Sask. doesn't have the levy ... right?

By Geoff Lee

January 10, 2017 10:27 AM

ON PAR Gas prices on both sides of the Border City were virtually the same on Monday morning with Petro-Canada at 44 St. and 50 Ave. reflecting the trend of 105.9 per litre. FAS GAS on the Alberta side of the city on Hwy. 17 north was selling fuel at 105.9 per litre on Monday, on par with virtually all of the retailers noted on GasBuddy.com. GEOFF LEE LLS PHOTO

Alberta’s carbon levy is causing some head scratching over why gas prices on the Saskatchewan side of the Border City are mostly on par with Alberta.
It was feared the 4.5 cents per litre gas tax and 5.3 cents per litre of diesel that came into effect on Jan. 1 would give Saskatchewan gas retailers a competitive edge with lower prices.
That’s been the belief of the Lloydminster Chamber of Commerce Political Action Committee since it learned about the levy over a year ago.
“The way we approached it initially was on the price difference for purchases and what that would mean to the commercial retainers,” said Rob Saunders, a member of the committee.
The chamber has been advocating the Alberta government for a seamless community where all businesses in Lloydminster should have a level playing field.
“So really we were being proactive in representing our local businesses anticipating that there could be potential problems with that in our bi-provincial city,” said Saunders.
Saunders said he has been monitoring gas prices city-wide since the fuel tax came into affect.
“Initially, from Jan. 1 as I first witnessed, there was quite a variance in pricing across the board—in the last few days we’ve seen it level out somewhat,” he said on Jan. 5.
Up to the minute gas prices in the city can be viewed 24/7 on GasBuddy.com.
Darren King, president of Kings Energy Group that sells wholesale bulk gas and diesel on both sides of the city, says higher gas prices in Saskatchewan don’t have anything to do with taxation.
“To me, there would be no reason for it,” he said, noting the mechanics for retail fuel prices are similar to wholesale.
“We have historically had the same taxation on both sides of the border because Saskatchewan would subsidize their taxation to bring prices down so we’ve seen a level field with retail,” said King.
“Now that there is an imbalance on the Alberta side, Saskatchewan retailers who have the same higher price as Alberta—I would expect, that seems to be margin for them.”
He said Kings’ approach is not to pocket that as profit.
“Our base price is the same on both sides of the border and we just tax accordingly, which has created a differential for us where our Alberta fuel, fully taxed is more higher because of the taxes,” he explained.
Saunders said it’s still early and his committee will wait and see what happens.
“Jurisdictionally, we’re not getting into the politics of it because we are not political,” he said, noting the chamber is a non profit group.
The action committee is however, applauding a bid by Vermilion-Lloydminster MLA Richard Starke for Alberta to make Lloydminster a carbon tax exempt zone.
Starke has been carrying the fight for a seamless community in the Alberta Legislative Assembly.
When reached by phone on Jan. 5, he said he hasn’t been back to Lloyd since New Year’s and wanted to check prices himself on his return before saying too much.
“I’m hearing in some cases reports where there is a price discrepancy and other cases where there isn’t, so I can’t comment on what the different is or if there is a difference currently,” he said.
Starke said as far as the setting of the prices goes and how the carbon levy has affected prices, one thing we know for sure is that prices on the Alberta side have gone up 4.5 cents as of Jan. 1
“In terms of any adjustments that will have been made on the Saskatchewan side and what adjustments have been made, that I don’t know,” he said.
Starke cautioned against speculating on margins as a reason for the lack of price disparity in the city without the facts to support them.
“I know there is one other factor that should be considered as well and that is the Saskatchewan government, for a number of years for retailers close to the Alberta border, has made an adjustment in the amount of provincial fuel tax that is charged,” he said.
Starke said the Saskatchewan fuel tax is about 2.5 cents higher than Alberta’s and recognizing that would put those fuel sellers at a disadvantage, so they have waived that differential.
Starke stood up in the Legislature on Dec. 13 to lobby for a carbon levy exemption for the whole city of Lloydminster.
He said making Lloydminster an exempt zone is simply a matter of making a departmental regulation change.
“It doesn’t have to be legislated to the assembly—this isn’t going to have to wait until the Legislature,” he said,
Starke said the regulation change would involve the Ministry of Environment and Parks through the climate change office and the finance and treasury board because they collect the taxes.
Brent Wittmeier, press secretary for Alberta Environment Minster Shannon Phillips, said in an email that border-straddling communities like Lloydminster face challenges whenever policies, laws or regulations change.
And the carbon levy is no exception.
“Our department has been discussing this with leadership in Lloydminster as well as departmental officials in Saskatchewan as gas and diesel has historically been subsidized on the Saskatchewan side of the border,” he said.
Wittmeier noted these discussions are ongoing as the province adjusts towards a federal carbon price.
Meanwhile, Saunders said the chamber committee wants to talk with their local fuel providers and business people and get their input before deciding their next step.
“That’s what we want to do is talk with our membership and businesses so they are involved in the community here so can get that grassroots feedback and really be able to analyze the situation before we put anything forward,” said Saunders.
“With consultation with the business community, we’ll decide how we’re going to proceed from here.”

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