Ontario Premier Doug Ford has penned a letter to Prime Minister Mark Carney urging the extension of the federal gas excise tax holiday until the end of this year. Ford emphasized the need to maintain the tax relief amidst economic challenges, citing President Trump’s tariff threats and the ongoing financial burdens faced by Canadians in various aspects such as housing, groceries, and daily expenses.
Earlier in April, Carney temporarily suspended the 10-cent federal excise tax on gasoline and four cents per liter on diesel until September 7, coinciding with Labour Day. This move, estimated to cost $2.4 billion, aimed to alleviate short-term pressures caused by 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 by 5.7 cents per liter and on diesel by 5.3 cents per liter. This adjustment harmonized the provincial tax rates on fuel, resulting in significant annual savings for households as outlined in the 2026 Ontario budget. Last year, this tax reduction was made permanent.
Ford’s letter advocated for aligning the federal government’s actions with Ontario’s efforts to lower costs by making the tax holiday permanent if extended until January 1. The federal Conservatives have been pushing for the holiday’s extension throughout the year, finding common ground with Ford in this instance.
The strained relationship between Ford and Conservative Opposition Leader Pierre Poilievre has seen a rare moment of agreement through Ford’s letter to Carney. Poilievre, in addition to supporting the tax holiday extension, proposed the removal of GST on fuel until the year’s end and the permanent elimination of clean fuel regulations to further ease financial burdens on Canadians.
Finance Minister François-Philippe Champagne’s spokesperson emphasized the Liberal government’s commitment to enhancing affordability without confirming plans for extending the excise tax holiday. The government aims to collaborate with provinces on initiatives that promote growth, competitiveness, and cost reduction in the current challenging economic environment.