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“There’s a global market and those countries that have lots of oil and gas see their prices go up alongside with those who don’t have that oil and gas, it’s the same shifts up in prices in the United States as well,” Carney said.
Conservative Leader Pierre Poilievre has written to the prime minister to reiterate his call to pause federal taxes on fuel.
In a letter shared on social media, Poilievre said Ottawa should send revenue windfalls from the recent surge in fuel prices caused by the war in the Middle East back into the pockets of voters.
“Canadians have been pinching their pennies long enough. It is time for your bloated government to pinch pennies for a change,” he wrote.
“This is no time for greedy government to fill its pockets while making the people poor.”
In the letter, Poilievre cited Liberal economic advisor Tyler Meredith’s claim that every $10 increase in the price of a barrel of oil would generate an extra $2 billion in additional revenue for the federal government. The extra money comes from increased income tax generated by the oil industry.
Oil prices have surged since the U.S. and Israel attacked Iran on Feb. 28, and according to oilprices.com, Western Canadian Select is selling for over $100 a barrel, up from $45 just last year.
Poilievre said that translates to close to $9 or $10 billion in additional annual revenue if these prices are sustained, and could cover the cost of his proposal to suspend federal taxes on gas and diesel until the end of 2026.
The Conservatives said that suspending the federal fuel excise tax and GST on gas and diesel — as well as permanently eliminating the clean fuel standard tax and industrial carbon tax — would save Canadians about 25 cents per litre on gasoline and 21 cents per litre on diesel.
“This would not only help drivers. Lower diesel prices would reduce the cost of shipping food, homebuilding materials and other essential goods across the country, lowering costs throughout the economy,” Poilievre wrote.
The Canadian Automobile Association gas price tracker said on Tuesday prices across Canada averaged more than $1.80 per litre, compared with about $1.32 a year ago and $1.51 on March 7.
Prime Minister Mark Carney Carney said at a press conference on Tuesday that his government wants to help “cushion the blow” for Canadians.
“There’s a global market and those countries that have lots of oil and gas see their prices go up alongside with those who don’t have that oil and gas, it’s the same shifts up in prices in the United States as well,” Carney said.
“The question becomes, and this is what the government’s focused on, is how long is this going to persist and what can we do to help cushion the blow for Canadians, and that’s something we’re looking at.”
The conflict has cut off flows of crude through the critical Strait of Hormuz and shut down energy production across parts of the Middle East. About one-fifth of the world’s oil supply comes through that strait, which connects the Persian Gulf to the Gulf of Oman, and then the Arabian Sea.
with files from the Canadian Press
