Federal carbon tax on natural gas kicks in starting in April

WATERLOO REGION — Natural gas customers will see their bills increase by about $82 a year, under a new federal carbon tax that comes into effect this year.

The federal government has said for years it would combat climate change by imposing a tax on carbon and on the greenhouse gas emissions that are behind climate change. Four provinces — Ontario, Saskatchewan, Manitoba and New Brunswick — have refused to tax carbon, so the federal government is imposing its own carbon tax in those provinces, starting this year.

Starting in April, gas utilities in Ontario will charge an extra 3.91 cents per cubic metre of natural gas as part of that federal carbon tax. The new fee will appear as a separate line on the gas bill.

The average Kitchener home consumes about 2,100 cubic metres of natural gas a year (with a total bill of about $743 a year), so the increase works out to about $82.11 a year. (Since it only comes into effect in April this year, after the winter season in which people consume the most natural gas, the total cost in 2019 will be about $44.20.)

The charge will rise in each of the next four years, so that by 2020, residents will pay an average of $205.59 more for natural gas because of the carbon tax.

The cost of the extra tax will be at least partly offset with a rebate for anyone who files an income tax return. The average Ontario household should get a $300 tax credit to offset the carbon taxes.

The federal carbon charge will also increase the price of other contributors to greenhouse gases: Ontarians will pay four cents a litre more for gasoline next year, rising to 11 cents by 2022 for instance.