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 year-end. Ford emphasized the current economic challenges faced by Canadians, citing threats of increased tariffs and rising living costs. Carney had initially removed the 10-cent federal excise tax on gasoline and four cents on diesel until Labor Day, aiming to alleviate short-term pressures caused by oil price spikes.
In response to Carney’s initiative, the Ford government introduced its own temporary fuel tax reduction in 2022, aligning provincial gas and diesel tax rates to nine cents per liter. This move, as per the 2026 provincial budget, is estimated to save households approximately $115 annually. Ford proposed that if Carney extends the federal fuel tax holiday until January 1, the federal government could consider making the suspension permanent to mirror Ontario’s cost reduction efforts.
The federal Conservatives have been advocating for the extension of the excise tax holiday, aligning with Ford’s request. The letter from Ford to Carney signifies a rare agreement between the Progressive Conservative premier and Conservative Opposition Leader Pierre Poilievre, who have historically had a strained relationship. Poilievre has additionally called for the removal of GST on gas and diesel until the year-end and the permanent elimination of clean fuel regulations to further ease financial burdens on Canadians.
Finance Minister François-Philippe Champagne’s spokesperson stated that the government’s focus is on enhancing affordability and economic competitiveness, without confirming the extension of the excise tax holiday. The government aims to collaborate with provinces on initiatives to reduce costs and enhance economic growth amidst the current global economic challenges.