Ontario Premier Doug Ford has sent a letter to Prime Minister Mark Carney urging him to prolong the federal gas excise tax holiday until the end of the year. Ford emphasized the importance of maintaining the tax relief on gasoline and diesel amidst ongoing economic challenges faced by Canadians.
Earlier in April, Carney had temporarily suspended the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until September 7. The decision, estimated to cost around $2.4 billion, aimed to alleviate short-term financial pressures caused by the surge in global oil prices due to geopolitical tensions.
In response to Carney’s initiative, the Ford government introduced its own temporary fuel tax holiday in 2022, 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 nine cents per liter, resulting in an annual savings of approximately $115 per household as outlined in the 2026 provincial budget.
Ford’s letter proposed extending the federal fuel tax holiday until January 1, suggesting that the federal government could follow Ontario’s lead by making the suspension permanent. This request aligns with the federal Conservatives’ call for an extension of the tax holiday until the year-end.
The correspondence between Ford and Carney signifies a rare agreement between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically had a strained relationship, causing divisions within Canada’s conservative movement.
In contrast to Ford’s proposal, Poilievre advocates for the removal of the GST from gas and diesel until December 31, along with the permanent elimination of clean fuel regulations. He argues that additional taxes on fuel not only burden drivers but also lead to increased costs across various sectors, contributing to higher prices for essential goods and services.
Finance Minister François-Philippe Champagne’s spokesperson emphasized the Liberal government’s commitment to enhancing affordability without confirming the extension of the excise tax holiday. The government aims to collaborate with provinces on initiatives that promote economic growth, competitiveness, and cost reduction in response to the current challenging global economic conditions.
