Ontario to extend gas tax cut to end of year as part of Tuesday’s budget

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Ontario is extending a temporary gas tax cut until the end of the year, as Premier Doug Ford issued a last-ditch plea to the federal government to abandon next week’s planned carbon price hike.

Mr. Ford, whose government will release its budget on Tuesday, said the province is keeping its 5.7-cent-a-litre cut to the provincial gas tax until Dec. 31, 2024. The government is also extending the 5.3-cent-per-litre cut to its fuel tax on diesel.

The extensions are among the affordability measures contained in Tuesday’s budget, the Premier said.

The gas tax cut, first announced in July, 2022, and extended several times, was set to expire again in June. The cuts will ensure rates remain at 9 cents a litre for the rest of this year, Mr. Ford said. The reductions, the government says, will end up saving Ontario households $320 each on average since they were introduced two and a half years ago, for a total of $2.1-billion.

“As people struggle with the Bank of Canada’s interest rate hikes and the rising cost of the federal carbon tax, we’re on a relentless mission to save people money,” Mr. Ford said during the announcement on Monday.

“Our government will always, always look for ways to put money back into your pockets.”

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Mr. Ford also reissued his call for a halt to the federal government’s planned increase to its “carbon tax,” which is set to go up by $15 on April 1, to $80 from $65 a tonne.

“It’s going to increase the cost of everything. It’s going to hurt every single person in Ontario,” he said.

The carbon pricing system was imposed on Ontario after Mr. Ford cancelled the province’s cap-and-trade system aimed at limiting greenhouse gas emissions.

A spokeswoman for federal Environment Minister Steven Guilbeault defended the carbon-pricing system and said most Canadians receive more back from the government’s rebates than they pay out. Kaitlin Power also criticized Mr. Ford and federal Conservative Leader Pierre Poilievre for opposing the plan.

“Conservative leaders like Poilievre and Ford should be honest to Canadians and come clean about their plans to help their rich friends pollute for free. Instead of presenting Ontarians with real solutions that both support people’s cost of living and fight climate change, Poilievre and Ford want to pass the bill along to future generations,” she said in an e-mail.

Ontario Finance Minister Peter Bethlenfalvy hinted that changes to the province’s auto-insurance regime could also be included in Tuesday’s budget, as first reported by CBC. “We’re always working on making things more convenient and providing more choice for drivers,” he said on Monday.

Tuesday’s budget is expected to present a path to balance but not eliminate deficit spending in the coming fiscal year, as the province faces growing economic uncertainty.

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In its 2023 budget, Ontario predicted it would balance its books in the coming fiscal year, 2024-25. But the province pushed that back to 2025-26 in its economic statement last fall, projecting a $5.3-billion deficit next year instead of a modest surplus. For the 2023-24 fiscal year, which ends March 31, the government said in February it expected a $4.5-billion deficit, up from its projection a year ago of $1.3-billion.

Mr. Bethlenfalvy and Mr. Ford already announced a major plank of their new spending plan last week: an additional $1.8-billion for infrastructure, including $1-billion for a new municipal program to facilitate housing construction and $625-million more for a water systems fund.

Meanwhile on Monday, all of the country’s premiers released a joint letter to Prime Minister Justin Trudeau asking for a meeting about long-term infrastructure funding.

At Queen’s Park, opposition leaders said they hoped the Ontario government would put more cash into health care, education and affordable housing.

“We’re going to be looking for a budget that actually meets the moment that the people of this province are in and that puts people first,” Opposition NDP Leader Marit Stiles told reporters on Monday.

In addition to demands for spending in the coming budget, Mr. Ford has faced criticism in recent days for ruling out requiring municipalities to allow fourplexes, or buildings with four housing units – a measure his government’s own housing task force had recommended. Ontario Liberal MPP John Fraser told reporters that Mr. Ford is “overreacting” to the idea because Liberal Leader Bonnie Crombie recently called for it.

“What’s evident to me is the Premier is renting out some space in his head, rent-free actually, for Bonnie Crombie,” Mr. Fraser said. “She’s there all the time.”