One of the biggest factors influencing how much gas prices rise in a given area is whether the region depends on imported oil. Canada has a complex energy infrastructure, and while it produces significant amounts of oil domestically, not all provinces benefit equally from this production.
Eastern Canada, particularly provinces like Newfoundland and Labrador, Nova Scotia, and Prince Edward Island, relies heavily on imported crude oil and refined petroleum products. These regions receive much of their fuel from international markets, meaning that any tariffs applied to imported oil could significantly drive up costs. Since these additional expenses typically get passed down through the supply chain, consumers in these provinces are more likely to feel a stronger impact at the pump.
In contrast, Western Canada, particularly Alberta and Saskatchewan, has a more self-sufficient energy market. These provinces produce a significant portion of Canada’s oil and have easier access to domestic refineries and pipelines. Because of this, the impact of new tariffs may be less severe in these regions. However, even though Alberta and Saskatchewan primarily rely on domestic oil, external market forces could still play a role in determining how much gas prices increase. If overall supply chain costs rise due to tariffs affecting other parts of the country, it could still lead to higher fuel prices, even in regions that do not depend on imports.
Another crucial factor that will determine how much prices rise is the tax structure of each province. Canada has widely varying fuel tax rates, meaning that the same increase in base fuel costs could have different effects depending on where you live.
For example, British Columbia already has some of the highest fuel taxes in Canada, particularly in Metro Vancouver, where a combination of carbon taxes and transit levies make gas prices among the most expensive in the country. If tariffs drive up costs, the increase could be particularly burdensome for drivers in B.C., as it would be added on top of an already high baseline price.
Meanwhile, Alberta has historically lower fuel taxes, meaning there might be more room to absorb price increases before they become a significant burden for consumers. However, even in lower-tax provinces, an increase in fuel costs can still affect household budgets, particularly for those who rely on driving for work or commuting long distances.
Even though Canada’s new tariffs are a domestic policy, they don’t exist in a vacuum. Global oil prices will play a major role in determining whether gas prices see a drastic increase or a more moderate one.
If international oil prices are already high due to geopolitical tensions, supply shortages, or production cuts by major oil-producing nations, the impact of tariffs on Canadian fuel prices will be even more pronounced. Higher base oil prices mean that any additional costs imposed by tariffs will be compounded, leading to a steeper rise in gas prices for consumers.
On the other hand, if global oil prices decline due to decreased demand, increased production, or shifts in the global economy, the effect of tariffs could be less severe. In such cases, even if tariffs increase the cost of imported oil, the overall price of gas might not rise as dramatically because other market forces are working in the opposite direction.
Another important factor to consider is how fuel is transported across Canada. The cost of moving crude oil and refined gasoline from refineries to gas stations plays a crucial role in determining the final price consumers pay.
Regions that are further from major refining hubs, such as remote communities in Northern Canada, could see a greater impact from the tariffs. These areas already face higher transportation costs for goods, and any increase in the base cost of fuel will likely have an amplified effect. In contrast, provinces with better access to refineries and pipelines may experience a smaller increase, as transportation costs are lower.
Additionally, competition among fuel suppliers can help offset price hikes in some regions. In areas with a high concentration of gas stations and fuel distributors, businesses may try to keep prices competitive to avoid losing customers. However, in smaller markets with fewer fuel retailers, there may be less incentive to absorb some of the additional costs, making it more likely that consumers will bear the full impact of the price increases.
For consumers, the biggest takeaway is that the effect of these tariffs on gas prices will not be uniform across Canada. If you live in a province that relies on imported fuel, has high existing fuel taxes, or has fewer competitive suppliers, you’re more likely to see a noticeable increase at the pump. In contrast, if your region benefits from domestic oil production, lower taxes, and efficient transportation infrastructure, the impact may be more muted.
For urban drivers in major cities like Toronto, Vancouver, and Montreal, gas prices are already higher than in many rural areas due to additional taxes and higher demand. Any additional cost increase will likely be felt more acutely by residents in these areas, particularly those who rely on driving for daily commutes. However, some rural and remote communities, where fuel costs are already high due to transportation expenses, could also be disproportionately affected.
At the same time, businesses that depend on fuel, such as trucking companies, delivery services, and public transit operators, may have to adjust their pricing structures to compensate for rising costs. This could have a trickle-down effect on the cost of goods and services, making everyday essentials more expensive for consumers.
While the full extent of the impact remains to be seen, one thing is clear: the introduction of new tariffs in Canada will influence gas prices, but the severity of that impact will depend on where you live. Understanding the various factors at play—import dependency, taxes, global market trends, and transportation costs—can help drivers anticipate and prepare for potential changes at the pump. Keeping an eye on fuel prices, shopping around for the best deals, and exploring fuel-saving strategies may become even more important as these tariffs take effect.
