On Jan. 1, Ontario consumers noticed a spike in gas prices as the province’s new cap and trade system came into effect.
Cap and trade will add about four cents a litre for gasoline and about a dollar per gigajoule to natural gas bills.
It will increase other prices too as increased costs of production and transportation ripple through the economy.
Economists Nic Rivers and Trevor Tombe estimate the average Ontario household will see increases of about $150 per year for gasoline and home heating and $80 in indirect costs, for at total of about $230.
While these costs are not astronomical, they will impose a real burden on most household budgets.
This is in part a good thing — the purpose of carbon pricing is to make people pay more for fossil fuels so they will use less of them to save money.