas prices continue to fluctuate, the long-term effects of the carbon tax removal on consumer behavior and environmental policy remain to be seen. For now, drivers across Canada are enjoying the benefits of lower fuel costs, a welcome relief as they navigate the challenges of daily life.
