Conservative Party leader Pierre Poilievre has written to Prime Minister Mark Carney urging that the temporary suspension of the federal fuel excise tax be prolonged well beyond its scheduled reinstatement on Labour Day, 7 September. In his Sunday letter he asks that the pause remain until at least Canada Day 2027.
Background to the pause
The excise tax on gasoline and diesel was lifted in April as a short‑term measure to ease household budgets. The relief, which saves drivers roughly ten cents per litre of gasoline and four cents per litre of diesel, is set to expire on 7 September.
Poilievre argues that the relief is still needed. He notes that “A tax hike on fuel is a tax hike on everything,” and contends that extending the freeze would help curb the cost of groceries, building materials and other goods that rely on transport.
Economic pressures
Gasoline prices have begun to climb again. The Canadian Automobile Association reports a national average of CAD$1.67 per litre for regular‑grade gasoline, up from CAD$1.64 a week earlier and from CAD$1.33 at the same point last year.
Internationally, oil markets are volatile following the Iran‑U.S. conflict. The Strait of Hormuz, which normally handles about one‑fifth of global crude supplies, is largely closed to cargo traffic amid fears of attacks. Damage to regional oil, gas and maritime infrastructure adds further strain.
U.S. West Texas Intermediate crude was trading close to US$82 a barrel at the time of reporting, down from a recent high of about $83 on Wednesday but higher than $75 a week earlier.
Domestically, the Organisation for Economic Co‑operation and Development has highlighted that Canada recorded the steepest food‑price increases among G7 members, underscoring broader inflationary pressures.
Political calls for a longer freeze
Poilievre is not alone in pressing for an extended suspension. Ontario Premier Doug Ford earlier this month urged Carney to keep the tax off the books until at least 1 January, or to consider making the suspension permanent.
Poilievre also called for the removal of all federal taxes on gasoline and diesel, saying it would “lower the price at the pump and make groceries, home building materials and other products that are transported more affordable to Canadians.”
Government response
A spokesperson for Finance Minister Francois‑Philippe Champagne referred to the 2025 budget and the spring economic update as the government’s tools for tackling rising costs, but did not confirm whether a further pause is being considered.
The spokesperson added that the government will continue to work with provinces on measures that support growth, competitiveness and cost‑reduction in the current global economic climate.
Potential impact of reinstating the tax
The federal excise tax is separate from the Harmonised Sales Tax, which remains in force. Analysts estimate that restoring the tax could add roughly ten to eleven cents per litre to fuel prices, depending on the province.
Dan McTeague, president of Canadians for Affordable Energy, warned that the re‑imposition would directly affect consumers at the pump and indirectly raise the price of goods that rely on road transport.