Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to extend the current federal gas excise tax holiday until the year’s end. Ford emphasized the importance of maintaining this tax relief, citing concerns over looming additional tariffs and the financial strain faced by Canadians due to housing costs, grocery prices, and everyday expenditures.
The temporary removal of the 10-cent federal excise tax on gas and four cents per litre on diesel, set to expire on Labour Day, was implemented by Carney in response to global oil price surges caused by geopolitical tensions. The estimated $2.4 billion cost of this measure was aimed at easing short-term economic pressures on Canadians.
In 2022, the Ford government introduced its own temporary fuel tax holiday, reducing taxes on gas and diesel by 5.7 cents and 5.3 cents per litre, respectively. This adjustment aligned the provincial tax rates on gasoline and diesel to a combined nine-cent reduction, resulting in annual savings of approximately $115 per household, as outlined in the 2026 provincial budget.
Ford urged Carney to consider extending the federal fuel tax holiday to January 1, suggesting that the federal government could follow Ontario’s lead in permanently reducing costs. The Progressive Conservative premier’s letter highlighted a rare agreement between Ford and Conservative Opposition Leader Pierre Poilievre on this issue, despite their historically strained relationship causing divisions within the conservative movement in Canada.
In contrast to Ford’s proposal, Poilievre called for the removal of GST on gas and diesel until the year’s end, along with the permanent elimination of clean fuel regulations. Poilievre argued that additional taxes on fuel would escalate consumer expenses across various sectors, particularly impacting grocery prices, which have been rising faster in Canada than in other G7 nations.
Finance Minister François-Philippe Champagne’s spokesperson refrained from confirming plans to extend the excise tax holiday, emphasizing the Liberal government’s commitment to enhancing affordability and pursuing initiatives with provinces to lower costs and address economic challenges amid the current global financial climate.