Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney requesting an extension of the federal gas excise tax holiday until the year’s end. Ford emphasized that with ongoing economic challenges, including housing costs and grocery expenses, reinstating the federal fuel excise tax on gasoline and diesel would burden Canadians further.
Initially implemented in April, Carney suspended the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until September 7. Carney justified this move, estimated to cost $2.4 billion, as a short-term relief strategy to mitigate the impacts of rising global oil prices following geopolitical tensions between the U.S. and Iran.
In 2022, the Ford government introduced its own temporary fuel tax break, reducing taxes on gas by 5.7 cents per liter and on diesel by 5.3 cents per liter, aligning the provincial tax rate on gas and diesel to nine cents. This adjustment, as outlined in the 2026 provincial budget, aims to save households approximately $115 annually.
Ford urged Carney to extend the federal fuel tax holiday until January 1 and proposed that the federal government consider permanently suspending the tax to match Ontario’s cost-cutting efforts. This initiative aligns with the federal Conservatives’ calls, supported by Ford and Conservative Opposition Leader Pierre Poilievre, to prolong the tax holiday until year-end.
While Ford seeks an extension of the excise tax suspension, Poilievre advocates for the removal of the GST on gas and diesel until December 31 and the permanent elimination of clean fuel regulations. Poilievre criticized the potential tax hike, highlighting its adverse effects on consumer expenses and the overall economy.
Finance Minister François-Philippe Champagne’s spokesperson, John Fragos, affirmed the government’s commitment to enhancing affordability without confirming plans to extend the excise tax holiday. Fragos emphasized the government’s dedication to fostering economic growth, reducing costs, and addressing global economic challenges.
The ongoing discussions surrounding the excise tax holiday extension reflect the collaborative efforts between provincial and federal leaders to alleviate financial burdens on Canadians during uncertain economic times.