Ontario Premier Doug Ford has officially reached out to Prime Minister Mark Carney, urging him to prolong the federal gas excise tax break until the year’s end. Ford emphasized the importance of maintaining the tax relief amidst economic uncertainties, including potential tariffs and rising living expenses faced by Canadians.
Initially implemented in April, Carney had temporarily suspended the 10-cent federal excise tax on a liter of gasoline and four cents per liter on diesel until September 7, coinciding with Labor Day. This move, estimated to cost around $2.4 billion, aimed to alleviate short-term financial pressures due to the surge in global oil prices linked to geopolitical tensions.
In response to the federal initiative, the Ford government in 2022 introduced its own temporary fuel tax holiday, reducing taxes on gas by 5.7 cents per liter and on diesel by 5.3 cents per liter. This adjustment aligned the provincial tax rates on gas and diesel to a combined nine cents, resulting in annual savings of approximately $115 per household as per the 2026 provincial budget.
Ford’s recent correspondence proposed extending the federal fuel tax break until January 1, with a suggestion for the federal government to make the suspension permanent to match Ontario’s efforts in reducing costs. This call for continuity aligns with the federal Conservatives’ persistent advocacy for an extended tax holiday through year-end.
The alignment of views between Premier Ford and Conservative Opposition Leader Pierre Poilievre on this matter signifies a rare convergence of perspectives, given their historically strained relationship. While Ford’s focus is on preserving the fuel tax relief, Poilievre advocates for the removal of GST on gas and diesel until December 31, along with the permanent elimination of clean fuel regulations to further alleviate financial burdens on Canadians.
Finance Minister François-Philippe Champagne’s spokesperson refrained from confirming any extension of the excise tax holiday, emphasizing the Liberal government’s commitment to enhancing affordability. The government aims to collaborate with provinces on initiatives that bolster growth, competitiveness, and cost reduction in response to the current challenging global economic landscape.