Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney, urging him to prolong the federal gas excise tax relief until the end of this year. Ford emphasized that amid President Trump’s threats of additional tariffs and the ongoing challenges Canadians face with housing costs, grocery prices, and everyday expenses, re-imposing the federal fuel excise tax on gasoline and diesel would be ill-timed.
In April, Carney temporarily suspended the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until Sept. 7, coinciding with Labour Day. This measure, estimated to cost around $2.4 billion, was implemented to help Canadians navigate the short-term pressures resulting from a surge in global oil prices following the U.S.-Iran conflict.
In 2022, the Ford government introduced its own short-term fuel tax break by reducing taxes on a liter of gas by 5.7 cents and on diesel by 5.3 cents. This adjustment aligned 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 provincial budget. Last year, this tax cut was made permanent.
Ford’s letter to Carney proposed an extension of the federal fuel tax holiday until Jan. 1, with a call for the federal government to mirror Ontario’s efforts by making the suspension of the tax permanent to further reduce costs.
The federal Conservatives have been advocating for an extension of the excise tax holiday on fuel until the year-end since Carney’s initial announcement. Ford’s letter signifies a rare instance of alignment between Progressive Conservative Premier Ford and Conservative Opposition Leader Pierre Poilievre, who have historically had a strained relationship, leading to divisions within Canada’s conservative movement.
Contrary to Ford’s request, Poilievre is urging the government to eliminate the GST on gas and diesel until Dec. 31 and permanently discard clean fuel regulations. Poilievre argued that Canadians already face higher pump prices than Americans and criticized Carney’s proposed gas tax hike, highlighting its broader impact on consumer prices and affordability.
A spokesperson for Finance Minister François-Philippe Champagne refrained from confirming plans to extend the excise tax holiday, emphasizing the Liberal government’s commitment to enhancing affordability and exploring measures with provinces to lower costs and address economic challenges in the current global scenario.