CanadaCongratulations, you saved $4: Why the pre-carbon tax fill-up rush was a colossal waste of time

23:35  01 april  2019
23:35  01 april  2019 Source:   nationalpost.com

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Congratulations, you saved $4: Why the pre-carbon tax fill-up rush was a colossal waste of time© Twitter.com Conservative leader Andrew Scheer solemnly stares into the middle distance as he fuels up his vehicle one last time before the carbon tax.

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All across Canada on Sunday, conservative politicians urged drivers to rush to the pumps before the Liberal-enacted carbon tax kicked in at midnight.

In most cases, though, the per-tank savings was so small that it almost certainly didn’t justify the time and expense needed to make a dedicated trip to the gas station.

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Federal Conservative leader Andrew Scheer sent a text message to supporters reminding them to “fill your tank!”

Wrote Saskatchewan premier in a Twitter post, “Fill up your truck. The carbon tax is coming.”

In Ontario, virtually the entire Progressive Conservative caucus posted selfies of themselves making one last fill-up before the tax.

For dramatic effect, Deepak Anand posted a slow-motion video of the “precious moment” when he removed the nozzle from his last carbon tax-free fillup.

On April 1, the federal carbon tax kicked in for Saskatchewan, Manitoba, Ontario and New Brunswick; all of which have refused to implement provincial carbon pricing plans. For gasoline, the tax is equivalent to 4.4 cents per litre, rising to 11 cents by 2022.

On the whole, the carbon tax collected will be quite substantial, with revenue for the rest of 2019 expected at $2.3 billion, much of which is expected to be returned in the form of rebates. However, even for cars with big gas tanks, the immediate effect is only a few dollars per fill-up.

Ontario MPP Amarjot Sandhu photographed himself filling up a Chevy Tahoe, a vehicle with a fuel tank of roughly 98 litres. Even if he drove into the gas station on fumes, his maximum tax savings are $4.31.

If Sandhu was planning to fill up on Sunday anyway, this is a free four dollars. However, the savings get much more skewed if drivers waited in line for the pump or made dedicated trips to the gas station.

The average Canadian’s time is not free.

According to Statistics Canada, the average Canadian worker’s time is worth $27.70 per hour. At that rate, any Tahoe driver who waited more than nine minutes for gas on Sunday effectively wasted more than $4.31 of their time. Even at the Ontario minimum wage of $14 per hour, anything longer than an 18-minute wait would be a net loss of productivity.

The Tahoe also burns roughly one litre of fuel for every six kilometres travelled. If Sandhu’s trip to the gas station was more than 12 kilometres one way, any savings were burned up by the time he got home.

And the Chevy Tahoe has a pretty big tank. Canada’s most popular sedan last year was the Honda Civic, a car with a fuel tank capacity of about 47 litres. In that case, the absolute maximum tax savings is only $2.07.

Gas prices are also so inherently volatile that, in many places, they actually went down by Monday morning even when accounting for the carbon tax.

Gasoline is priced according to four main factors: Crude oil prices, refining costs, retail markup and a battery of taxes including HST, federal excise tax and municipal taxes. In Ontario, for instance, drivers already pay a province-specific tax of 14.7 cents per litre.

Even when the carbon tax was added, other factors such as a lower wholesale price or a slashed post-weekend retail markup may have nevertheless allowed the price to drop.

Scheer photographed himself filling up at 115.9 at what is presumably an Ottawa gas station. By Monday, data from GasBuddy.com showed that Ottawa gas could be had for as little as 106.9.

Lorne Coe, MPP for Whitby, photographed himself filling up at 115.6. Monday morning, some Whitby gas stations had prices at 113.9.

Greg Rickford, MPP for Kenora-Rainy River, noted that prices were jumping even without extra taxes. On the day before the carbon tax was applied, prices spontaneously jumped from 119.9 to 129.9.

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Prices did indeed go up at many stations after the carbon tax came in, but it was usually by a factor much higher than whatever was owed to the carbon tax.

Markham-Unionville MPP Billy Pang stayed up until midnight to catch Monday’s price change. In an instant, the price went from 108.9 to 124.9.

While Pang attributed this to the “impact of the New Federal Carbon Tax,” 11.6 cents of the price hike are still owed to the gas station owners, the refinery and the fluctuations of the world oil market

• Twitter: TristinHopper | Email: thopper@nationalpost.com

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