Quebec becomes last province to have carbon price

As Quebec becomes the last province in Canada to have not yet given up on carbon pricing, the provincial government may begin to feel pressure to align itself with the rest of the country.

Quebec has long been reducing the demand for greenhouse gas emissions, and the province’s cap and trading system was launched in 2013, has never been so controversial.

But it is said that Prime Minister Mark Carney’s decision to cancel the federal consumer’s carbon price could change that – especially once Quebecs notice the difference in pumps.

As of Tuesday, federal carbon prices applied in most provinces and territories have been officially scrapped. British Columbia was the first province to impose its own carbon price in 2008, and also abolished its taxes.

When asked whether he should take an internship, Prime Minister François Legault said he would await the results of the April 28 federal election. “We absolutely have to be competitive,” he told reporters during his trip to Germany.

He added that Quebec’s cap and trading system “ultimately costs consumers less than federal carbon prices.”

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However, as federal measures disappear, critics of carbon pricing say it’s only a matter of time before Quebecs start to feel pain. “When we compare prices between Gatineau, Montreal and Ottawa, this difference will cause a staggering amount,” said Carol Montreuil, vice president of the Canadian Fuel Association.

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“I think a lot of people will question whether it’s time to stop the (cap and trading) system.”

He said many Quebecs will “check the government for a break”, especially the tariff burden of U.S. President Donald Trump.

Without carbon prices, it is difficult to accurately predict the comparison of Quebec gasoline prices to other parts of the country. In 2024, federal taxes account for 17.6 cents per liter of natural gas. Quebec’s cap and trading system is related to California, and currently costs about 10 cents per liter.

But Pierre-Olivier Pineau, president of the energy division management of the University of Montreal Business School, warned that people outside Quebec would not necessarily drop 18 cents on Tuesday. “Distributors and service stations will maintain greater profit margins at least during the transition period,” he said.

On March 31, Gasbuddy.com website showed that the average natural gas price in Quebec was about $1.53 per liter, the lowest in the country. The average price in BC is 25 cents higher, about $1.78 per liter.

One thing is clear, said Nicolas Gagnon, president of Quebec, the Canadian Federation of Taxpayers. “Quebec will go from one of the relatively affordable places in the country where natural gas is currently relatively affordable,” he said.

Gagnon hopes to seize this “window of opportunity” to force the Quebec government to cancel its carbon prices.

But Normand Mousseau, a physics professor at the University of Montreal and director of science at the University’s Institute of Energy, noted that there are no major political parties in Quebec who oppose caps and trading systems. Quebecs are unlikely to pay much attention to gasoline prices in neighboring provinces, he said.

“There is a consensus in Quebec that the climate problem is real and we have to do something,” he said. “So, I find it hard to see it become a political problem right now.”

Pino said that if the government does start to feel pressure on carbon pricing, it can always choose to redirect some revenue from the carbon market to taxpayers. Currently, the money is used in Quebec’s electrification and climate change fund for programs to reduce emissions.

This is another way Quebec’s carbon price is different from the federal system, which returns most of its income directly to the household.

But Pineau added that Quebec’s cap and trading system are not one of the reasons why it’s not a political lightning strike, it may be just that it’s more complex than a carbon tax and the cost isn’t obvious.

“If you don’t understand something, it’s hard to object to it,” he said.

& Copy 2025 Canadian Press