Ontario: 6-month reduction in fuel taxes starting this Friday

TORONTO — Ontario drivers got some relief from exuberant prices at the pumps Friday when the province’s gas tax cut took effect. Ontario’s gas tax is reduced by 5.7 cents per liter for six months starting this Friday.

Legislation passed last spring also provides for the tax on fuel, which includes diesel, to be reduced by 5.3 cents per liter over the same period.

The Progressive Conservative government of Ontario has estimated that when implemented, this tax reduction will cost $645 million.

Premier Doug Ford is reportedly considering extending the measure past December 31 if inflation is still high at that time.

The changes come as Ontarians face skyrocketing gas prices across the province. In Toronto, pump prices have risen nearly 40% since the start of the year, reaching a record high of $2.15 per liter in early June before ending the month around $2.00 per litre. liter.

Drivers noticed the impact of the tax cut on Friday at Toronto-area gas stations, where prices fell about 11 cents overnight to $1.93, which is attributable only in part to the action of the Ontario government.

“Every dollar counts. It’s going to help a little,” said Matthew Johnston as he filled up a van at a gas station in downtown Toronto.

Mr Johnston, who runs a start-up restaurant business and works at a winery, says soaring petrol prices combined with inflation have forced him to cut spending.

“I was no longer able to go out or do anything (…) honestly, it was all about gas, rent – ​​you know, just the cost of living,” he said. said.

He usually puts $60 in the tank to make his almost daily commute to the Niagara region. On Friday, he opted to go for a $40 fill.

Observers expect the tax cut to provide some relief to consumers, but the impact of the cut could fluctuate due to external factors.

Analysts note that Mr Ford could face a tough decision in December when the measure expires and prices are likely to rise again before Christmas.

A citizen who put gas in his car, Hermain Kazmi, called the tax cut a move in the right direction. He admitted that high petrol prices have recently pushed him to use public transport more, but that he expects to resume his previous driving habits if prices drop.

Mr Kazmi was “100%” in favor of the government extending the tax cut until 2023, even expressing hope that it could lead to more financial relief.

“I don’t think a 10 cent drop would have a huge impact. It’s a good change, but I think it has to come down based on inflation and the fact that wages haven’t kept up with rising inflation,” he said.

Soaring gas prices, a key driver of inflation, are linked to increased demand for oil as the economy reopens from the COVID-19 pandemic. The situation has also been exacerbated by a global supply shortage caused in part by Russia’s invasion of Ukraine.

Ali Avali stopped to refuel his sports utility vehicle (SUV) on his way to a park outside Toronto, with his dog, an Alaskan Malamute, sitting in the backseat.

“The only reason I drive is because of [mon chien]. I take him for a run in the countryside,” he explained.

Once the loan is paid off on his SUV, Alavi said he plans to switch to an electric vehicle. He opposes a gas tax cut. He believes that if prices continue to rise, more people may also be inclined to make the switch.