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Ontario plans to cut the gas tax by 5.7 cents per litre and the fuel tax by 5.3 cents

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
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The Ontario government is introducing legislation to 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.

Along with the elimination of licence plate renewal fees, the government expects average combined savings per hpusehold of about $465 this year.

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

Effective July 1 until December 31 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 cut the carbon tax, which increased to 11.05 cents per litre on gasoline and 13.41 cents per litre on diesel on April 1.

“Now is the time for the federal government to join us in providing relief for hard-working Canadians by cutting the carbon tax,” said Bethlenfalvy.

Ontario says its plan to cut gas and fuel taxes is part of a broader package 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 $60 a year in northern Ontario for passenger and light commercial vehicles.
  • Permanently removing tolls on Highways 412 and 418, effective April 5.

"Vehicle owners in Ontario would see a significant direct savings from this proposed gas tax cut and the recently announced elimination of licence plate renewal fees. For example, a family in Southern Ontario who owns two cars and drives regularly would save about $815 in 2022. Households that do not own vehicles are expected to benefit from the impact of the proposed gas tax cut in the prices paid for taxis, food delivery and consumer products," says a government news release.

The price paid at the pump is made up of the cost of crude oil, wholesale margins, retail margins, federal excise tax, the federal carbon tax, Ontario gasoline/fuel tax and HST.

This proposed tax cut would be effective July 1, to provide the industry — including manufacturers, wholesalers and retailers — the required time to adjust their systems and business processes.

The Canadian Taxpayers Association applauded the announcement to lower gas taxes by 5.7 cents per litre.

“This is a great day for Ontario taxpayers and it will save taxpayers a lot of money at the gas pump,” said CTF Ontario Director Jay Goldberg. “After four years of waiting, Premier Doug Ford is finally delivering on his promise to cut taxes for hardworking Ontarians.” 



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