Ontario to introduce legislation to temporarily cut gas, fuel taxes

The provincial government will introduce legislation to temporarily cut gas and fuel taxes beginning July 1.

A senior government source initially confirmed the move Sunday evening, which was followed by a provincial news release Monday morning.

The legislation would result in the gas tax being cut by 5.7 cents per litre and the fuel tax by 5.3 cents per litre for six months. The source said the legislation would be introduced Monday.

It would mark the first time in more than 30 years that there has been a direct cut to the province’s gas and fuel taxes, the source added.

In the news release, the government said vehicle owners would see “significant direct savings” from the gas tax cut and the recently announced elimination of licence plate sticker renewal fee, resulting in households having an average combined savings of around $465 this year.

The gas tax would drop to 9 cents per litre from 14.7 cents per litre, while the fuel tax — which includes diesel — would drop to 9 cents per litre from 14.3 cents per litre.

The government said it “will ensure” that funding for municipal transit systems from the gas tax “would not be impacted” by the proposed cut. Two cents per litre of the gas tax is provided to municipalities to improve and expand transit.

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“The Ontario government is also continuing to call on the federal government to help families and businesses in the face of rising costs by cutting the carbon tax, which increased to 11.05 cents per litre on gasoline and 13.41 cents per litre on diesel on April 1, 2022,” the release said.

2:05 Gas prices drop as Alberta stops collecting gas tax

In the 2018 provincial election, one of Doug Ford’s key promises was to lower gas prices by 10 cents per litre including the gas tax cut and eliminating the cap-and-trade system, a move that was meant to lower prices by 4.3 cents.

The province eliminated the cap-and-trade system, but that triggered the federal carbon tax, negating the 4.3 cent cut.

The government said the move to cut the gas tax will result in an overall reduction of 10 cents per litre of provincial taxes and charges on gas.

— With files from The Canadian Press