Trudeau needs to follow Biden’s lead and provide gas tax relief

Author: Franco Terrazzano 2022/06/22

OTTAWA, ON: The Canadian Taxpayers Federation is calling on Prime Minister Justin Trudeau to cut gas taxes following President Joe Biden’s push to lower gas taxes in the United States. 

“Trudeau needs to follow Biden’s lead and provide gas tax relief immediately,” said Franco Terrazzano, Federal Director of the CTF. “Today, Trudeau could save an average Canadian family about $20 every single time they fuel up their minivan by cutting federal fuel taxes.”

Biden is calling on Congress to suspend federal gas and diesel taxes for three months.

In Canada, the federal government charges a fuel excise tax, sales tax and carbon tax at the pumps. Removing those taxes on gasoline would lower the pump price between 18 and 30 cents per litre, depending on the province.  

The federal government charges its sales tax on top of other taxes. That means Ottawa charges the GST or HST on the fuel Canadians buy as well as the other federal and provincial taxes on fuel. As taxes and the price of gas rise, this tax-on-tax increases the cost to drivers.

The United Kingdom has also announced $8 billion of fuel tax relief. South Korea cut its gas tax by 30 per cent. Germany is cutting taxes on motor fuels. The Netherlands cut its gas tax by 21 per centItalyIrelandIsraelIndiaPeruPoland25 Indian states and union territoriesAlbertaNewfoundland and LabradorNew Jersey and Florida are also cutting gas taxes.

Consumer prices increased by 7.7 per cent year-over-year, which was the largest yearly increase since January 1983. 

“The acceleration in May was largely due to higher prices for gasoline,” according to Statistics Canada. 

“Canadians can barely afford to fuel up on the way to work and it’s the high taxes that make these high gas prices more painful,” said Terrazzano. “While Ottawa sticks Canadians with higher bills, other countries are proving it’s possible to provide immediate relief by lowering fuel taxes.”