Carbon tax bumps up gas prices in 4 provinces — will it change consumer behaviour?

Click to play video: 'Federal carbon tax starts for ON, SK, MB & NB'
Federal carbon tax starts for ON, SK, MB & NB
WATCH ABOVE: Federal carbon tax starts for Ontario, Saskatchewan, Manitoba and New Brunswick – Mar 31, 2019

Gas prices went up for consumers in Saskatchewan, Manitoba, Ontario and New Brunswick on Monday as the federal carbon tax kicked in.

The tax has drawn heat from across the country, from politicians and Canadians in general, who say it will harm the economy and put too much of a financial burden on consumers.

READ MORE: Federal carbon tax kicks in for Ontario, Saskatchewan, Manitoba and New Brunswick

Conservative Leader Andrew Scheer has been one of the most vocal opponents, repeatedly calling the move a “tax grab.” On Monday, Scheer spoke in New Brunswick saying he’ll scrap the tax if he becomes prime minister.

Meanwhile, Prime Minister Justin Trudeau has defended the move and said it’s necessary in the fight against climate change.

Story continues below advertisement

Here’s a look at how much the price hike will be — and whether it will actually change consumer behaviour.

WATCH: Andrew Scheer says Conservative climate plan to be unveiled before election

Click to play video: 'Andrew Scheer says Conservative climate plan to be unveiled before election'
Andrew Scheer says Conservative climate plan to be unveiled before election

How much did prices go up?

The federal tax is $20 a tonne for this year and is set to increase by $10 annually until it reaches $50 a tonne in April 2022.

The starting rate adds 4.4 cents to the price of a litre of gas, about four cents to a cubic metre of natural gas, and also drives up the cost of propane, butane and aviation fuel.

Dan McTeague of GasBuddy told Global News that drivers saw a net increase of about five cents a litre on Monday morning, and that a further bump is expected.

Story continues below advertisement

“Next week, we shift to summer gasoline and that always has a five-cent increase for drivers,” he said.

Financial news and insights delivered to your email every Saturday.

Danny Harvey, a professor in the University of Toronto’s geography department, explained to Global News that the government hopes hiking costs associated with high carbon-dioxide-emitting fuel and energy sources will make it more enticing for people to use greener cars and to better insulate their homes.

“We’re sort of nudging people in a different direction,” Harvey said.

WATCH: Doug Ford rails against federal carbon tax

Click to play video: 'Doug Ford rails against federal carbon tax'
Doug Ford rails against federal carbon tax

Will it actually change consumer behaviour?

Even once the tax reaches $50 per tonne in 2022, Harvey says it’s unlikely to induce widespread change on its own.

Story continues below advertisement

That tax level would only add between 10 and 12 cents per litre to the price of gas, he says.

“To get a wholesale shift to more efficient vehicles and to get industry to shift … it’s going to have to rise to $100 or $200 a tonne.”

In other words, the cost to fill up has to jump substantially if people are going to trade in gas guzzlers.

Another expert suggested it could impact consumer behaviour, but not necessarily lead to them switching to greener options.

LISTEN: Guest host Ed Keenan chats with Dan McTeague of about what the carbon tax will really do to gas prices.

Carol Montreuil of the Canadian Fuels Association said the patchwork system of carbon pricing plans across the country is especially pronounced in the Atlantic region — and that could lead people to cross borders for cheaper gas.

Story continues below advertisement

“People are very, very sensitive to retail prices,” Montreuil said.

What Canadians are saying

An exclusive Ipsos poll conducted by Global News in December also found that, as Harvey suggested, prices will have to go up a lot more to change their buying decisions.

Fewer than one in five Canadians said gas prices between $1 and $1.25 a litre would prompt them to switch to a more fuel-efficient car — or find alternate modes of transportation.

READ MORE: Trudeau’s carbon tax on gas won’t motivate Canadians to switch to fuel-efficient transportation, Ipsos poll finds 

WATCH: Premier Doug Ford vows to continue battling carbon tax. Travis Dhanraj reports.

Click to play video: 'Premier Doug Ford vows to continue battling carbon tax'
Premier Doug Ford vows to continue battling carbon tax

The gas price range that most Canadians said would cause them to rethink their vehicular choices was $2 to $2.25 per litre.

Story continues below advertisement

Online on Monday, the reactions from Canadians were more mixed.

Several Canadian consumers took to social media on Monday to post photos of gas prices. Some messages were critical of the government’s plan, while other Canadians said the price increase was OK with them.

— With files from Global News reporters Rahul Kalvapalle, Jane Gerster and The Canadian Press

Sponsored content