Quebec’s move to cut gasoline floor price won’t be felt at the pumps, experts say

A Petro-Canada gas station is seen in Mulmur, Ont. on Sunday, October 27, 2024. The Quebec government's move to scrap its floor price on gasoline is an attempt to allay concerns about the high cost of fuel relative to other provinces, observers say — but one that's unlikely to bring prices down. THE CANADIAN PRESS/Chris Young

MONTREAL — The Quebec government has made a move it hopes will lower the price of gas in the province — but observers say consumers are unlikely to benefit at the pump.

They say the province has faced pressure to act since the federal government scrapped the consumer carbon price, which applied across much of the rest of the country, on April 1. In the days that followed, Quebec went from having some of the cheapest gas in the country to some of the most expensive.

On Monday, Economy Minister Christine Fréchette announced Quebec is withdrawing its floor price on gasoline and other fuels, a measure that has been in place since the 1990s to protect small service stations from being undercut by larger players. She framed the decision as a way to boost competition and ultimately lower prices.

“I have the impression they were under pressure to do something about the price of gas,” said Pierre-Olivier Pineau, chair of energy sector management at HEC Montreal, the business school of Université de Montréal. “This allows them to make an announcement without there being any real consequences.”

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Prime Minister Mark Carney’s decision to eliminate the consumer carbon levy, followed by British Columbia’s move to scrap its own carbon tax, has meant that gas prices have dropped dramatically since April 1 in all provinces except Quebec, which operates its own cap-and-trade carbon-pricing system.

According to the website GasBuddy.com, the average pump price has remained fairly flat in Quebec in recent weeks, around $1.50 per litre. In Ontario, the average price has dropped to $1.21 per litre.

The disparity has attracted considerable attention in Quebec. This week, a Leger survey commissioned by the Canadian Taxpayers Federation, which has waged a campaign against the province’s carbon price, found that 49 per cent of respondents said they opposed the cap-and-trade system, while 32 per cent said they supported it.

So far, opponents of emissions pricing have not found a champion in the provincial legislature. Last week, the national assembly voted unanimously in favour of a motion reaffirming its commitment to the cap-and-trade system. Quebec Conservative Leader Éric Duhaime has called on Premier François Legault to scrap the carbon price, but his party has no seats in the legislature.

Pineau said the decision to abolish the floor price is a largely symbolic gesture to mollify critics. He said most gas stations charge prices that are higher than the minimum, so removing the floor is unlikely to make costs plummet. “Most likely, it will be a total status quo,” he said.

Scrapping the floor price was one of the recommendations of an independent report, commissioned by the province, that was published last year. The government says it will do away with the minimum price by introducing amendments to an existing bill reforming Quebec’s energy sector.

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But Sonia Marcotte, CEO of an association representing Quebec energy distributors, said she’s concerned the change will lead to price wars that could force smaller retailers out of the market, leading to a decline in competition. Afterward, she said, “prices will rise again.”

Marcotte said Quebec service stations near the boundaries with Ontario and New Brunswick have seen their sales drop since the federal carbon price was removed. She said the Quebec government should take steps to bring prices down, either by scrapping the cap-and-trade system or by lowering the provincial gas tax, which currently sits at 19 cents per litre. Ontario Premier Doug Ford cut that province’s gas tax to nine cents per litre in 2022.

“The important thing is that it is equivalent and that we are able to compete,” Marcotte said.

Charles-Édouard Têtu, climate and energy policy analyst with Quebec environmental group Équiterre, said he’s worried the government’s move could signal a weakening of its resolve on carbon pricing. “Perhaps we are opening the door, in a certain respect, to questioning some of our other flagship policies in Quebec,” he said.

“We must remain vigilant. Ambitious policies will constantly be under attack in the coming years.”

Têtu said there are better ways to address cost-of-living concerns, including by investing in public transport to reduce people’s dependence on cars.

Quebec’s cap-and-trade system, which is linked to California’s, currently costs consumers around 10 cents per litre of gasoline. Launched in 2013, it has never been particularly controversial.

This week’s decision to axe the floor price is a way to appear “proactive” on an issue that’s currently top of mind, said Éric Montigny, a political science professor at Université Laval. But it remains to be seen whether opposition to the cap-and-trade system will gain a foothold in Quebec politics, he said.

“It’s clear that the fact the federal government has abolished the carbon tax ... puts Quebec’s distinctiveness back on the agenda,” he said.

This report by The Canadian Press was first published April 17, 2025.

Maura Forrest, The Canadian Press