Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to extend the temporary suspension of the federal gas excise tax until the end of this year. Ford stressed the importance of maintaining the tax relief given the current economic challenges faced by Canadians with rising housing costs, grocery prices, and everyday expenses.
Earlier in April, Carney had announced the temporary removal of the 10-cent excise tax on gasoline and four cents on diesel until September 7 as a measure to alleviate short-term financial pressures caused by the spike in global oil prices due to geopolitical tensions. This move was estimated to cost around $2.4 billion.
In a separate initiative in 2022, the Ford government implemented its own temporary fuel tax reduction, lowering taxes on gasoline by 5.7 cents per liter and on diesel by 5.3 cents per liter, resulting in a harmonized provincial tax rate of nine cents per liter. This adjustment was expected to save households approximately $115 annually as outlined in the 2026 provincial budget.
Ford urged Carney to consider extending the federal fuel tax holiday until January 1, proposing that the federal government match Ontario’s efforts by making the tax suspension permanent. The federal Conservatives have also been advocating for the extension of the excise tax holiday until the year-end.
The letter from Ford to Carney signifies a rare instance of alignment between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have had strained relations in the past, causing divisions within Canada’s conservative movement. Poilievre has additionally called for the removal of GST on gas and diesel until December 31 and the permanent elimination of clean fuel regulations to further reduce costs for Canadians.
Finance Minister François-Philippe Champagne’s spokesperson emphasized the government’s commitment to enhancing affordability and exploring measures with the provinces to boost growth, competitiveness, and address the challenges posed by the current global economic climate.