A raft of provincial and national legislation was unveiled this past week that will impact gas prices and climate change.

The Ontario government announced that it intends to make a cut to the provincial gas tax for the first time in 30 years.

The bill will trim the tax on gasoline by 5.7 cents per litre and the fuel tax (which includes diesel) by 5.3 cents per litre.

This change will not come into effect until July 1, a month after the provincial election on June 2, and would see the gas tax collected by the Ford government fall from 14.7 to 9 cents per litre.

Minister of Finance, Peter Bethlenfalvy, cited the rising cost of living due to “ongoing supply chain challenges and geopolitical conflicts” as the impetus for the bill.

“With these added pressures, families, and businesses need extra help to keep costs low,” the minister said.

The government expects the cut, along with the recent elimination of renewal fees for licence plates, to save Ontario households about $465 this year. But while dropping licence plate fees is permanent, the cut to the gas tax is planned for only six months.

Forecasters see the cut costing the government around $650 million in 2022. The two cents per litre of the tax dedicated to “improve and expand” public transit across Ontario will not be impacted.

The new Ontario bill follows on the heels of the announcement by Alberta Premier Jason Kenney to pause the collection of the gas tax in that province, which is 13 cents per litre, until oil prices become more manageable.

Both bills are an attempt to mitigate the rising gas prices felt by drivers around the country for weeks now, in part due to fuel shortages caused by the war in Ukraine.

But the legislation in Ontario and Alberta is also a response to the federal carbon tax (i.e. carbon pricing) which rose 2.2 cents per litre on April 1 to a total of 11.05 cents per litre.

The Alberta bill was timed to begin on the same day; while the Ontario government, in introducing its new bill, called on the Feds to follow suit and slash the federal carbon tax.

These decisions are taking place amid the first serious energy crisis since the 1970s, which has changed the calculus of the renewable energy movement, with demand for oil rising.

But the other backdrop is the IPCC report released this past week, which all but acknowledges that any hope of limiting warming to 1.5°C has been lost. That goal, set out in the Paris agreement, will not be met because of “a litany of broken climate promises,” according to UN Secretary General Antonio Guterres.

Therein lies the challenge for climate activists and decision-makers.

The Ukraine war has created a situation in which governments are looking to alleviate the price crunch and financial pain faced by consumers. But some analysts see such tax cuts as a way of subsidizing a booming oil and gas industry, and opening the door to more production, even as the IPCC, among others, calls for an immediate production halt.

In the balance are the political and economic threat caused by the energy squeeze and the existential threat of climate change.

Some observers are seeking a middle ground, wherein the climate fight is not ignored, simply kicked down the road.

A report authored by Deloitte Canada calls for a more gradual transition away from fossil fuels, with an increase of oil and gas production in the short term to address the current geopolitical crisis.

Others have questioned the effectiveness of a carbon tax at reducing emissions.

The carbon tax “is not a useful tool for getting Canada to meet its Paris pledge,” Jessica Green, professor of political science at the University of Toronto School of the Environment, told The Weather Network (TWN).

“Instead, the country should be investing in developing more renewable energy capacity, as well as the grids and infrastructure to deliver it,” Professor Green added.

Such investment would require the funds, of course, which a carbon tax could help provide. And though these taxes remain politically unpopular, others argue that governments can protect consumers without abandoning the infrastructure of carbon pricing.

“Instead of delaying the carbon tax increase or reducing prices at the pump, governments could provide targeted rebates to those most vulnerable,” Kathryn Harrison, professor of political science at the University of British Columbia, told TWN.

“And consider taxing windfall profits of oil companies as a result of the Ukraine invasion to pay for that,” Harrison added.

Dan Woynillowicz, director of energy policy firm Polaris Strategy and Insights, agreed. “The war in Ukraine doesn’t justify eliminating, freezing, or reducing the price on carbon pollution,” he told TWN.

“We can’t afford to stop working to address the climate emergency because there’s another emergency in Europe — we have to address both.”

“If anything, the war in Ukraine and its impact on oil and natural gas prices is a reminder of the volatility of these fossil fuel commodities and reinforces the benefits — economic and environmental — of accelerating our shift away from fossil fuel energy,” he added.

Indeed, achieving this shift — and the energy infrastructure shift Professor Green advocates — would go a long way to taking the steam out of this issue by reducing the nation’s dependence on fossil fuels. So too would a growing fleet of electric vehicles (EVs).

One step in that direction was taken with the release of the federal budget on April 7, which saw $1.7 billion earmarked for an incentive program for EVs.

In the meantime what seems certain, as demonstrated by the IPCC report, is that there will always be short term political obstacles to addressing climate change.

This sentiment was echoed last week by Minister of the Environment Steven Guilbeault, who opposed the gas tax cuts, noting that they “[go] against our efforts to fight climate change.”

“We shouldn’t lose sight of the fact that we’ve gone through a pandemic, there’s a terrible crisis happening in Ukraine, we’re seeing inflation,” Guilbeault said.

“But all of these crises will go, and climate change will still be there, and climate change is killing people in Canada. They’re just going for the easy solution, and probably one that is short-term in terms of political popularity,” the minister added.

Professor Harrison agreed. “The climate crisis is not on pause during the Ukraine war, just as it wasn’t during the pandemic.”

Thumbnail credit: Xavier Lorenzo/ Moment/ Getty Images