Dare to Compare: Prices at the Pump in Quebec

Viewpoint showing that the Quebec government should use the surpluses from the Green Fund 2.0 in order to pay for a reduction in the gasoline tax to close the price gap with the rest of Canada

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Les surplus du Fonds vert pourraient réduire le prix de l’essence, selon l’IEDM (Le Journal de Montréal, November 13, 2025) Reduce gas price in Quebec using carbon tax revenue: think tank (CityNews Montreal, November 13, 2025) Gas price gap between Quebec and the rest of Canada is widening after carbon tax cut (CTV News Montreal, November 14, 2025)	Interview (in French) with Gabriel Giguère (La commission, 98,5 FM, November 13, 2025)

This Viewpoint was prepared by Gabriel Giguère, Senior Policy Analyst at the MEI. The MEI’s Taxation Series aims to shine a light on the fiscal policies of governments and to study their effect on economic growth and the standard of living of citizens.

At the beginning of November, the Quebec government tabled Bill 7, whose primary purpose is to increase the efficiency of the state.(1) This bill also gives it more latitude to reduce the provincial gasoline tax(2) in order to give consumers a break in a context of increased cost of living.(3) Such a measure would reduce the substantial gap between the price paid at the pump in Quebec and in the rest of Canada.

Comparing Pump Prices

The federal government decided, in its 2025 budget, to cancel its fuel charge—after having suspended it in April—as a way of addressing the increased cost of living.(4) This cancellation does not apply to Quebec, which has its own carbon pricing mechanism. Given the federal decision and Quebec’s maintenance of its various fuel taxes, the gap in prices paid at the pump has widened.

The comparison of gasoline prices notably illustrates the substantial gap between Montreal and other Canadian cities. In March 2025, before the suspension of the federal fuel charge, the price of gas in Montreal was just 3.7 cents higher than the Canadian average (see Figure 1).

After this suspension, the gap widened substantially as of April to sit at 18 cents in Sep-tember 2025, and averaging 18.13 cents between April and September, nearly five times higher than it was in March. In the Quebec City metropolitan area, the gap went from 0.8 cents below the Canadian average in March to 14.6 cents above it in September, the Quebec capital thereby distancing itself significantly from Toronto.

For purposes of illustration, filling up a typical sport utility vehicle (SUV) like the RAV4 with a 55-litre tank in Montreal cost almost $90 in September 2025, nearly $10 more than the Canadian average, and $13 more than in Toronto.(5)

Over an entire year, the gap becomes significant for Quebecers’ wallets. An SUV is driven on average 14,356 kilometres and consumes 10 L per 100 km.(6) This is equivalent to an annual surcharge of $260 for residents of Greater Montreal, and $187 for those in the Quebec City metropolitan area.(7) A portion of the difference is due to the additional 3-cent tax that is applied in Greater Montreal.(8)

A Necessary Reform

Faced with this persistent gasoline price gap, the Quebec government is proposing to give itself the latitude to use the surpluses from the Green Fund 2.0(9) to pay for a reduction in the gasoline tax of 19.2 cents, or to pay additional amounts into the Generations Fund.(10) For the moment, the Green Fund 2.0 has a surplus of some $1.8 billion that could serve to reduce the price at the pump.(11)

The very existence of this fund deserves to be called into question.(12) If it is maintained, a reform aiming to fund the reduction of gasoline prices seems necessary in order to cover the loss of revenues from the fuel tax. However, the government should not limit itself to surpluses from the Green Fund 2.0 to reduce, in the longer term, the provincial gas tax.

Conclusion

Several distinct taxes increase the price of gasoline in Quebec, in addition to the effect of the carbon market on the price paid at the pump.(13) With the gap in gas prices compared to the Canadian average having been particularly high since April 2025, the government should take the necessary steps to reduce it, starting with (but not limited to) the use of the Green Fund surpluses.