On April 1, 2025, Canadian Prime Minister Mark Carney officially repealed the federal carbon tax on gasoline. While this measure applies nationwide, its impacts will vary significantly from one province to another.
So, what will be the impacts for Quebec’s transportation industry, already operating within its own carbon market through the cap-and-trade system?
A Price Drop… But Not for Everyone
The end of the carbon tax could bring a modest drop in fuel prices in provinces that were subject to the federal levy. In Quebec, however, where carbon pricing is built into the cap-and-trade auction system, this decrease may not materialize to the same extent.
This divergence could create price distortions between provinces, giving fleets operating primarily outside Quebec a cost advantage. Quebec based trucking companies, especially those active in Ontario, the Prairies, or the Maritimes may now face stiffer competition from out-of-province carriers benefitting from lower fuel costs.
In practice, this could erode the competitiveness of Quebec transporters in interprovincial markets, as they will continue to shoulder the costs tied to participation in the carbon market.
Regulatory Uncertainty
The sudden repeal of a fiscal mechanism designed to reduce greenhouse gas emissions sends a message of regulatory volatility to businesses. For the transportation sector, where investment decisions are often made years in advance, this uncertainty could slow down projects in decarbonization, fleet electrification, or the adoption of hydrogen technologies.
In this new context, some companies may reconsider their procurement and logistics strategies. For example, they might favor routes through provinces with cheaper fuel or even relocate operational bases to take advantage of cost differences.
This raises important questions for Quebec in terms of maintaining internal supply chains, protecting local tax revenues, and managing regional environmental impacts.
Finding a Competitive Edge
Amid this shifting landscape, Quebec transportation companies must navigate an increasingly complex regulatory environment, where multiple federal and provincial frameworks coexist. More than ever, access to specialized services for permit management, IFTA and mileage reporting is becoming essential. Strategic support can make all the difference, helping reduce administrative burdens, minimize errors, and improve profitability.
In a financial climate defined by constant change, investing in tailored compliance services is not only a regulatory necessity but also a strategic lever for boosting operational performance.
