Ontario will maintain its cut to the gas tax for another a year, the province says.
At an announcement in Etobicoke on Sunday morning, Ontario premier Doug Ford said the cut — introduced to combat sky-high gas prices in the summer — will continue for a year.
In July, Ontario announced it would cut the gas tax by 5.7 cents per litre until the end of the year. At the time, Ford indicated he would consider an extension if inflation remained high.
High gas prices are a key inflation driver with the price of fuel impacting many consumer products through factors such as increased delivery costs.
“Extending the tax cut for an additional year will mean the average Ontario household will save $195,” Ford said. “We know that every dollar helps.”
The year-long extension will be part of minister of finance Peter Bethlenfalvy’s fall economic statement. The minister of finance is set to table the financial updates in Ontario’s legislature at around 1 p.m. on Monday.
The cut from July until the end of 2022 was estimated to cost Ontario $645 million while it’s in effect.
Interim Ontario NDP Leader Peter Tabuns said the announcement would not help families.
“Instead of helping folks afford basics like food and heating, Doug Ford is doubling down on a gas tax scheme that doesn’t even guarantee drivers will see so much as a penny in savings,” he said in a statement that listed several policy priorities including rent control and social assistant rates.
Ontario’s latest economic plans come in the context of a delicate economic picture for the province as a whole and better-than-expected financial performance for the government’s coffers.
At the end of October, Ontario’s financial watchdog said Ontario’s economy was on a “knife’s edge.”
Financial Accountability Officer (FAO) Peter Weltman said after a record-breaking year, the province’s economy was projected to slow down amid rising interest rates and cautious consumer spending — leading to a projected growth of 0.7 per cent, down from the government’s projection of 3.1 per cent.
“We’re on a knife’s edge right now,” Weltman told reporters at Queen’s Park. “We don’t think there will be (a recession) but we think we’re close.”
Bethlenfalvy announced in September that Ontario ended the last fiscal year with a surprise surplus of $2.1 billion.