Higgs says 2022 law change not meant to benefit oil companies 'at all'

On June 30, gas in Saint John, N.B., could be found just below $1.60 per litre.

Following the implementation of the carbon tax on July 1 and the introduction of new clean fuel regulations on July 7, gas in the port city now averages $1.70, still cheaper than the provincial maximum of $1.74.

The price jump is as expected with the New Brunswick’s Energy and Utilities Board new clean fuel regulations carbon adjuster of 6.17 cents on gasoline plus another 0.93 cents of HST on the adjuster, a total jump of over seven cents.

The remaining two cent increase consumers in New Brunswick saw Friday would come from the benchmark market price of the product.

“What’s happening in this clean fuel or carbon adjuster that has come into play has never been done anywhere else in the world,” says Atlantica Centre for Energy President Michelle Robichaud. “It’s extremely complex, and at the end of the day, it is meant to help increase that price so that we reduce our reliance on carbon emitting products.”

The good news is Maritimers shouldn’t expect another massive jump like they have the past two weeks. Robichaud says prices will vary by a few cents week in and week out, which is nothing new for those living in this part of the country.

“These adjustments will come into play probably every week,” says Robichaud. “And we have to remember that the benchmark market price that we use is really what we use for setting our baseline for our prices at the pumps. It is really critical for all governments to understand that in order to keep us on that path to net zero, it has to affordable and it has to be understood by Atlantic Canadians.”

“The only thing this did was recognize a new Canadian tax being imposed upon the industry so what it did was protect retailers.” says New Brunswick Premier Blaine Higgs in reference to the new carbon adjuster. “It had nothing to do with ability for refiners in New Brunswick to pass on that price to consumers.”

On Saturday, the New Brunswick leader released a statement providing clarity to his province on the new clean fuel regulations.

University of New Brunswick politics professor J.P. Lewis found the timing of the premier’s release interesting.

“It’s not just about the public policy we are talking about,” says Lewis. “But one way to turn the page on people focusing on squabbles within your own party caucus and party is to find a new political fight. That political fight is with the federal government and the prime minister.”

While the clean fuel regulations are imposed by the federal government, the New Brunswick government changed legislation in December 2022 to pass the extra cost to consumers. The statement cites a potentially devastating impact on small family-owned gas stations.

“This wasn’t to help the oil companies at all,” Higgs insists. “It was to ensure the retailers would have a margin that they had for a long time in the formula. Because this was a new tax being imposed upon them, now that would eat into their ability to run their service station."

Carbon tax credits are set to come to oil companies to help invest in environmentally-friendly improvements. Higgs notes those credits have yet to be available to New Brunswick refiners, who he says are second to none already in Canada when it comes to cleaner practices.

“Do you know what the option is if we ignore that?” Higgs says if companies can’t get the carbon credits to help improve practices. “They will buy from other countries like India or the Middle East and other countries that don’t have these emissions at all.”

“We are putting ourselves in a real box here that doesn’t necessarily change the consumption rates, but it does indeed change the cost of living and working in Atlantic Canada.”

The New Brunswick leader is currently in Winnipeg, M.B., for the annual premier’s meeting. Higgs says he, along with the other three Atlantic premiers, will continue to fight against the new regulations imposed on Atlantic Canadians.

“We argued against the additional clean fuel standards tax because we get hit harder in Atlantic Canada,” says Higgs. “Because we don’t have the big transportation systems throughout our provinces, and we do a lot of travelling just to move around in rural Atlantic Canada.”

The four Atlantic Canadian premiers have previously sent a joint letter to Prime Minister Justin Trudeau on their concerns as it relates to the new federal regulations.