What Canadians Pay for Gas and Energy
From pandemic lows to record highs: How gas prices and energy costs have reshaped Canadian wallets over the past five years
Canadians are paying 15% more for gasoline than a year ago and 14% more than five years ago, even as overall inflation has risen by just 19% over the same period. This divergence reflects the volatile interplay of global oil markets, domestic taxes, and climate policies—leaving households to navigate a patchwork of regional prices and policy impacts.
The rollercoaster: Gas prices since 2020
Gasoline prices have swung wildly since the pandemic began, hitting a low of 160.1 cents/litre in 2022 before surging to 173.4 cents/litre in 2021. The latest data shows prices stabilizing around 167.2 cents/litre in December 2024, but this masks a 15% year-over-year increase from 145.4 cents/litre in December 2023. The 2021 spike coincided with post-lockdown demand and supply chain disruptions, while the 2022 dip followed Russia’s invasion of Ukraine and subsequent global energy market turmoil.
Regular gasoline prices (cents/litre) over five years
Source: Statistics Canada, Table 18,100,001
Inflation’s uneven burden: Gas vs. the broader economy
While the Consumer Price Index (CPI) has risen steadily—from 138.9 in January 2021 to 165.9 in January 2026—gasoline prices have outpaced general inflation, climbing 19% over the same period. The CPI’s 19% increase reflects broad-based price growth across goods and services, but gasoline’s 15% year-over-year surge in late 2024 stands out. This divergence highlights how energy costs, tied to volatile global markets, can distort household budgets even when other prices rise more slowly.
Gasoline prices vs. all-items CPI (indexed to 2021)
Source: Statistics Canada, Table 18,100,001
The carbon tax effect: How policy is shifting costs
Federal and provincial carbon pricing policies have added measurable costs to gasoline, with the federal carbon tax alone contributing roughly 14 cents/litre in 2024. While the tax is designed to incentivize cleaner energy, its direct impact on pump prices is clear: without the tax, gasoline would be closer to 153 cents/litre. Provinces like British Columbia and Quebec, which have additional carbon pricing systems, often see higher retail prices, though rebates and subsidies can offset some of the burden for lower-income households.
Estimated impact of carbon tax on gasoline prices (cents/litre)
Source: Statistics Canada, Table 18,100,001
Regional divides: Where Canadians pay the most (and least)
Gasoline prices vary dramatically across Canada, with British Columbia consistently topping the charts at over 180 cents/litre in late 2024, while Alberta and Saskatchewan often see prices below 150 cents/litre. The gap reflects differences in provincial taxes, refining capacity, and transportation costs. For example, BC’s higher prices are driven by a provincial carbon tax, higher fuel taxes, and limited refining infrastructure, while Alberta benefits from proximity to oil sands production and lower taxes.
Average gasoline prices by province (Dec 2024)
Source: Statistics Canada, Table 18,100,001
The future of fuel: What’s next for Canadian drivers?
With global oil markets stabilizing and carbon pricing policies expanding, gasoline prices are expected to remain volatile but trend upward in the long term. The federal government’s commitment to increasing the carbon tax to $170/tonne by 2030 could add another 38 cents/litre to pump prices by then. Meanwhile, the shift toward electric vehicles and renewable fuels may ease demand pressure, but for now, Canadians are stuck navigating a patchwork of regional costs, taxes, and climate policies that shape their daily commutes.
Projected carbon tax impact on gasoline prices (cents/litre)
Source: Statistics Canada, Table 18,100,001