Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to extend the federal gas excise tax holiday until the end of this year. Ford emphasized the inopportune timing of reintroducing the federal fuel excise tax, citing ongoing economic challenges faced by Canadians in housing costs, grocery prices, and daily household expenses.
In April, Carney temporarily suspended the 10-cent federal excise tax on gasoline and four cents per liter on diesel until Labor Day, costing an estimated $2.4 billion. This measure aimed to alleviate short-term financial pressures due to the surge in global oil prices following the U.S.-Iran conflict.
In 2022, the Ford administration introduced its own temporary fuel tax relief, reducing taxes on gas by 5.7 cents per liter and on diesel by 5.3 cents per liter. This adjustment harmonized the provincial tax rates on gas and diesel to nine cents per liter, resulting in annual savings of approximately $115 per household as outlined in the 2026 Ontario budget.
Ford proposed that if Carney extends the federal fuel tax holiday until January 1, the federal government should consider making the suspension permanent to align with Ontario’s cost-cutting efforts.
The federal Conservatives have persistently urged for an extension of the excise tax holiday since Carney’s initial announcement. Ford’s letter to Carney symbolizes a rare concurrence between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically had strained relations causing divisions within the conservative movement in Canada.
Poilievre, unlike Ford, advocates for the removal of GST from gas and diesel until the end of the year and the permanent elimination of clean fuel regulations. He criticized the potential gas tax hike, highlighting its broader impact on consumer prices, particularly on groceries, which are already escalating at a faster rate in Canada compared to other G7 countries.
Regarding the potential extension of the excise tax holiday, Finance Minister François-Philippe Champagne’s spokesperson, John Fragos, emphasized the government’s commitment to enhancing affordability and collaborating with provinces to address economic challenges amid the current global economic climate.
