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A customer fills up at an Esso gas station in downtown Edmonton. Alberta’s gas tax holiday begins on Thursday amid high energy prices fuelled by war in the Middle East.Amanda Erickson/The Globe and Mail
Albertans filling their tanks may soon be saving cash as the province’s gas tax holiday starts today.
Premier Danielle Smith’s government is pausing its tax of 13 cents per litre on gasoline and diesel until the end of the year to ease the pressure of high everyday costs.
It comes as the oil-rich province’s treasury reaps the benefit of steep global energy prices.
Eligible adults also have until the end of October to apply online for $100 fuel tax rebates that started rolling out in July.
Smith had said the province went with payments out of concern that tax cuts don’t always get passed on to consumers.
Danielle Smith to cut millions of Alberta residents $100 cheques amid windfall oil revenues
Smith later acknowledged Albertans weren’t happy with the rebate program.
The online application portal was criticized by some as invasive and onerous, although the government tweaked the process to try to make it smoother.
On the heals of a projected $2-billion budget surplus, Smith ditched the rebate, and reverted to cutting the fuel tax until the end of the year.
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Premier Danielle Smith arrives to speak to reporters in Charlottetown in July. The gas tax suspension is expected to cost her government $350-million in revenue, while it benefits from high global energy prices.Darren Calabrese/The Canadian Press
Alberta’s fuel tax suspension will cost government coffers far more than the rebate. The province estimates it will forego $350-million in revenue in the coming three months.
Nearly 3.4 million adult Albertans are eligible for the rebate, but Finance Minister Jason Nixon said Wednesday only about 1.5 million people have applied.
Nixon previously said he’s not entirely confident the tax cut will be passed on to consumers.
But he has said the low number of rebate applications made it clear the government couldn’t dole out the cash efficiently.
The federal government has also stepped up to try to help Canadians dealing with the high cost of living.
Tony Keller: The federal gas tax cut: Great politics and a terrible investment
It has extended its fuel excise tax relief until the end of January, which is expected to save drivers up to 10 cents a litre on gas, or four cents per litre on diesel.
Albertans are already paying less, on average, than drivers across the country.
On Wednesday, the Canadian Automobile Association pegged the average price of gas in Canada at $1.77 per litre. The gas price tracking website GasBuddy, as of Wednesday afternoon, estimated Alberta’s average to be $1.67 per litre.
Fuel prices have soared since the U.S. war on Iran began in late February, choking the Strait of Hormuz, a vital shipping lane at the mouth of the Persian Gulf.
The impact has turned Alberta’s finances around.
Its budget is heavily dependent on oil exports, and before the conflict in the Middle East, was predicting a $9.4-billion deficit this fiscal year.