Premier Doug Ford has announced the extension of the province’s temporary gas and fuel tax rate cut until the end of 2024. Initially set to expire on June 30, the extension comes as part of the March 26 budget release.
“It’s never been more important to keep costs down. We’re on a relentless mission to save people money.” Ford remarked at a Mississauga press conference.
The tax reduction, which has been in effect since July 2022, lowers the tax on gasoline by 5.7 cents per litre and the fuel tax by 5.3 cents per litre.
Scott Blodgett, senior media relations advisor at the Ministry of Finance, emphasizes the government’s commitment to cost reduction: “The government has a plan to keep costs down for Ontario families and businesses; as part of that plan, it extended the gas and fuel (i.e., diesel) tax rate cuts until December 31, 2024, which will save Ontario households on average $320.”
The gas tax cut was part of Ford’s campaign promise in 2018 to lower gas prices by 10 cents per litre, expected to be achieved by eliminating the province’s cap-and-trade system. However, the elimination of this system caused the federal government to step in with its own carbon tax — the federal carbon price backstop — nullifying any expected savings.
Despite legal challenges against the levy, Ford’s government ultimately lost the battle, prompting renewed criticism of the federal government. “With the federal government about to increase its costly carbon tax, it’s never been more important to provide relief at the pumps and put hundreds of dollars back into peoples’ pockets,” Ford said on March 25.
While the tax break provides relief to households, there’s an estimated cost of about $1.2 billion per year. Concerns have also risen regarding its impact on municipality funding received “through the provincial Gas Tax program,” which supports vital local infrastructure projects.
“The government has taken action to ensure that the cut to the gas tax rate will not impact funding that municipalities receive through the provincial Gas Tax program,” said Blodgett, reiterating the government’s commitment to balancing cost reduction efforts. Blodgett also referred Excalibur to the municipality fund allocation for more information here.
Ford’s announcement of the extension to the gas and fuel tax rate cuts is part of a broader effort to alleviate financial burdens on Ontarians. Additional measures include “eliminating the license plate renewal fee, saving the average household $600 to date.”
Ontario is also banning new tolls on 400-series highways and freezing driver’s license and photo card fees permanently — efforts that are estimated to save $66 million for drivers over the next five years.” Additionally, the launch of One Fare will provide daily public transit riders on participating systems with an average annual savings of $1,600. Lastly, the government has ended the Drive Clean Program, resulting in annual taxpayer savings of over $40 million.
In a separate development, Ford proposed legislation requiring a referendum before introducing any future provincial carbon tax, cap-and-trade system, or other carbon pricing program. Such a move, if passed, would give voters a “direct say,” Ford stated.
Although opposition parties called Ford’s announcement “performative political games,” this proposal reflects the contentious and ongoing debate over carbon pricing in Ontario.
