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B.C. gas prices top $2 despite federal tax holiday
BY: - Curated by co-pilot - MSN.COM
Gasoline prices in British Columbia have surged past $2 per litre, with Vancouver averaging $2.193, despite a federal excise tax suspension meant to ease costs. Economists warn the relief is minimal as global oil shocks from the Middle East conflict keep prices high. The situation underscores Canada's exposure to volatile international energy markets despite being a major producer.
B.C. fuel costs hit new highs
British Columbia's average gas price surged to $2.041 per litre, with Vancouver topping $2.193, according to GasBuddy data. This follows a nationwide rise driven by crude oil surpassing US$100 a barrel, with some regions experiencing over 50¢ increases since December. The spike comes despite Ottawa's suspension of the federal excise tax until September, a measure expected to cost $2.4 billion but offering limited consumer relief.
"It's a few cents, and gas prices have risen by a whole lot more and are very likely to rise even further. So the relief is limited, and temporary, and it really can't really offset what's happening in the market."
A New Westminster gas station showed a price of 222.9 cents per litre on Friday, as the average price of gas across B.C. was recorded at more than $2 per litre.
Why tax cuts can't beat global shocks
Economists stress that domestic tax holidays cannot counteract global oil market disruptions, such as the Strait of Hormuz closure amid the U.S.-Israel conflict with Iran. Werner Antweiler notes the relief is temporary and small compared to price jumps, as Canada's fuel market is deeply integrated with global supply chains. Rising crude prices and refining costs mean Canadian drivers pay for global uncertainty in real time, regardless of domestic production capacity.
Ripple effects on households and services
The fuel surge is squeezing households, businesses, and essential services. Saskatchewan's medical transport providers report higher daily costs, while airlines like Air Canada are trimming routes, raising fares, and adding surcharges to offset nearly doubled fuel expenses. Canadians now spend an average of $231 monthly on fuel, pushing car ownership costs higher and leaving less room for savings or discretionary spending.
Potential scenarios for fuel prices
In the short term, prices could climb further if crude remains volatile into peak driving season, with tax relief only softening the blow. Over the longer term, gradual easing of oil prices and temporary tax cuts could bring moderate relief, but geopolitical risks and infrastructure constraints may keep prices elevated. A counterfactual scenario where the Strait of Hormuz had remained open suggests that the current scale of price spikes might have been avoided.
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Source: B.C. gas prices top $2 despite federal tax holiday
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