Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney requesting an extension of the federal gas excise tax holiday until the year’s end. Ford emphasized the inopportune timing of reintroducing the federal fuel excise tax on gasoline and diesel amidst ongoing financial challenges faced by Canadians related to housing, grocery prices, and daily expenses.
Initially implemented by Carney in April, the temporary removal of the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel was set until Sept. 7. Carney justified this move, estimated to cost $2.4 billion, as a means to alleviate short-term pressures resulting from the surge in global oil prices following the U.S.-Iran conflict.
In 2022, the Ford government introduced its own short-lived fuel tax holiday, reducing taxes on a liter of gas by 5.7 cents and on diesel by 5.3 cents. This adjustment harmonized the provincial tax rates on gas and diesel to nine cents per liter, leading to annual savings of approximately $115 per household, as outlined in the 2026 provincial budget.
Ford proposed aligning the federal government’s actions with Ontario’s efforts to lower costs by extending the federal fuel tax holiday until Jan. 1 and making the suspension permanent. 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 causing divisions within Canada’s conservative movement.
In contrast to Ford’s plea, Poilievre urged the Carney government to eliminate the GST on gas and diesel until Dec. 31 and permanently discard clean fuel regulations. Poilievre highlighted the burden these taxes place on consumers, affecting not only fuel prices but also escalating the costs of goods, transportation, and food, particularly in a context where Canadian grocery prices are rising faster than in other G7 nations.
A statement from Finance Minister François-Philippe Champagne’s spokesperson emphasized the Liberal government’s commitment to enhancing affordability and pursuing measures with provinces to bolster growth, competitiveness, and address economic challenges in the current global environment. However, no confirmation was provided regarding the potential extension of the excise tax holiday.