Ontario Premier Doug Ford has sent a letter to Prime Minister Mark Carney requesting an extension of the federal gas excise tax holiday until the year’s end. Ford emphasized the need to maintain the current tax relief amidst concerns over potential tariff increases and the financial strain faced by Canadians due to various expenses like housing and groceries.

Initially implemented in April, Carney temporarily eliminated the 10-cent federal excise tax on gasoline and four cents per liter on diesel until September 7. This move, estimated to cost $2.4 billion, aimed to alleviate the short-term economic pressures stemming from the surge in global oil prices following geopolitical tensions.

In response to Carney’s initiative, the Ford government introduced its own temporary fuel tax holiday in 2022, reducing taxes on gasoline and diesel by 5.7 cents and 5.3 cents per liter, respectively. This adjustment aligned the provincial tax rates for gasoline and diesel at nine cents per liter, resulting in annual savings of about $115 per household, as outlined in the 2026 provincial budget.

Ford urged Carney to extend the federal fuel tax holiday until January 1 and proposed that the federal government match Ontario’s efforts to make the tax suspension permanent. This aligns with the federal Conservatives’ advocacy for extending the tax relief until the year’s end, with supportive voices from Progressive Conservative Premier Ford and Conservative Opposition Leader Pierre Poilievre finding common ground on the matter.

Conversely, Poilievre has advocated for additional measures, including the removal of GST from gas and diesel until December 31, and the permanent elimination of clean fuel regulations. Poilievre argued that such taxes adversely impact consumers, leading to increased costs across various sectors, particularly affecting grocery prices in Canada compared to other G7 countries.

While Finance Minister François-Philippe Champagne’s spokesperson refrained from confirming plans to extend the excise tax holiday, the Liberal government remains committed to enhancing affordability and exploring avenues to lower costs in light of the current challenging global economic landscape.