Ontario Premier Doug Ford says he is cutting the province’s gas tax by 5.7 cents a litre to help drivers weather high prices at the pumps. But the cut is temporary and won’t take effect until July 1 – a month after the province goes to the polls.
His government announced on Monday that it was introducing legislation to cut the gas tax for what Mr. Ford said was a “minimum” of six months, starting July 1. The relief will come long after both the June 2 election and the rise in global oil prices prompted by Russia’s invasion of Ukraine.
The legislation would also cut the fuel tax, which includes diesel, by 5.3 cents. The gas tax that Ontario collects at the pumps would go to 9 cents a litre from 14.7 cents a litre. Emily Hogeveen, a spokeswoman for Finance Minister Peter Bethlenfalvy, said in an e-mail the move would cost the government $645-million this year.
Speaking at an auto industry announcement in Oshawa, Ont., Mr. Ford insisted the move fulfilled his 2018 election promise to cut the excise tax on gas by 5.7 cents a litre. But he had never suggested on the campaign trail that the cut would be temporary – or that it would not take effect until after his first term.
Mr. Ford had, in fact, promised to cut gas taxes by a total of 10 cents. The Progressive Conservative government said the first 4.3 cents came from its elimination of the tax built into the previous Liberals’ cap-and-trade emissions reduction system.
But that move triggered the federal government’s imposition of its carbon-pricing mechanism on Ontario, effectively putting this 4.3 cents back. (Unlike the gas tax, Ottawa says its carbon-pricing system returns 90 per cent of the money collected to taxpayers through rebates.)
As of April 1, the federal carbon price – which Ontario, Alberta and Saskatchewan all challenged unsuccessfully before the Supreme Court of Canada – rose 2.2 cents to 11.05 cents a litre of gas.
Just last month, Mr. Ford had suggested that no further provincial gas-tax cut was coming, despite his campaign promise. He instead urged Prime Minister Justin Trudeau to cut his carbon price first – a plea his government repeated on Monday. Now, with a month to go before the election campaign starts officially, he has changed his mind.
“Now, we’re fulfilling our promise at 10 cents a litre,” Mr. Ford told reporters, saying Ontarians could spend the money better than government can. “You know, the people of Ontario and across the country have just been getting gouged day in and day out.”
Asked about the delay in his move to cut the gas tax until after the election, he said bureaucrats told him it wasn’t possible to do it sooner because it was “very complicated.” In its press release, the government said the delay would give industry “time to adjust their systems and business processes.”
Alberta Premier Jason Kenney announced last month that he was temporarily suspending his province’s entire 13-cents-a-litre tax on gas and diesel as of April 1, with a plan that would restore the tax when oil prices subside.
The recent spike in gas prices has subsided by much more than Ontario’s delayed tax cut. According to figures from Kalibrate Technologies, which tracks fuel prices, the daily average price for regular unleaded peaked in Ontario at $1.903 a litre, including taxes, on March 10. It has since fallen back to $1.739 as of last Thursday.
Opposition NDP deputy leader Sara Singh said the temporary relief at the pumps isn’t enough and called on the government to pass her party’s bill that would regulate prices and aim to stop oil companies from jacking them on weekends. She said the government had four years to cut gas taxes but instead was making the move on the “eve of the election, at the 11th hour.”
Two cents a litre of the gas tax goes to municipalities to support public-transit initiatives. The province said that funding won’t be affected by the proposed cut.
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