Ontario Premier Doug Ford has sent a letter to Prime Minister Mark Carney requesting an extension of the federal gas excise tax holiday until the end of this year. Ford emphasized the importance of maintaining the tax relief, given the current economic challenges facing Canadians, including housing costs and everyday expenses.
Earlier this year, Carney temporarily suspended the 10-cent federal excise tax on gasoline and four cents on diesel until September 7, in response to the spike in global oil prices. The temporary measure was intended to alleviate short-term financial pressures on Canadians.
In 2022, the Ford government introduced its own temporary fuel tax holiday, 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 fuel to nine cents per liter, resulting in savings of about $115 per year for households.
Ford proposed that if the federal fuel tax holiday is extended until January 1, the federal government should consider making the suspension permanent to align with Ontario’s efforts to lower costs for its residents.
The call for an extension of the excise tax holiday has been supported by the federal Conservatives, with Ford and Conservative Opposition Leader Pierre Poilievre finding common ground on this issue. This collaboration between the Progressive Conservative premier and the Conservative Opposition Leader is a rare occurrence, given their historical differences within the conservative movement.
In contrast to Ford’s proposal, Poilievre is advocating for the removal of GST on gas and diesel until the end of the year and a permanent elimination of clean fuel regulations. Poilievre argued that additional taxes on fuel would lead to higher prices for essential goods, exacerbating the existing affordability challenges faced by Canadians.
While Finance Minister François-Philippe Champagne’s office did not confirm plans to extend the excise tax holiday, they emphasized the government’s commitment to enhancing affordability and addressing economic challenges in the current global landscape.