How much could you save on gas if Ontario suspends its fuel tax?
Gas prices in Ottawa have reached another all-time high, with the average above $1.84 per litre on Tuesday.
The continuing sticker shock at the pumps has some experts calling for provinces, including Ontario, to cut fuel taxes.
Alberta announced Monday it would temporarily suspend its provincial gasoline tax starting April 1. The tax, which adds 13 cents per litre to the cost of gasoline, will be completely removed if oil prices surpass $90 U.S., and partially so if they are between $80 and $90, Premier Jason Kenney announced.
Ontario’s fuel tax adds 14.7 cent per litre to the price of gas.
Premier Doug Ford campaigned in 2018 to reduce the price of gas by an average of 10 cents a litre. But he appeared to back away from that promise recently, saying he would instead match any deduction the federal government makes.
A spokesman for Energy Minister Todd Smith reiterated that stance on Tuesday.
"The Premier and Minister Smith have been clear that the federal government must delay their planned carbon tax increase on April 1, 2022 to 11 cents a litre," Palmer Lockridge said in a statement. "Premier Ford has already cut gas prices by 4.3 cents and will lower it even further if the federal government cuts taxes, ensuring savings will not be wiped out by federal tax increases."
Ford also pledged as recently as November to lower gas taxes by 5.7 cents by cutting the province’s excise tax on fuel, but has not done so.
The Ford government scrapped Ontario’s cap-and-trade system when they came into office, but that prompted the federal government to impose a carbon tax on the province, wiping out those savings.
The federal carbon tax adds 8.8 cents a litre to the price of gas in Ontario, though taxpayers can apply to get a quarterly rebate.
How much would Ottawa drivers pay for gas today if some of these cuts were put in place? Here’s a breakdown:
Average price of gas in Ottawa: 184.2/L
If province suspends fuel tax: 169.5/L
If province cuts prices by 10 cents a litre: 174.2/L
If province cuts excise tax on fuel: 178.5/L
No federal carbon tax: 175.4/L
It’s important to note that governments are dependent on the revenue from fuel taxes. Cutting them would have an impact, especially in a volatile global market caused by Russia’s invasion of Ukraine and other factors.
The U.S. announced Tuesday they will ban Russian oil imports, a move likely to push energy prices even higher.
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