B.C. NDP promise to cap industry margins on diesel and gas as prices. Will it work?

The B.C. NDP is promising to reduce gas prices if re-elected, and while small business groups are welcoming the effort, at least one economist believes the proposed measures won’t make much difference at the pumps.

Premier David Eby announced in Surrey on Thursday that, if re-elected, his government will temporarily move to lower the provincial motor fuel tax by 10 cents a litre, as well as direct the B.C. Utilities Commission to implement a price guard on the margins of the oil and gas industry, reducing prices by an additional 20 cents per litre.

The directive would empower the utilities commission to enforce pricing rules, according to Eby, who said that his party’s plan will prevent corporations and refiners from increasing their prices like they did after the carbon tax came off in March 2025.

“With a 10-cent gas tax cut, plus the 20-cent margin reined in by the utilities commission, British Columbians will save about $20 on an average fill-up,” said Eby.

“What that means for a two-car family here in Surrey is $1,100 saved a year. What does it mean for a short-haul truck driver? A savings of more than $100 per fill-up for a tank of diesel. For a long-haul truck driver, a savings of more than $200 a tank.”

Former NDP premier John Horgan launched a commission in 2019 through the utilities commission to analyze rising gas prices and force oil and gas companies to explain their increased profits.

While the commission did find that gas prices had a “significant, unexplained” markup of 13 cents a litre in Metro Vancouver, the government did not introduce any measures to address it, with the government saying a tax cut would just send more money to oil companies.

Eby said the directive to the utilities commission will help prevent this by forcing oil and gas companies, retailers and gas stations to keep prices within a certain limit.

Ryan Mitton, B.C. legislative affairs director for the Canadian Federation of Independent Business, said the lowering of the motor fuel tax would be a welcome relief for small businesses dealing with inflation and regulatory costs.

He added that 57 per cent of small business owners said in a recent survey that the fuel tax was a constraint on their business, double the percentage of proprietors who said it was an issue in February, prior to the start of the war in the Middle East.

“With international conflicts putting pressure on the fundamental price of crude oil, we’ve seen a massive spike in fuel and energy costs, and that’s hitting small businesses on both ends of the equation,” said Mitton, adding that customers are buying less and it costs more for workers to commute.

Eby’s former deputy chief of staff Aileen Machell agreed, saying the government needs to do something to prevents costs from rising for business owners and consumers.