Ontario to introduce legislation to cut gas and fuel taxes for six months starting July 1

The Ontario government says it will introduce legislation to cut gas and fuel taxes for six months in an effort to provide relief for businesses and families in the province.

The province announced the change in a news release on Monday morning, saying the planned legislation would cut the gas tax in Ontario by 5.7 cents per litre and the fuel tax by 5.3 cents per litre for six months starting July 1.

The gas tax rate would be cut from 14.7 cents per litre to nine cents per litre and the fuel tax rate, which includes diesel, would be reduced from 14.3 cents per litre to nine cents per litre.

“Ongoing supply chain challenges and geopolitical conflicts are pushing up the cost of living from gas to groceries,” Minister of Finance Peter Bethlenfalvy said in the news release on Monday.

“With these added pressures, families and businesses need extra help to keep costs low. That is why our government is bringing forward legislation to provide tax relief at the pumps.”

In 2018, Premier Doug Ford promised to lower gas prices by 10 cents per litre through a tax cut and eliminating the cap-and-trade system. After being elected, Ford scrapped the cap-and-trade, which his government claims reduced the gas tax prices by 4.3 cents per litre.

However, the move prompted the federal government to impose a carbon tax on the province and wiped those savings.

Soaring gas prices in the province have prompted some to call on Ford to fulfill his election promise to further cut the gas tax and provide some relief to motorists.

The average cost of gas in Ontario has risen in the wake of the Russian invasion of Ukraine, almost reaching $2 per litre in March. Motorists are expected to see another gas price hike due to an increase in the federal carbon tax that came into effect on April 1.

Last year, Ford said he would honour his pledge to slash the gas tax by 5.7 cents per litre before the next budget, which at the time was set to be unveiled on March 31, 2022. The government later moved the budget date to April 30, days before the start of the election campaign.

However, in February, the premier suggested that he won’t follow through with his campaign promise unless the federal government made the same commitment and cut the price of gas as well.

The Ontario government stated in the news release on Monday that its “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.” 

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