New Brunswick has passed two pieces of legislation, one cutting the provincial tax on gasoline and motive fuel, the other imposing a $30 per tonne carbon tax on fuel, both effective April 1, 2020. The net result? New Brunswickers will see a rise in fuel prices, but only by two cents per litre in 2020-21.
The reductions are part of the made-in-New Brunswick carbon tax announced in December 2019. The New Brunswick carbon tax is the alternative to the federal government’s backstop carbon tax. New Brunswick is currently under the federal backstop, and that tax is slated to rise to $30 per tonne on April 1, 2020.
New Brunswick has argued that its heavily rural economy was disadvantaged by the federal carbon tax because its residents do not have the alternative of driving less or using public transport.
Though the federal government has not yet formally stated that it accepts New Brunswick’s plan of adding a carbon tax, but cutting the provincial fuel tax, the quick passage of Bill 30 and Bill 32 by the provincial Legislature strongly suggests that it has.
Effective April 1, 2020, the gasoline tax will decrease from 15.5 cents per litre to 10.87 cents per litre and the motive fuel tax will decrease from 21.5 cents per litre to 15.45 cents per litre under amendments found in Bill 32. Simultaneously, a carbon tax will be applied to 20 separate fuels under amendments found in Bill 30.
The federal backstop requires increases in the carbon tax to $40 per tonne on April 1, 2021 and to $50 per tonne on April 1, 2022. New Brunswick’s Bill 30 makes no provision for annual increases. Any subsequent hikes in the carbon tax will require a separate piece of legislation.
“Our made-in-New Brunswick carbon tax is fair and will achieve results,” said Finance and Treasury Board Minister Ernie Steeves in a statement. “It brings parity to fuel prices in other Atlantic provinces to New Brunswick consumers, businesses, and industry. It also recognizes our unique economic realities, and it will help us to reach the federal government’s emissions targets.”