Ontario Premier Doug Ford has reached out to Prime Minister Mark Carney, urging him to prolong the federal gas excise tax relief until the year’s end. Ford emphasized the importance of maintaining the tax suspension in light of potential tariff threats and the ongoing financial challenges faced by Canadians.
Initially implemented in April, Carney temporarily eliminated the 10-cent federal excise tax on gasoline and four cents per liter on diesel until September 7. This measure, costing an estimated $2.4 billion, aimed to alleviate short-term economic pressures arising from global oil price fluctuations due to geopolitical tensions.
In 2022, Ford’s administration introduced a temporary fuel tax reduction, cutting the taxes on gasoline and diesel by 5.7 cents and 5.3 cents per liter, respectively. This adjustment aligned the provincial tax rates for both fuels to nine cents per liter, resulting in annual household savings of about $115 as outlined in the 2026 provincial budget.
Ford proposed that if Carney extends the federal fuel tax break until January 1, the federal government should consider making the suspension permanent, mirroring Ontario’s efforts to reduce costs for its residents.
The federal Conservatives have been advocating for the extension of the excise tax holiday since Carney’s initial announcement. Ford’s letter to Carney signifies a rare instance of agreement between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically had a strained relationship leading to divisions within the conservative movement in Canada.
In contrast to Ford’s request, Poilievre is pushing for the removal of GST on gas and diesel until December 31 and the permanent elimination of clean fuel regulations, citing concerns about the impact of additional taxes on consumer expenses and the rising cost of goods and services.
While Finance Minister François-Philippe Champagne’s spokesperson did not confirm plans to extend the excise tax relief, they emphasized the Liberal government’s commitment to enhancing affordability and collaborating with provinces to address economic challenges amid the current global economic climate.