Ontario Premier Doug Ford has formally requested an extension of the federal gas excise tax holiday from Prime Minister Mark Carney, urging for its continuation until the end of the year. Ford emphasized the inopportune timing of reintroducing the federal fuel excise tax amid ongoing economic challenges faced by Canadians, including housing costs, grocery prices, and daily household expenses.
Initially implemented by Carney in April, the temporary removal of the 10-cent federal excise tax on gasoline and four cents per liter on diesel is set to expire on Labor Day, costing an estimated $2.4 billion. This measure was introduced as a short-term relief to alleviate pressures stemming from the surge in global oil prices following geopolitical tensions.
In 2022, the Ford administration introduced its own temporary fuel tax holiday, reducing taxes on gasoline and diesel by 5.7 cents and 5.3 cents per liter, respectively. This adjustment aimed to align the provincial tax rates on fuel, resulting in significant annual savings for households as outlined in the 2026 provincial budget. Subsequently, this tax reduction was made permanent last year.
In his correspondence to Carney, Ford proposed extending the federal fuel tax holiday until January 1 and suggested that the federal government consider making the suspension permanent to mirror Ontario’s efforts in lowering costs for residents. The request aligns with the federal Conservatives’ ongoing advocacy for extending the tax holiday until the year’s end.
The letter from Ford also highlighted a rare instance of unity between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically experienced strained relations. The leaders’ shared stance on the tax holiday contrasts with Poilievre’s additional proposals, which include removing the GST on gas and diesel until December 31 and permanently eliminating clean fuel regulations.
Meanwhile, Finance Minister François-Philippe Champagne’s spokesperson emphasized the Liberal government’s commitment to enhancing affordability without confirming potential extensions of the excise tax holiday. The government aims to collaborate with provinces on initiatives that promote growth, competitiveness, and cost reduction in response to the prevailing challenging global economic conditions.