MONTREAL – As Quebec remains the last province in Canada that has not abandoned carbon pricing, there are growing indications that the provincial government may face pressure to align with the federal government’s recent changes. The province has historically maintained a broad consensus on the need to reduce greenhouse gas emissions, supported by its cap-and-trade system introduced in 2013, which has generally avoided controversy.

However, the recent announcement by Prime Minister Mark Carney, regarding the elimination of the federal consumer carbon price, is anticipated to shift public perception and may influence them to reevaluate Quebec's own pricing system, especially as gas prices fluctuate. As of Tuesday, the federal carbon price—previously enforced in most provinces and territories—has officially been repealed, with British Columbia, also having repealed its carbon tax which was introduced back in 2008.

On Monday, Premier François Legault responded to questions about whether Quebec should mimic this action, stating that he would prefer to observe the outcome of the federal election scheduled for April 28. He emphasized the importance of competitiveness and asserted that Quebec’s cap-and-trade system ultimately costs consumers less than the federal carbon price.

With the removal of the federal measure, critics of carbon pricing argue that it won’t be long before Quebecers begin to feel the impact on fuel costs. Carol Montreuil, vice-president of the Canadian Fuels Association, remarked on the potential stark contrast in gas prices between Quebec cities like Gatineau and Montreal and the nearby Ottawa. He posited that many residents may soon call on the government for a break from the cap-and-trade system, particularly in light of additional economic pressures such as U.S. President Donald Trump’s tariffs.

As of March 31, 2024, the federal carbon levy was contributing approximately 17.6 cents per litre to gas prices, while Quebec's cap-and-trade system, which is linked to California’s, cost around 10 cents per litre. Pierre-Olivier Pineau, who chairs the energy sector management program at HEC Montréal, cautioned against expecting gas prices in Quebec to drop by the full 18 cents immediately, noting that distributors might maintain larger profit margins initially.

On that date, data from GasBuddy.com indicated that the average gas price in Quebec was around $1.53 per litre, one of the lowest across Canada, while British Columbia’s average price was significantly higher at approximately $1.78 per litre.

Nicolas Gagnon, Quebec director of the Canadian Taxpayers Federation, highlighted that Quebec could shift from having relatively affordable gas prices to the most expensive in the country. He intends to leverage this situation as a strategic opportunity to urge the Quebec government to abolish its carbon pricing system.

Despite these discussions, Normand Mousseau, a professor of physics at the Université de Montréal and scientific director of the energy institute, pointed out a notable absence of significant political opposition to the cap-and-trade system in Quebec. He expressed skepticism regarding the likelihood of gas prices becoming a pivotal political issue, attributing it to a strong consensus among Quebecers about the necessity of addressing climate change.

Pineau also mentioned that if the government begins to face strong pressure regarding carbon pricing, it could potentially redirect some revenues from the carbon market back to taxpayers. Presently, those revenues are allocated to Quebec’s electrification and climate change fund, aimed at supporting programs designed to reduce emissions. This distinct approach differentiates Quebec’s cap-and-trade system from the federal model, which returned most revenue directly to households.

He also observed that the complexities of Quebec’s carbon pricing mechanism might be contributing to its relatively uncontroversial status, as the less transparent nature of the costs could make it difficult for the public to voice opposition.