Why is gasoline cheaper in the United States?
Retail Gasoline Price Comparison 2007
Most of the difference in gasoline prices between Canada and United States is because of taxes. Gasoline taxes vary by state and province and at each national level. When taxes are removed, Canadian and American prices are similar.
Need more information? See Taxes on Fuels.
Can't Canada set its own prices for gasoline?
The Government of Canada does not have jurisdiction over the price consumers pay for gasoline. Under Canada’s constitution this is a provincial responsibility. Additionally, Canada does buy gasoline from other countries during the summer months to meet local demand, and has to pay the global market price. Retailers pass on these higher costs to consumers.
There are benefits to a market-based approach to fuel prices. Rising prices encourage more production while leading consumers to use fuel more efficiently and, where possible, to change to other fuels. This helps to ensure that sufficient supplies are available, preventing product outages.
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