Ontario to Introduce Legislation to Cut Gas, Fuel Taxes

The temporary tax break would last six months starting July 1, 2022

A man pumps gas in Montreal, on March 4, 2022. The Canadian Press/Graham Hughes

The Ontario government is introducing legislation to cut gas and fuel taxes this summer, bringing some relief for residents amid rising fuel prices.

If passed, it would introduce a temporary six-month tax cut, reducing the gas tax by 5.7 cents per litre and fuel tax by 5.3 cents per litre, effective from July 1 to Dec. 31, 2022, the Ontario government said in an April 4 press release.

The Ontario government said it is also urging the federal government to help families and businesses impacted by its recent carbon tax hike, which raised gas prices by up to 11.05 cents per litre and diesel prices up to 13.41 cents per litre when it was increased on April 1, 2022.

“Now is the time for the federal government to join us in providing relief for hard-working Canadians by cutting the carbon tax," said Finance Minister Peter Bethlenfalvy said in an April 4 news release.

The Ontario government said their gas tax reduction is part of a larger package providing relief amid the rising cost of living. The relief policies include a rebate of licence plate sticker renewal fees paid since March 2020, elimination of the licence plate renewal fees going forward, and tax relief for workers.

In 2018, Premier Doug Ford promised to lower gas prices by 10 cents per litre through a tax cut and by eliminating the cap-and-trade system. In a press conference on April 4, Ford said this new legislation is part of an effort to fulfil those promises.

Ontario is not the only jurisdiction in the country offering relief to residents amid soaring gas prices and rising living costs.

In early March, the Alberta government announced that it will temporarily suspend its provincial fuel taxes on gas and diesel as of April 1, for as long as the West Texas Intermediate (WTI) oil price is above US$90 a barrel. The province is also offering a $150 rebate for electricity bills paid over this past winter.