A Look at Why Canadians Pay More at the Pump

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A question that I hear all the time is - "Why is gasoline more expensive in Canada than the United States?"

It's true - Canadians do pay more at the pump than Americans, despite the fact that Canada is one of the most resource-rich countries in the world (Canada has much higher proven oil reserves than the United States does).

So what gives? Shouldn't the United States be paying more, not less?

The main reason for the difference? Taxes.

Canadians, on average, pay roughly $1.20 USD per gallon of gasoline in TAXES. This works out to approximately 32 cents (USD) per liter in taxes.

Americans, on average, pay roughly 49.5 cents USD per gallon of gasoline in taxes. This works out to approximately 13.2 cents (USD) per liter in taxes.

Americans have to pay a number of different taxes every time that they fill up. A federal excise tax. State excise taxes. The list goes on and on. The average American, as mentioned, will pay 49.5 cents per gallon in taxes.

Canadians have a long list of taxes to pay as well every time that they fill up at the pump. A federal excise tax. A provincial tax. GST/HST. In addition, depending on where you live in the country, you may have to pay a provincial sales tax, a carbon tax or even a transit tax. This works out to an average hit of $1.20 USD per gallon of gasoline (there are 3.785 liters in a gallon).

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So, if you are living in Canada and wondering why you pay more for gas than your American counterparts - the main finger of blame should be pointed at the Taxman.