Ontario to Extend Cut on Gas, Fuel Taxes Through June 2024

Ontario Finance Minister Peter Bethlenfalvy tables the provincial budget at the legislature at Queen's Park in Toronto on March 23, 2023. The Canadian Press/Frank Gunn

Ontario has announced its plans to extend gas and fuel tax rate cuts through the end of June 2024.

The Doug Ford government plans to propose legislation that, if passed, would continue to cut prices at the pump by 5.7 cents per litre. This will be the second time the Ontario government has extended the gas tax cut.

Tax rate cuts were first announced in April 2022, dropping both the gas tax rate and the fuel tax rate to nine cents per litre for six months, from July to December 2022. In November of that year, Premier Ford announced an extension of the reduced rates until Dec. 31, 2023. The government is now proposing to extend the cuts until June 30, 2024.

Finance Minister Peter Bethlenfalvy said the government understands the financial pressure on families and businesses.

“We know that economic and geopolitical uncertainty will continue to weigh on household budgets right across the province,” he said during an Oct. 31 news conference.

“This is a challenging time, but we should all be confident in Ontario’s economy, its workers, and its people.”

Mr. Ford said the tax rate cuts would help households during the current economic situation.

“That’s money that goes back into people’s pockets to help cover central expenses,” he said during the conference. “We know every dollar counts... as inflationary pressures continue to strain household budgets.”

The government says the tax rate cuts have saved households $260 since they were introduced in July 2022. The gas tax was originally cut by 5.7 cents per litre while the fuel tax was reduced by 5.3 cents per litre.

Ontario Trucking Association president and CEO Stephen Laskowski said the cuts were welcome, adding that fuel is the second highest cost behind labour for the trucking industry.

“The announcement to extend fuel tax relief for the trucking industry is a measure that all Ontarians should applaud,” Mr. Laskowski said in the release. “Virtually every item or product Ontarians have at home or at their places of business was moved by truck.”

Ontario director of the Canadian Taxpayers Federation Jay Goldberg said the gas tax cut extension is “great news for Ontario taxpayers.”

“The Ontario government’s gas tax cut has saved the typical Ontario family hundreds of dollars over the past 18 months and this announcement will ensure that this critical relief continues into 2024,” said Mr. Goldberg in the release.

An update on the tax reduction extension will be provided by the province as part of its fall economic statement on Nov. 2.

Calls To Cut Carbon Tax

During the media conference, Mr. Ford and Mr. Bethlenfalvy both mentioned Ottawa’s carbon tax, saying it was a burden on Canadians and should also be cut.

“Once again, I’m calling on the federal government to eliminate the carbon tax,” Mr. Ford said. “If the federal government eliminated the carbon tax off the pumps alone, that’s another 14 cents—that’s 24 cents that goes back into people’s pockets.”

He said the carbon tax was raising the price “on absolutely everything from fuel and groceries to electricity.”

Prime Minister Justin Trudeau, on Oct. 26 announced a three-year pause on the heating oil carbon tax so Canadians could switch to electric heat pumps.

It’s a move that Alberta and Saskatchewan have called unfair because it largely benefits Atlantic Canada alone. Mr. Ford agreed.

Mr. Ford said the prime minister acknowledged how harmful the carbon tax is when he announced its removal from home heating oil last week.

“The fact is the vast majority, 95 percent of people in Ontario, do not heat their homes or businesses with oil,” he said. “It’s completely unfair that they still have to pay the carbon tax.”

Mr. Ford said he was urging the prime minister to get rid of the carbon tax altogether. He also said he had sent letters to Mr. Trudeau and Bank of Canada Governor Tiff Macklem calling for a pause on interest rate hikes.

“We need to tackle the root causes of inflation, so we can avoid these painful hikes in the future,” he said at the conference.