‘Every dollar counts’: Ontario’s gas tax cut brings some relief amid record prices

TORONTO — Ontario drivers saw some relief from record pump prices on Friday as the province’s gas tax cut took effect.

The Ontario government has reduced the gas tax by 5.7 cents per liter through the end of the year, although Premier Doug Ford has said he will consider an extension if inflation remained high.

Drivers noticed the impact Friday at Toronto-area gas stations, where prices fell about 11 cents overnight to $1.93 — only in part due to the tax cut.

“Every dollar counts,” said Matthew Johnston as he fueled a van at a gas station in downtown Toronto. “That’s actually going to help a bit.”

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Gasoline prices in Toronto have risen nearly 40% since the start of the year, hitting a record high of $2.15 per liter in early June before ending the month around $2.00 per liter. liter.

Johnston, who runs an upstart restaurant business and works at a winery, says soaring gas prices coupled with inflation have forced him to cut spending.

“I couldn’t go out or do anything anymore…Honestly, it was all about gas, rent – you know, just the cost of living,” he said.

He usually puts $60 in the tank to make his almost daily commute to the Niagara region. On Friday, he opted to try a $40 fill.

The tax cut is expected to cost the province $645 million while in effect. Analysts note that Ford could face a tough decision in December when the measure expires and prices are likely to rise again before Christmas.

Legislation passed this spring will also reduce the fuel tax, which covers diesel, by 5.3 cents per liter until December 31.

Hermain Kazmi called the tax cut a move in the right direction as he pumped gas into his car. He said high gas prices have recently pushed him to use public transport more, but he expects to return to his previous driving habits if prices drop.

Kazmi was “100%” in favor of the government extending the tax cut until 2023, even expressing hope that it could lead to more financial relief.

“I don’t think a 10 cent drop would have a huge impact. It’s a good change, but I think it has to come down depending on the level of inflation and how wages haven’t matched the rise in inflation,” he said.

Soaring gas prices, a key driver of inflation, are linked to increased demand for oil as the economy reopens from the COVID-19 pandemic. The situation has also been exacerbated by a global supply shortage caused in part by Russia’s invasion of Ukraine.

Ali Avali stopped to refuel his SUV on his way to a park outside Toronto, with his dog, an Alaskan Malamute, perched in the backseat.

“The only reason I drive is because of this guy. I take him for a bit of a run in the countryside,” he said.

Once the loan is paid off on the SUV, Alavi said he plans to switch to an electric vehicle. He said he opposes a gas tax cut, suggesting that if prices continue to rise, more people may also be inclined to make the switch.

When I see gas prices going up, it doesn’t really piss me off,” he said.

This report from The Canadian Press was first published on July 1, 2022.