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Canadians need gas tax cuts as prices soar

Author: Franco Terrazzano 2026/03/20

Don’t let politicians convince you they can’t do anything about the rising gas prices.

Canadian politicians may not be able to stop a war that’s waging half-way around the world. But they can cut their fuel taxes, carbon taxes and sales taxes that make high gas prices more painful.

Politicians in federal, provincial and municipal governments are hitting Canadians every which way with punitive taxes. In some Canadian cities, all the different gas taxes add more than 60 cents per litre to the prices at the pump.

Here’s a breakdown of all the taxes that make fueling up in Canada more expensive:

The federal government charges a fuel tax that adds 10 cents per litre to the price of gas.

Provincial governments also charge fuel taxes, ranging from 7.5 cents per litre in Newfoundland and Labrador to 19.2 cents per litre in Quebec.

Cities like Montreal, Vancouver and Victoria also impose fuel taxes, ranging from three cents per litre in Montreal to 18.5 cents in Vancouver.

On top of these fuel taxes, the federal government still charges hidden carbon taxes.

Prime Minister Mark Carney cancelled the consumer carbon tax Canadians could visibly see. But he’s increasing two carbon taxes that are harder to detect but inflict similar costs.

The first is embedded in federal fuel regulations. This hidden carbon tax currently increases the price of gas by up to seven cents per litre, increasing to about 17 cents by 2030, according to the Parliamentary Budget Officer.

The second is the industrial carbon tax on Canadian oil and gas, steel and fertilizer companies, among others.

Carney told Canadians that by imposing an industrial carbon tax his government is “making the large companies pay for everybody.” But polling shows Canadians aren’t buying Ottawa’s latest carbon tax spin.

About 70 per cent of Canadians say businesses will pass on most or some of the cost of the industrial carbon tax to consumers through higher prices, according to Leger polling.

It turns out Canadians understand this simple reality: Carbon taxes on refineries make gas and diesel more expensive.

To add insult to injury, the feds, along with every province east of Manitoba, charge sales taxes on top of all the per-litre taxes. That means that as the price of gas and fuel taxes increase, this tax-on-tax costs Canadians more money.

At three cents per litre, this tax-on-tax may seem small. But the tax-on-tax alone will cost a family fueling up their minivan once per week about $120 per year.

All these taxes are driving up the cost of living.

In Toronto, where the provincial gas tax is relatively low, a family still pays almost $30 in taxes to the provincial and federal governments every time they fuel up their minivan.

In Vancouver, where gas taxes are sky high, a family pays nearly $50 in taxes every time they fuel up their minivan.

The good news for taxpayers is that every now and then politicians stumble into a good idea and provide gas tax relief.

Newfoundland and Labrador’s former Liberal premier Andrew Furey temporarily cut the province’s gas tax from 14.5 cents a litre to 7.5 cents a litre in 2022. Their new Progressive Conservative Premier Tony Wakeham is pledging to make that cut permanent. Ontario Premier Doug Ford also cut his province’s gas tax by 5.7 cents a litre.

Politicians have cut taxes to make life more affordable before and they should do it again today.

Canadian politicians didn’t start the war in the Middle East. But they have been making life more expensive with high gas taxes for years.

Politicians across Canada should immediately scrap all carbon taxes, cut gas taxes and eliminate their tax-on-tax to make life more affordable.

This column was originally published in the Toronto Sun on March 20, 2026.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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