Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney urging 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 amidst escalating tariffs and ongoing financial burdens faced by Canadians.
In response to the current economic challenges stemming from the oil price surge triggered by geopolitical tensions, Carney had previously suspended the 10-cent federal excise tax on gasoline and four cents per liter on diesel until Labor Day. This move, estimated to cost $2.4 billion, aimed to alleviate short-term financial pressures on Canadians.
Ford’s administration had introduced its own temporary fuel tax relief in 2022, reducing taxes on gas and diesel by 5.7 cents and 5.3 cents per liter, respectively. This adjustment aligned the provincial tax rates, resulting in substantial annual savings for households, as outlined in the 2026 provincial budget.
Expressing alignment with the federal Conservatives, Ford proposed a potential extension of the federal fuel tax holiday until January 1, with a call for a permanent suspension to mirror Ontario’s efforts in cost reduction. Notably, this collaboration between Ford and Conservative Opposition Leader Pierre Poilievre signifies a rare instance of agreement between the two leaders amid longstanding tensions within Canada’s conservative movement.
In contrast to Ford’s stance, Poilievre advocated for the removal of GST on gas and diesel until the year’s end, along with a permanent elimination of clean fuel regulations. Poilievre emphasized the adverse impact of additional taxes on consumer goods, transportation costs, and ultimately grocery prices, stressing the need for affordability measures.
While Finance Minister François-Philippe Champagne’s spokesperson refrained from confirming an extension of the excise tax holiday, the Liberal government’s commitment to enhancing affordability and addressing economic challenges was underscored. The government aims to collaborate with provinces to advance growth, competitiveness, and lower costs amidst the current global economic uncertainties.