Natural Resources and Energy Development
Premier’s statement on provincial action on federal clean fuel regulations08 July 2023
FREDERICTON (GNB) – The following statement was issued today by Premier Blaine Higgs regarding provincial action on federal clean fuel regulations:
Why New Brunswick is taking action on federal clean fuel regulations
New Brunswickers are receiving conflicting information about the federal carbon tax and Clean Fuel Regulations. Let’s be clear, it is the federal government that has imposed these regulations on Canadians, and because of this choice, it is costing us more for almost everything we buy and will negatively impact rising inflation.
The Atlantic provinces have made amendments as to how regulators set maximum prices. If these changes were not made, small retailers in the region would have to absorb the additional cost of the federal government’s new regulations. This would significantly impact their revenues and jeopardize their ability to continue to operate.
In rural New Brunswick, there may only be one gas station that is family owned.
They need to be able to recover these costs or they won’t be in a financial position to continue providing fuel to their community and ultimately may be forced to shut down. These businesses are important to small communities as they provide more than fuel. Just ask anyone who lives nearby.
We need to do whatever we can to protect these businesses.
That is why we ensured the New Brunswick Energy and Utilities Board (NB EUB) was able to factor the impacts of the Clean Fuel Regulation into its maximum retail pricing formula. The types of changes made in all of the Atlantic provinces are unique as we regulate the maximum price at the pump, not at the refinery. Comments made publicly suggest that we have “allowed” refineries to pass along costs to consumers.
However, the reality is that we do not regulate their pricing and they operate in a competitive market. Refineries could always pass along whatever costs they need to in order to maintain their business. In unregulated markets outside of Atlantic Canada, they will just pass along whatever costs are needed to earn their profit. In Atlantic Canada, we have a responsibility to ensure that maximum prices reflect true costs so that retailers, particularly those smaller retailers who are critical to our smaller communities, don’t risk being squeezed so hard financially that they risk closing due to the costs associated with these federal regulations. To be clear, the New Brunswick legislation passed earlier this spring did not in any way enhance Irving Oil Limited’s ability to pass incurred costs to the consumer and it is simply false to suggest otherwise.
The NB EUB adopted a formula to reflect the cost of the Clean Fuel Regulations, unlike other Atlantic regulators which have selected a value. The NB EUB only sets maximum retail gas prices. It does not set wholesale or refining prices. The approach by each regulator may change over time, as regulators have more information on how to set the price to achieve the lowest prices possible without jeopardizing the continuity of supply. The NB EUB formula to address the federal government regulation resulted in an increase of about six cents on July 7. They have stated they will review the formula in no more than six months time and earlier if evidence suggests it should be a different amount.
In addition to the federal government’s clean fuel regulations, this month, for the first time, the carbon tax was applied to home heating fuels like heating oil, further impacting energy affordability. Heating oil increased by 17.38 cents per litre as a result of the federal carbon tax, adding more than $500 for heating costs this coming winter.
As a provincial government we’re taking steps to try to ease the burden brought on by these federal regulations. Last year, the New Brunswick government established the Enhanced Energy Savings Program to help people reduce their heating costs. In December, we announced an additional $40 million to expand the program to help New Brunswickers transition away from heating oil. The Enhanced Energy Savings Program offers a free mini-split heat pump and upgraded insulation – along with free installation of both to homeowners who use heating oil and electric baseboard heating and have a combined gross household income under $70,000. Homeowners in the same income bracket with an alternate heating source are eligible for upgraded insulation, free of charge.
Our goal here is simple: we want to provide all New Brunswickers, no matter their income level, opportunities to better manage their energy costs.
New Brunswick and Nova Scotia have led the country in emissions reductions since 2005. The Atlantic provinces have been working collaboratively with the federal government to invest in innovative clean technologies to accelerate the development of renewable energy, reduce emissions, and ensure a supply of clean and affordable energy products for Atlantic Canadians.
With energy and food prices rising and the federal government trying to calm inflation, implementing regulations that add more costs to gasoline and diesel only exacerbates an already difficult situation. The federal government has acknowledged that there is a disproportionate impact on Atlantic Canadians with the new regulations.
Energy poverty in this region is already the highest in Canada, and there is no denying that we have a greater dependency on heating oil than any other jurisdiction in the country. Statistics Canada data show 13 per cent of Atlantic Canadians experience energy poverty, compared to the national average of eight per cent.
We need to continue to ensure that the policies being developed are implemented fairly so that no one region is being impacted more negatively than another. I and my fellow premiers in Atlantic Canada continue to call on the federal government to recognize the differences in our region and rescind these extra taxes while inflation remains so high. This will be a major topic for discussion at this week's national meeting of provincial premiers in Winnipeg.08-07-23