Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to extend the federal gas excise tax holiday until the end of the year. Ford emphasized the inopportune timing for reintroducing the federal fuel excise tax amidst ongoing economic challenges faced by Canadians, including housing costs, grocery prices, and everyday expenses.
Earlier in April, Carney had temporarily suspended the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until Labor Day, September 7th. This measure, estimated to cost $2.4 billion, aimed to alleviate short-term pressures caused by the surge in global oil prices due to geopolitical tensions.
In 2022, the Ford government introduced its own temporary fuel tax holiday, 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, resulting in savings of about $115 per year for households as outlined in the 2026 provincial budget.
Ford proposed that if Carney extends the federal fuel tax holiday until January 1st, the federal government could consider making the suspension permanent, aligning with Ontario’s efforts to reduce costs. The federal Conservatives have also been advocating for the extension of the tax holiday until year-end.
Notably, Ford’s letter signifies a rare alignment between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically had a strained relationship, causing divisions within the conservative movement in Canada.
In contrast to Ford’s request, Poilievre urged the Carney government to eliminate the GST on gas and diesel until December 31st and permanently discard clean fuel regulations. Poilievre emphasized that additional taxes on fuel would impact not only drivers but also escalate prices across various sectors, including groceries.
While Finance Minister François-Philippe Champagne’s spokesperson did not confirm plans to extend the excise tax holiday, they reiterated the government’s commitment to enhancing affordability and collaborating with provinces to lower costs and address economic challenges amid the current global economic climate.