Ford’s gas tax cut has meant real relief for Ontario families. The typical two-car Ontario family has saved about $8 per week at the pumps since July 2022. Pictured: Premier Doug Ford. Photo Credit: The Canadian Press/Spencer Colby.
Premier Doug Ford has delivered real relief to Ontario families through his temporary 6.4 cent per litre gas tax cut, which has been in place since July of 2022.
With the tax cut’s expiry looming, Ford should follow the lead of Newfoundland and Labrador Premier Andrew Furey and extend the gas tax cut into 2025.
The government of Newfoundland and Labrador announced earlier this month that the province’s temporary 8.05 cent per litre gas tax cut, which has been in place since June 2022, will be left in place for at least another 12 months.
In announcing the extension, Newfoundland and Labrador Finance Minister Siobhan Coady noted that affordability remains top of mind for taxpayers and cutting gas taxes is one of the best ways the government can improve it.
The same rationale rings true in Ontario.
When Ford announced plans to extend the gas tax cut last fall, he spoke about just how much of a difference lower gas taxes can make in improving affordability.
“We know that every dollar helps, and this gas tax cut is another way we’re keeping costs down for Ontario families and businesses,” Ford said when announcing the extension. “As we continue to deal with lingering inflation, our government is continuing to provide people and businesses relief at the pumps for another six months.”
Ford’s gas tax cut has meant real relief for Ontario families. The typical two-car Ontario family has saved about $8 per week at the pumps since July 2022. After 89 weeks, that family has saved a jaw-dropping $712.
With 50 per cent of Canadians now saying they’re $200 away from not being able to pay their bills and 400,000 Ontarians working two jobs just to make ends meet, $712 is nothing to scoff at.
Ontario taxpayers have saved roughly $2.1 billion since the Ford government put its gas tax cut in place 20 months ago. That’s the largest tax cut Ontarians have seen this century.
When Ford announced his six-month gas tax cut extension last October, he emphasized inflation and affordability as reasons why the gas tax cut needed to be kept in place.
Have circumstances changed?
The inflation rate hasn’t. Since October, Ontario’s inflation rate has stood at roughly three per cent, still 50 per cent higher than the Bank of Canada’s goal of two per cent. If inflation was a reason to keep the gas tax cut last October, it is now as well.
Gas prices also remain roughly the same. That means it’s just as expensive for parents to drive their kids to school and drive themselves to work.
And gas taxes are scheduled to shoot up by 3.3 cents per litre on April 1 when the Trudeau government hikes its federal carbon tax. That will make pump prices more expensive, making the Ford gas tax cut all the more essential.
The Furey government announced its decision to extend its temporary gas tax cut ahead of Newfoundland and Labrador’s 2024 budget. If Ford is wise, he will follow suit.
Ontario plans to release its 2024 budget on March 26.
Although the gas tax cut is not set to expire until the end of June, Ford should act now to give taxpayers and businesses a sense of certainty. And he should make that extension last well into next year, as Furey plans to do.
Ontarians have depended on gas tax relief to help make ends meet. Taxpayers shouldn’t have to worry about whether the Ford government will continue to help families deal with today’s affordability challenges.
Ford’s gas tax relief has provided Ontarians with the largest tax cut the province has seen in decades. Taxpayers are still struggling, so Ford must act and extend the gas tax cut well into next year.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
