Quebec plans to remove floor price for gas in hopes of increasing competition

While the federal government’s removal of the carbon tax has lowered gas prices elsewhere in the country, Quebec is banking on increased competition to lower costs at the pump for Quebec drivers.

“What we’ve seen is the gas prices have been going down elsewhere in Canada. And in Quebec, they decided to actually keep that process — it’s not actually a carbon tax, it’s a more complex system that we have in Quebec,” said Nicolas Ryan, the director of public affairs at CAA-Québec. “And the government for now, they decided to keep it as is. We have to know that this money that’s being collected with that tax, actually is supposed to be going to project reducing gas emissions in Quebec,”

Patrick de Haan, the head of petroleum analytics at Gas Buddy, added, “Quebec’s provincial carbon tax has now pushed Quebec to be the most expensive province when it comes to filling your tank in Canada.”

Minister of Economy and Energy Christine Fréchette announced Monday that she will table an amendment to Bill 69 to remove the minimum price for gasoline and other fuels.

It means that gas stations could decide to mark their prices how they want to.

“Whenever that law is going to be in effect, well, then you could see, let’s say, a station saying, ‘Every Thursday, I’m going to put the price 30 cents lower, and I’m going to get a bigger share of market.’ So that’s what we think could happen,” predicted Ryan.

The Legault government thus aims to “encourage competition and, ultimately, ensure that consumers pay the best possible price at the pump.”

“We still need to see where it goes, but paying less for gas and not having a minimum, I think that would be good,” said Montreal driver, Chloe Lefebvre.

“Gas prices in Quebec are really high,” said driver Sanchid Gopal. “I recently went to Ontario, like Toronto last week. So, over there, the prices were pretty affordable. I think for working class, it’s too much.”

Two weeks ago, the federal government ended its carbon pricing for consumers, which led to a drop in gas prices.

However, Quebec was not affected by this change, as it has its own carbon market system, in which California also participates.

At 1:30 p.m. on Monday, the best gas price in Montreal was in Anjou at $1.49 a litre. In LaSalle, it was $1.56, and earlier in the day on Maisonneuve and De Lorimier it was at $1.57.

The best prices in the province were seen in Gatineau at $1.38, compared to Ontario’s best at a $1 per litre.

“I wish it was like that,” said Gerald Constant, a Montrealer. “Whenever I go to Ontario, I fill up my car before coming back to Quebec.”

Asked about the possibility of Quebec following suit by ending its carbon price, Premier François Legault did not comment directly, but added: “We definitely have to be competitive.”

Legault said he wanted to wait for the results of the next federal election before making a decision, since the main parties had made different promises regarding the “carbon tax.”

The government announced the removal of the gasoline price floor last year. It will ultimately be implemented through an amendment to Bill 69, which is currently under review.

According to Quebec, “the current mechanism limits competition between retailers and, consequently, leads to higher prices in the long term.”

“The floor price, introduced in the 1990s, no longer has its place,” argued Samuel Poulin, Member of Parliament for Beauce-Sud and Parliamentary Assistant to Minister Fréchette for Economy and Energy, in a press release.

“The Federal Competition Bureau will also have additional tools to monitor prices in each region,” he said.

The government will also require retailers to report any changes in gasoline prices in real time to the Régie de l’énergie, which will make this information available on its website.

“Retailers are likely the least profitable of anyone up the stream,” De Haan explained. “Typically, the government is collecting far more tax than the retailer makes. So, the improvement here would be if the Quebec carbon tax would be scrapped, rather than altering a policy that is likely to have a very minute impact if any at all.”

“We’d be talking about maybe competition pushing prices down by maybe a penny or two a litre compared to the provincial carbon tax. It’s 17.6 cents a litre. That’s far more significant,” he added.

Bill 69, a sweeping reform of the energy sector, was introduced last year by former Minister of Economy and Energy Pierre Fitzgibbon.

Since his resignation last September, Minister Fréchette has been leading the initiative.

“Everything cent can make a difference,” said Lefebvre. “I;m the kind of person who has to to count and make sure that I don’t spend too much on gas and not having enough money to go to work — it’s kind of a big deal. So yeah, 50 cents sometimes can make the whole difference.”

-With files from The Canadian Press