On his first day as Canada's prime minister in 2025, Mark Carney eliminated the consumer carbon tax. And now, on his first day after winning a majority government, Carney has decided to suspend the federal excise tax on gasoline. This probably isn’t what Carney, the most accomplished economist to ever wield political power in Canada, had in mind when he imagined becoming prime minister. 

There are, after all, more economically efficient ways to help Canadians meet the cost of living challenge being created by Donald Trump’s catastrophic attack on Iran and the soaring oil prices that have followed. As University of Calgary economist Blake Shaffer noted on social media, Carney could have used the $2.4 billion allocated to the gas tax pause on an increase in the Canada Child Benefit and GST credits. That would simultaneously help those most in need and avoid dampening the price signal being sent by oil markets — one that is telling consumers and businesses to electrify as quickly as possible. 

But Carney is in the business of politics now, and business is booming. And while he’s clearly traded some of his ideological credibility for political currency, it’s nothing compared to the way his opponents have debased themselves on this issue. Conservative Party of Canada leader Pierre Poilievre has been straight-up lying about federal policy here, claiming that “high Liberal taxes” add anywhere from 25 to 28 cents per litre. “Liberal gas taxes are the reason prices are so much higher in Canada than in the US,” he said on social media. 

In reality, the federal excise tax on gasoline is the same 10 cents per litre it was under the Harper government, while the Clean Fuel Standard adds between 1.7 cents and 2.5 cents per litre. The rest of his figure is almost certainly provincial gas taxes, which range from 9 cents in Ontario to 13 cents in Alberta to 27 cents in the Greater Vancouver Area. 

CPC deputy leader Melissa Lantsman hasn’t exactly covered herself in glory here either. She repeated the 25-cent-per-litre figure and then went one better, suggesting on social media that a full repeal of it would save Canadians $1,200 per year. But that would require the average Canadian household to consume almost 5,000 litres of gasoline in a year. Based on the average fuel efficiency of the average Canadian vehicle, that equates to more than 50,000 kilometres driven. The most recent data for motor gasoline demand shows a national per-capita average of 1,035 litres in 2022, with Alberta coming in at 1,219 litres. 

Somehow, the federal NDP’s contribution to the discourse here might be even dumber. In his own social media post, newly-elected NDP leader Avi Lewis tried to blame oil company profiteering for rising gas prices, thereby betraying his complete and utter ignorance on the subject. “It’s their profiteering that’s driving up prices. It’s them who should pay. It’s time for price caps on gas to stop oil companies from price-gouging Canadians — and a windfall profits tax on war-time oil revenues, so the government can invest that money in the public interest.”

Extending Canada’s existing excess profits tax to oil and gas companies would be good and fair policy, but the politics around it are almost certainly ruinous. It would almost certainly scotch the MOU between Ottawa and Alberta and hand the separatists a victory right on the eve of a potential independence referendum. If Avi Lewis was looking for a way to make life more difficult for NDP leader Naheed Nenshi, he probably couldn’t do better than proposing a new tax on the oil and gas industry. 

But it’s the ideas preceding it that are most disqualifying. It is not, in fact, profiteering by oil companies that’s driving up prices. We know this because we can see what’s happening in the Strait of Hormuz and its downstream impacts on tanker rates, Middle East oil production and refinery demand in Asia and Europe. Wholesale commodity markets aren’t driven by greed or profiteering (or at least no more so than prices of literally anything else) but instead by the interaction between supply and demand, and when the global supply of oil collapses by as much as 10 per cent prices are going to react. Canada’s oil producers will obviously benefit from that reality, but they are not its architects. 

Any attempt to impose a “price cap” on gasoline prices, meanwhile, would almost certainly result in massive gasoline shortages. If refineries were effectively being asked to buy a barrel of oil at $120 and sell its products for less than that, they would either find a way to ship their gasoline and diesel to other markets or cease operations. This idea is a kissing cousin to Donald Trump’s oft-stated belief that Americans are insulated from global markets and global prices because they produce so much oil. In reality, the only way to insulate yourself from global markets and their prices is to cut yourself off from them entirely. 

Blaming corporations is the easy and reflexive answer for New Democrats, just as blaming Liberal policy is for Conservatives. Neither side seems particularly interested in offering alternatives to the Liberal government that are built on things like substance, depth and context. Instead, it’s just populist politics and economic illiteracy all the way down, giving the Liberals an easy win when they should be engaging with the substance of the problem. 

Canadians deserve more, and better, than that. In the wake of his party’s trio of byelection wins, Carney told reporters that “it’s time to get serious.” He can, and should, lead by example. But if the Conservatives want to win an election at some point, and if the NDP wants to reclaim official party status, they might want to try doing the same. 

© National Observer