Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney urging him to prolong the current federal gas excise tax suspension until the year’s end. Ford emphasized the inopportune timing of reintroducing the tax, citing threats of increased tariffs and the ongoing financial strains faced by Canadians in various aspects like housing, grocery expenses, and daily household costs.
Initially implemented in April, Carney’s temporary removal of the 10-cent excise tax on gas and four cents on diesel is set to expire on Labor Day, September 7. This measure, costing an estimated $2.4 billion, was introduced to alleviate short-term financial pressures resulting from the surge in global oil prices following the U.S.-Iran conflict.
In 2022, Ford’s government introduced its own short-term fuel tax relief, reducing taxes on gas by 5.7 cents per liter and on diesel by 5.3 cents per liter. This adjustment harmonized the provincial tax rates to nine cents per liter, resulting in annual household savings of approximately $115, as outlined in the 2026 provincial budget.
Ford’s letter to Carney proposed the extension of the federal fuel tax holiday until January 1, suggesting that the federal government align its efforts with Ontario’s initiative to make the tax suspension permanent. The call for extension has been echoed by the federal Conservatives since Carney’s initial announcement.
Despite historical tensions between Ford and Conservative Opposition Leader Pierre Poilievre, the two leaders found common ground in supporting the tax holiday extension. Poilievre, in addition to endorsing the extension, advocated for the removal of GST on gas and diesel until the year’s end and the permanent elimination of clean fuel regulations to alleviate the financial burden on Canadians.
Responding to the requests, Finance Minister François-Philippe Champagne’s spokesperson emphasized the government’s commitment to enhancing affordability and pursuing measures to address economic challenges on both domestic and global fronts. The government aims to collaborate with provinces to drive growth, competitiveness, and cost reductions amid the current economic climate.