Canada: What happens when you tax petrol to stop people driving so far?
They drive a little further and buy it untaxed.
So what does Figure 1 show? Noble Canadian consumers are buying ever-increasing amounts of gasoline in the US of A, because there’s no carbon tax in Washington State. Patriotism at its finest. And you see how trips by bus and foot and train dropped when the automobile trips increased? So many folks are going from Canada to the US in automobiles that they’re taking their friends with them, plus folks who used to take the bus (or walk) across the border are now taking cars in order to bring back gas. It’s worth it to drive now, because you can bring back a tank full of gasoline with no energy tax.
When you fuck with Mr Market, smile.