Alberta fuel relief plan comes into effect Friday but savings likely won’t be seen, says experts

Alberta’s gas tax relief plan comes into effect April 1, but will you actually see any extra money in your wallet?

The government says it wants to help you save money on fuel costs, so it will suspend the provincial gas tax starting Friday as long as the price of Western Texas Intermediate stays over $90US.

If the government stops collecting the 13-cents per litre gas tax, there’s no guarantee that gasoline companies will pass those savings on to you.

“When we take a look at pricing behaviour, I’m confident that we have enough competition in our retail environment — retail fuel selling environment — that we’ll see these tax reductions, which will be ultimately savings, passed to consumers in Alberta,” Finance Minister Travis Toews said on Monday. “We’ll be monitoring that very closely.”

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Economist Moshe Lander says it’s not likely that you’ll actually save any money on fuel come Friday.

“Why would any gas company pass on that 13-cent saving to consumers? It’s wishful thinking.”

The United Conservative government’s fuel price relief plan is similar to how they tried to reduce insurance rates in the province last year.

The government provided insurance companies with relief, and at the time, Finance Minister Travis Toews said Alberta’s competitive environment would see rates go down because cost pressures would decrease with the relief.

As car insurance rates skyrocket in #Alberta, the UCP tabled a bill aimed at getting prices back down. Their plan includes reforming regulations, giving insurance companies more cost saving opportunities in hopes they pass some savings on to you. #yeg #yyc #Calgary #ableg #abpoli pic.twitter.com/deygw88H4K

— Saif Kaisar (@StaySaif) October 30, 2020

However, most people say their insurance rates have either gone up or stayed the same.

Lander says these types of measures never benefit the consumer.

“It benefits the insurance companies, it benefits the gasoline companies, and I’m not entirely sure there was ever the intention of benefiting the consumer. You win optics, you win the headlines that you’re going to do something, and when nothing actually materializes, then you can just shrug it off and say well it’s the insurance companies’ fault, or it’s the gasoline companies’ fault.”

When CityNews asked Lander what we can expect with the suspension of the provincial gas tax Friday, he laughed and responded, “Nothing is going to happen; everybody is going to hope there’s going to be like a 13-cent reduction.”

He says it’s unlikely gasoline companies will be benevolent and pass any savings on to consumers.

Lander does note if the province wanted to really provide people with relief, it should have done a rebate program.

He suggests the government should allow people to either mail-in receipts, bring them into registries, or make it a tax credit for the next tax season.