Ontario Premier Doug Ford has reached out to Prime Minister Mark Carney, urging him to prolong the federal gas excise tax exemption until the end of this year. Ford emphasized the inopportune timing of reintroducing the federal fuel excise tax amid threats of additional 50 per cent tariffs by President Trump and the ongoing financial challenges faced by Canadians, including housing expenses, grocery prices, and daily household costs.

In April, Carney temporarily eliminated the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel until Labor Day on September 7. This move, estimated to cost about $2.4 billion, aimed to alleviate short-term financial pressures arising from the surge in global oil prices due to geopolitical tensions involving the U.S. and Iran.

In 2022, the Ford administration implemented its own temporary fuel tax relief, reducing taxes on gas and diesel by 5.7 cents and 5.3 cents per liter, respectively. This adjustment harmonized the provincial tax rates on gas and diesel to a total of nine cents, resulting in annual savings of approximately $115 per household, as outlined in the 2026 provincial budget.

Ford’s letter to Carney proposed extending the federal fuel tax exemption until January 1, with a suggestion for the federal government to mirror Ontario’s initiative by making the tax suspension a permanent fixture to reduce costs continuously.

Following Carney’s announcement of the excise tax holiday on fuel, the federal Conservatives have advocated for extending this relief until the year’s end. Ford and Conservative Opposition Leader Pierre Poilievre, despite their historically strained relationship, found common ground in supporting the tax holiday extension.

In contrast to Ford’s request, Poilievre urged the Carney government to eliminate the GST on gas and diesel until December 31 and permanently revoke clean fuel regulations. Poilievre emphasized the potential adverse impacts of increased gas taxes on consumers, driving up prices of essential goods and groceries, already escalating faster in Canada compared to other G7 nations.

A spokesperson for Finance Minister François-Philippe Champagne refrained from confirming a potential extension of the excise tax holiday, highlighting the Liberal government’s commitment to enhancing affordability and collaborating with provinces to address economic challenges amidst the current global economic landscape.