Ontario Premier Doug Ford has formally requested Prime Minister Mark Carney to prolong the federal gas excise tax holiday until the end of this year. In a letter to Carney, Ford emphasized the inopportune timing of reinstating the federal fuel excise tax amidst escalating threats of additional tariffs and the ongoing financial strains faced by Canadians due to housing, grocery, and household expenses.
Previously, Carney had temporarily lifted the 10-cent federal excise tax on a liter of gas and the four-cent tax on diesel until September 7, coinciding with Labour Day. This decision, estimated to cost around $2.4 billion, aimed to alleviate the short-term financial pressures resulting from the surge in global oil prices triggered by geopolitical tensions.
In a parallel move, in 2022, the Ford administration introduced its own temporary fuel tax break, reducing the 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 for gas and diesel at nine cents per liter, resulting in an annual saving of approximately $115 for households, as outlined in the 2026 provincial budget.
Ford’s correspondence to the Prime Minister proposed an extension of the federal fuel tax holiday until January 1, suggesting that the federal government could mirror Ontario’s commitment to cost reduction by making the suspension permanent.
Since Carney’s initial announcement of the excise tax holiday on fuel, the federal Conservatives have consistently urged for an extension until year-end. Ford’s letter signifies a rare alignment between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically experienced strained relations causing divisions within the conservative movement in Canada.
In contrast to Ford’s plea, Poilievre advocates for the removal of GST on gas and diesel until December 31, along with the permanent elimination of clean fuel regulations. Poilievre argues that these tax measures burden not only drivers but also escalate the costs of goods and services, amplifying the already increasing grocery prices in Canada.
While Finance Minister François-Philippe Champagne’s spokesperson refrained from confirming any extension of the excise tax holiday, emphasizing the government’s commitment to enhancing affordability and pursuing initiatives with the provinces to lower costs and promote competitiveness in the current challenging global economic landscape.