MCTEAGUE: Ottawa’s hidden windfall — how high gas prices are boosting tax revenues during Canada’s energy crisis

Dan McTeague is President of Canadians for Affordable Energy.There's no denying it: We are in an energy crisis. Global oil prices have surged past $100 a barrel, and here in Canada, that means that gas and diesel prices are uncomfortably high and rising. It's affecting all of us, both at the pump and in the form of higher grocery bills, energy costs, and an elevated cost of living.I know I sound like a broken record on this. But Canada sits on some of the largest proven reserves of oil and natural gas anywhere on Earth. We should be an energy superpower, insulated from global shocks of this kind. Instead, our economy is groaning under the weight of fuel prices, exacerbated by a weakened Canadian dollar. Because of our decreased purchasing power, when oil jumps $35 to $40 a barrel globally, Canadians are effectively absorbing the equivalent of a $55 to $60 increase.This was a self-inflicted wound. Our governing elites, in order to signal to the world how devoted they are to the Net-Zero religion, have done their best to cripple our natural resource sector, the backbone of our economy. They’ve blocked pipeline projects and driven up prices through carbon taxation schemes, like the so-called Clean Fuel Standard and the Industrial Carbon Tax.For a decade or more, we’ve pursued short-sighted climate policies, strangling new infrastructure, discouraging investment, and chasing green utopian fantasies.Our allies all but begged us to supply them with oil and gas in the wake of the Russian invasion of Ukraine. But aside from some increased exports to Asia over the course of 2025 — still just a drop in the bucket — the Liberal government made it clear that they were not interested. There’s “no business case” for it, in the immortal words of our then-prime minister Justin Trudeau. Now economic activity is slowing, and we’ve shed more than 100,000 jobs since the start of the year..We left Germany, Japan, and Greece out in the cold. Now we’re having trouble keeping ourselves warm.That’s how we got here. But the real question is, what do we do now?I have a suggestion. The government should return some of the money it’s pulling in from sales taxes on fuel to struggling Canadian consumers.Remember — sales taxes are calculated as a straight percentage of the full price on every transaction. So higher energy prices mean more tax dollars flowing into the government's purse.These are ill-gotten gains. Ottawa and the provinces are profiting from this crisis, which their own anti-resource sector policies were already making unnecessarily painful.That’s a problem we can and should fix. We know how. We’ve done it before.In 1999 and 2000, there was a sharp spike in the price of natural gas and oil. At the time, I was still a Liberal Member of Parliament — back before that party completely lost its way. Those higher prices delivered a massive windfall to the government. I championed practical relief measures — including targeted rebates for home heating fuel — that helped convince Jean Chrétien and Paul Martin to redirect some of that money back to Canadians facing higher home heating and energy costs..The rationale was simple: it is one thing for families to absorb price increases that are largely beyond anyone’s control. But it is quite another for governments to pile on by taking a percentage cut of the misery.The same thing is happening today. In my home province of Ontario, the combined federal GST and provincial HST means governments are automatically collecting 13% of every cent the price goes up. On an increase of 77 cents per litre of diesel and 40 cents per litre of gasoline, that works out to an extra $15 to $20 million — or more — flowing into the government’s bank account.There are levers available to Prime Minister Carney and our Premiers. Suspend or rebate the GST/HST on fuel. Or maybe remove or reduce the federal excise tax.Give consumers immediate relief instead of letting government coffers swell while families tighten their belts.Thus far, it seems our leaders are happier to blame America and the now-weeks-old war in Iran for all of our problems. But the root cause lies in the policy choices Canadians have endured for years. Heaven help us, it is now up to the very people who laid the groundwork for this mess to start fixing it before the cost-of-living crisis becomes a full-blown affordability emergency.Energy crises have happened before, and they will happen again. But right now, Canadians deserve leaders who will prioritize getting us through this whole instead of turning it into a cash grab.Dan McTeague is President of Canadians for Affordable Energy.

MCTEAGUE: Ottawa’s hidden windfall — how high gas prices are boosting tax revenues during Canada’s energy crisis

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