Ontario Premier Doug Ford has sent a letter to Prime Minister Mark Carney, urging him to extend the federal gas excise tax holiday until the year’s end. Ford emphasized the current economic challenges faced by Canadians, including housing costs, grocery prices, and everyday expenses, making it unsuitable to reintroduce the federal fuel excise tax on gasoline and diesel. Carney had previously suspended the 10-cent federal excise tax on gas and four cents on diesel until September 7 as a temporary measure to alleviate the short-term impacts of rising global oil prices due to geopolitical tensions.
In response to the federal initiative, the Ford government introduced its own temporary fuel tax holiday in 2022, reducing taxes on gas and diesel by 5.7 cents and 5.3 cents per liter, respectively. This adjustment aligned the provincial tax rates on gas and diesel to nine cents per liter, resulting in annual savings of approximately $115 per household. Ford proposed that if Carney extends the federal fuel tax holiday until January 1, the federal government should consider making the suspension permanent to mirror Ontario’s efforts in reducing costs.
The federal Conservatives have been advocating for the extension of the fuel excise tax holiday, with Ford’s letter highlighting a rare instance of alignment between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre. Despite their historical differences, this shared stance on tax relief indicates a unifying point for the two leaders within the conservative movement. While Ford focused on the gas excise tax, Poilievre called for the removal of GST on gas and diesel until December 31, along with the permanent elimination of clean fuel regulations, citing concerns over rising consumer costs and the impact on various industries.
Finance Minister François-Philippe Champagne’s spokesperson emphasized the Liberal government’s commitment to enhancing affordability and pursuing measures with the provinces to promote economic growth and competitiveness while addressing cost challenges in the current global economic landscape. The government’s stance on extending the excise tax holiday remains uncertain, with a focus on collaborating with provinces to mitigate financial burdens and enhance economic resilience.