Vehicle are shown gas station north of Newcastle, Ont. on Wednesday April 1, 2025. The Canadian Press
As Canadians grapple with persistent cost-of-living pressures, fuel prices are once again under scrutiny. While Ottawa eliminated the federal consumer carbon tax last year, a taxpayers’ group says drivers may still be paying more at the pump because of another climate policy quietly shaping fuel costs.
The Canadian Taxpayers Federation (CTF) argues that the federal Clean Fuel Regulations, introduced in 2023, are effectively adding to gasoline prices across the country — without the rebates that once accompanied the carbon tax.
At gas stations in Calgary and other cities, drivers say even modest increases hurt at a time when household budgets are already stretched.
“The cost has really gone up for most things, whether it’s groceries or fuel,” said Calgary driver Ali Mazher. “It all adds up.”
What the Clean Fuel Regulations Do
The Clean Fuel Regulations require fuel producers and importers to gradually lower the carbon intensity of gasoline and diesel sold in Canada. Companies that fail to meet the targets must purchase compliance credits from others who exceed the requirements.
According to the federal government, the policy is designed to encourage cleaner fuel production and reduce emissions over time. But critics say the added compliance costs are being passed down to consumers.
Unlike the former consumer carbon tax, the Clean Fuel Regulations do not come with household rebates.
Taxpayers Group Warns of Rising Costs
Franco Terrazzano, federal director of the Canadian Taxpayers Federation, says the organization’s analysis is based on projections from the Parliamentary Budget Officer.
“The hidden carbon tax will add up to seven cents per litre of gas this year,” Terrazzano said. “As these regulations are fully implemented by 2030, they could increase gas prices by as much as 17 cents per litre.”
The federation estimates that by the end of the decade, the policy could cost the average Canadian household between $384 and $1,157 annually, depending on the province. It also cites federal records suggesting the regulations could impose up to $9 billion in economic costs nationwide by 2030.
CTV News sought comment from the federal government on the claims but did not receive a response by deadline.
Climate Advocates Push Back
Environmental groups dispute the idea that the Clean Fuel Regulations are significantly driving up fuel prices. They argue that cost estimates referenced by critics rely on assumptions that no longer reflect current market conditions.
“This is relying on outdated analysis,” said Thomas Green, senior climate policy adviser with the David Suzuki Foundation. “Now that the regulations are in effect, we’re seeing credit prices trade and clean fuel production ramp up in Canada.”
Green says early projections assumed fuel producers would make no operational changes, an assumption he believes has proven incorrect as companies adapt to the new system.
Mixed Reaction From Drivers
Among drivers, opinions remain divided. Some feel consumers are unfairly absorbing costs tied to climate policies.
“Because the cost gets passed down to us, I don’t think we should be responsible,” said Emmanuel Atika, another Calgary motorist.
Others say the issue is more complex. “If you go to the producer, they’ll say they have to recover the cost,” Mazher said. “If you ask me, I’ll say why should I pay? We need to look at the situation holistically. There is no simple answer.”
Where Gas Prices Stand Now
According to GasBuddy, the national average gas price currently sits at about $1.28 per litre. Analysts say prices could drift slightly lower through the rest of the month, barring major geopolitical developments that might disrupt global oil markets.
Still, with fuel affordability closely tied to broader inflation concerns, debate over the Clean Fuel Regulations is likely to intensify — especially as Canadians watch for any further changes at the pump.
