Quebec first Canadian province to collect a carbon tax

The province of Quebec is making what some might call a bold move in the war against carbon and traditional energy sources. In October 2007, the Quebec government will impose a tax on both gasoline and diesel fuels (0.8 cents and 0.9 cents respectively).

Not surprisingly, the government has indicated that it expects (or “hopes”) energy companies to cover the additional $200 million in annual costs, rather than passing them on to consumers. The government has also noted that they will use the increased tax revenue to bolster social services such as public transit.

Quebec will implement Canada’s first carbon tax in October, collecting just under one cent a litre from petroleum companies in the province, which will raise about $200 million a year to pay for energy-saving initiatives such as improvements to public transit.

The tax will amount to 0.8 cents on every litre of gas sold in Quebec, and 0.9 cents on each litre of diesel fuel.

About 50 companies will be affected by the tax.

Oil companies will be hardest hit. They will pay about $69 million a year for gasoline, $36 million for diesel fuel, and $43 million for heating oil.

Natural gas distributors will pay about $39 million, while electricity distributor Hydro-Québec will pay $4.5 million for its thermal energy plant in Tracy, Que.

Natural Resources Minister Claude Béchard said Wednesday he hopes the petroleum industry will pay the tax without passing on the cost to drivers when they fill up their cars at the pump.

I discussed the issue of cap & trade for CO2 in the Fall 2005 edition of American Coal (pg. 29).

13. June 2007 by
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