Ontario is planning to cut gas tax & here’s what you need to know

If you drive, you’ve probably complained about gas prices recently. And on Monday, the Ontario government said that it is introducing legislation that would cut gas tax by 5.7 cents per litre and the fuel tax by 5.3 cents per litre for 6 months starting July 1.

According to the province, with the recently announced elimination of licence plate renewal fees, and this proposed gas tax cut, households benefitting from an average combined savings of about $465 in 2022.

“Ongoing supply chain challenges and geopolitical conflicts are pushing up the cost of living from gas to groceries,” said Peter Bethlenfalvy, Minister of Finance in a release.

“With these added pressures, families and businesses need extra help to keep costs low. That is why our government is bringing forward legislation to provide tax relief at the pumps and put money back into people’s pockets.”

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So how will it work?

The province said that as of July 1, and until December 31, 2022, the gas tax rate would be cut from 14.7 cents per litre to 9 cents per litre, which is the 5.7% cut. Meanwhile the fuel tax rate, which includes diesel, would be reduced from 14.3 cents per litre to 9 cents per litre, the 5.3 cents per litre.

The government also said it is continuing to call on the feds to cut the carbon tax, which increased to 11.05 cents per litre on gasoline and 13.41 cents per litre on diesel on April 1.