Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to extend the current federal gas excise tax suspension until the year’s end. Ford emphasized the importance of maintaining this tax break amidst economic uncertainties, including potential tariff increases and ongoing financial pressures faced by Canadians.
Originally implemented by Carney in April, the temporary removal of the 10-cent federal excise tax on gasoline and four cents per liter on diesel is set to expire on Labor Day, costing an estimated $2.4 billion. The initiative aimed to alleviate short-term financial strains resulting from global oil price spikes due to geopolitical tensions.
In a bid to further alleviate financial burdens, the Ford government introduced its own temporary fuel tax reduction in 2022, cutting taxes on gas and diesel by 5.7 cents and 5.3 cents per liter, respectively. This move aligned the provincial tax rates for gas and diesel at nine cents per liter, generating an annual household savings of approximately $115, as outlined in the 2026 provincial budget.
Ford’s letter to Carney also proposed the possibility of permanently suspending the federal fuel excise tax if extended until January 1, aligning with Ontario’s commitment to reducing costs. The call for extension has garnered support from federal Conservatives, including Opposition Leader Pierre Poilievre, who advocates for the removal of the Goods and Services Tax (GST) on fuel and the permanent elimination of clean fuel regulations.
While Ford and Poilievre have historically experienced strained relations, their mutual support for the tax relief extension marks a rare instance of agreement. Poilievre’s push for additional tax relief highlights concerns over rising consumer prices and the impact on various sectors, emphasizing the need for affordability measures.
Finance Minister François-Philippe Champagne’s office refrained from confirming plans to extend the excise tax holiday, emphasizing the government’s commitment to enhancing affordability and addressing economic challenges amid the current global economic climate.