Southeast Saskatchewan residents and Canadians across the country are in for a rough ride come 2025 according to Canadians for Affordable Energy President Dan McTeague. 

This comes after the federal government implemented new fuel regulations on July 1, which aim to reduce carbon emissions by replacing the more polluting fossil fuels with cleaner alternatives by 2030. 

“Fasten your seatbelts,” says McTeague. “The price of gasoline and diesel will continue to be extraordinarily expensive, regardless of what the markets do. The Government of Canada is committing to raising the price to levels that I think most will find very uncomfortable.” 

This is different from the Carbon Tax, which comes into effect every April 1. This past April, the Carbon Tax increased to $65/tonne, up $15/tonne from 2022.  

The Clean Fuel Regulations (previously the Clean Fuel Standard), puts pressure on fuel refineries to begin producing cleaner and less carbon-emitting fuels. 

Refineries have up to a year to comply with the new regulations before penalties begin to come into effect. By 2030 the regulations require a 15 per cent decrease in emissions from 2016 levels. 

McTeague says that refineries have two options to meet that 15 per cent emission reduction. The first is to add ethanol to the gasoline they produce. The cavoite with increasing the ethanol content is that product isn’t always readily available in Canada.  

“So, it’s not Canadian farmers or processors that will benefit, although some do, most of it comes from the United States,” adds McTeague. 

With most of the ethanol being transported to Canada, that will increase the cost to make the fuel, along with the additional equipment needed to produce cleaner fuel all comes at a cost, which consumers will see at the pumps between 2025 and 2030. 

The second option for producers is to go to the Carbon Credit Market to acquire credits, which would show the federal government that they are reducing carbon emissions.  

It’s also possible others can also earn credits through investments they make into, for example, electric vehicle charging stations, which they can sell to producers.  

Refineries in Saskatchewan have already switched to begin producing cleaner fuel, but McTeague says the Maritimes is a different story. On July 1, gasoline prices within the Maritimes jumped by 11 to 14 cents per litre.  

Though this Carbon Tax 2.0 came into effect on July 1, consumers in Saskatchewan and across the prairies, British Columbia, and parts of Ontario won’t see any real change in fuel prices until 2025, which is when the previously mentioned options essentially begin.  

“From 2025 to 2030 look for the second Carbon Tax to increase prices by 17 to 30 cents per litre.” 

The major difference they will notice right now will be an increase in ethanol in their fuel. 

McTeague estimates that this second Carbon Tax will remove roughly $9 billion in economic activity from Canada. In addition, it would add approximately $1,277 in additional costs to every Canadian worker by 2023.  

Then on top of that the original Carbon Tax will continue to increase fuel even more making it unaffordable to Canadians by 2030.