Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to prolong the ongoing federal gas excise tax holiday until the year-end. Ford emphasized in his letter that with escalating threats of additional tariffs by President Trump and Canadians struggling with the rising costs of housing, groceries, and daily expenses, it is not the appropriate time to reimpose the federal fuel excise tax on gasoline and diesel.
Earlier in April, Carney had temporarily waived the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until September 7, coinciding with Labour Day. This move, estimated to cost $2.4 billion, aimed to assist Canadians in mitigating the short-term financial pressures resulting from the surge in global oil prices triggered by 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 aligned the provincial tax rates on gas and diesel to nine cents per liter, leading to an annual household savings of approximately $115 as outlined in the 2026 provincial budget.
Ford proposed that if Carney extends the federal fuel tax holiday until January 1, the federal government could mirror Ontario’s commitment to cost reduction by making the suspension permanent. The federal Conservatives have been advocating for this extension since Carney initially announced the tax holiday.
The letter from Ford signifies a rare instance of agreement between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically had a strained relationship, causing divisions within Canada’s conservative movement. Poilievre, in addition to supporting Ford’s request, also urged the Carney government to eliminate the GST on gas and diesel until December 31 and permanently abolish clean fuel regulations to alleviate financial burdens on Canadians.
While Ford and Poilievre advocate different measures, both aim to alleviate the financial strain on Canadians. The Finance Minister’s spokesperson, François-Philippe Champagne, did not confirm any extension of the excise tax holiday but reiterated the Liberal government’s commitment to enhancing affordability and pursuing initiatives with the provinces to lower costs amidst the challenging global economic climate.
