Ontario government introduces legislation to temporarily cut gas, fuel taxes

The announcement comes as prices at the pump surge across Canada

By Allison Jones, The Canadian Press

Ontario plans to temporarily reduce taxes on gas and diesel, but it will only take effect after the June provincial election.

The Progressive Conservative government introduced legislation on Monday that, if passed, would lower the gas tax by 5.7 cents per litre and the fuel tax — which includes diesel — by 5.3 cents per litre for six months.

The change would take effect on July 1 and end on Dec. 31.

The announcement comes as prices at the pump surge across Canada. Average prices in Ontario are hovering around $1.70 per litre.

“The people of Ontario and across the country have just been getting gouged, day in and day out,” Premier Doug Ford said at an unrelated announcement in Oshawa, Ont.

“You see the gas prices, just skyrocketing, unprecedented prices. And it’s about time that the government starts putting money back into the people’s pocket instead of the government’s pocket. 

Ford first promised to cut the provincial gas tax by that amount nearly four years ago, during the 2018 election campaign.

One of the Progressive Conservatives’ signature pocketbook promises was to cut gas prices by 10 cents per litre. The party said that would be accomplished by scrapping Ontario’s cap-and-trade system and cutting the provincial gas tax.

The government did end cap-and-trade soon after the 2018 election, meant to lower prices by 4.3 cents a litre, but that prompted the federal carbon tax backstop to kick in, negating those savings. Ford’s government tried fighting the levy in court, but lost.

Last fall, Ford promised to make good on his 2018 promise to implement the remaining 5.7-cent cut before the upcoming budget, but then he backtracked soon after, saying he would only implement such a cut if the federal government did something similar.

Ford said Monday the “time wasn’t right” for him to introduce a cut to gas prices in the fall.

“The gas prices weren’t where they’re at right now,” he said.

Ford said he is still encouraging Ottawa to implement a further cut.

Two cents per litre from the provincial gas tax revenue goes to municipalities for public transit and the government says that funding will not be affected.

The Canadian Taxpayers’ Federation applauded Ontario’s announcement, but lamented its temporary nature.

“While Ontario taxpayers will welcome lower gas prices at the pumps, Ford promised Ontarians four years ago that they would receive a permanent gas tax cut,” the group’s Ontario director Jay Goldberg said in a written statement.

The New Democrats have called for gas price regulation and have introduced a private member’s bill to that effect for a third time, but Energy Minister Todd Smith has cited Ontario Energy Board studies suggesting that wouldn’t actually lower prices.

This report by The Canadian Press was first published April 4, 2022.

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