“Canadians are feeling the pressures of everyday expenses right now,” said Prime Minister Mark Carney.
The federal government’s pause of excise taxes on gasoline and diesel went into effect on Monday. This tax holiday will remove up to $0.10 per litre on gasoline and $0.04 per litre on diesel fuel.
The suspension is largely due to the ongoing U.S.-Iran war, which has impacted global oil prices. The Strait of Hormuz accounts for nearly 20 percent of all oil trade on the planet, creating significant market fluctuations.
Average gas prices across Canada were $1.69 a litre on Monday, down from $1.74 per litre last week. This is a stark increase from $1.31 per litre at the same time last year.
In Newfoundland and Labrador, gasoline prices decreased by 11.5 cents per litre, while diesel prices fell by 4.6 cents per litre. The excise tax on auto and aviation fuels will be suspended until September 7.
Carney emphasized that the tax holiday will mean reduced fuel prices on gas by up to $0.28 per litre when considering additional factors. This measure will cost the government about $2.4 billion.
Propane and furnace oil remain exempt from the federal excise tax, raising questions about equity in fuel pricing.
Conservative Leader Pierre Poilievre had urged the government to lift the fuel excise tax, arguing it would provide immediate relief to consumers.
Details remain unconfirmed regarding how long these price reductions will last or if further measures are planned.
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