Government to introduce legislation to cut gas tax by 5.7 cents per litre and fuel tax by 5.3 cents per litre
As part of its plan to keep costs down for Ontario families and businesses, the Ontario government is introducing legislation that would, if passed, cut the gas tax by 5.7 cents per litre and the fuel tax by 5.3 cents per litre for six months beginning July 1, 2022.
Vehicle owners in Ontario would see significant direct savings from this proposed gas tax cut and the recently announced elimination of licence plate renewal fees, with households benefitting from an average combined savings of about $465 in 2022.
“Ongoing supply chain challenges and geopolitical conflicts are pushing up the cost of living from gas to groceries,” said Peter Bethlenfalvy, Minister of Finance. “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 and put money back into people’s pockets.”
Effective July 1 until December 31, 2022, the gas tax rate would be cut from 14.7 cents per litre to 9 cents per litre, representing a cut of 5.7 cents per litre. The fuel tax rate, which includes diesel, would be reduced from 14.3 cents per litre to 9 cents per litre, representing a cut of 5.3 cents per litre.
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.
“Ontario is getting stronger, and with this proposed legislation, our government is doing its part to support workers and families,” said Minister Bethlenfalvy. “Now is the time for the federal government to join us in providing relief for hard-working Canadians by cutting the carbon tax.”
Ontario’s plan to cut gas and fuel taxes is part of a broader package that will provide immediate cost-of-living relief, including:
- Cutting costs for millions of Ontario vehicle owners by refunding licence plate sticker renewal fees paid since March 2020, and eliminating licence plate renewal fees and plate stickers on a go-forward basis, saving vehicle owners $120 a year in southern Ontario and $60 a year in Northern Ontario for passenger and light commercial vehicles.
- Permanently removing tolls on Highways 412 and 418, effective April 5.
- Providing tax relief for workers, families and seniors through the Low-Income Workers Tax Credit, the Seniors’ Home Safety Tax Credit, the Ontario Jobs Training Tax Credit and the Ontario Child Care Tax Credit.
- Reaching an agreement with the federal government for $13.2 billion of funding for a Canada-wide Early Learning and Child Care System, providing Ontario families with children five years old and younger in participating licensed child care centres with up to 25 per cent in savings, to a minimum of $12 per day, retroactive to April 1, 2022. This agreement will deliver an average of $10-a-day child care for eligible children by September 2025.