Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney urging the extension of the federal gas excise tax holiday until the year’s end. Ford emphasized that with the current economic challenges faced by Canadians, including housing costs and grocery prices, it is not the appropriate time to reintroduce the federal fuel excise tax on gasoline and diesel.
Earlier in April, Carney had temporarily lifted the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until September 7, coinciding with Labour Day. The move, estimated to cost around $2.4 billion, was aimed at alleviating short-term pressures caused by the surge in global oil prices following escalating tensions between the U.S. and Iran.
In 2022, the Ford administration implemented its own temporary fuel tax holiday, reducing taxes on a liter of gas by 5.7 cents and on diesel by 5.3 cents. This adjustment harmonized the provincial tax rates on gas and diesel to just nine cents per liter, resulting in annual savings of approximately $115 per household as outlined in the 2026 provincial budget.
Ford proposed that if Carney extends the federal fuel tax holiday until January 1, the federal government should also consider making the suspension permanent to parallel Ontario’s efforts in lowering costs.
The federal Conservatives, including Ford and Opposition Leader Pierre Poilievre, have been advocating for the extension of the excise tax holiday until the end of the year. This rare alignment between Ford and Poilievre, who have had a strained relationship, underscores their shared goal on this issue despite historical disagreements within the conservative movement in Canada.
In contrast to Ford’s request, Poilievre is pushing for the removal of the GST on gas and diesel until December 31, along with the permanent elimination of clean fuel regulations. Poilievre argued that additional tax hikes on fuel would burden Canadians and lead to higher costs across various sectors, including increased grocery prices.
The Finance Minister’s spokesperson, François-Philippe Champagne, refrained from confirming a potential extension of the excise tax holiday, emphasizing the government’s commitment to enhancing affordability and pursuing measures to reduce costs and boost competitiveness amid the challenging global economic landscape.