Canada’s Conservatives are calling on the federal government to ease the burden of rising fuel costs by suspending key taxes on gasoline and diesel for the remainder of the year, arguing that Canadians are facing mounting financial pressure at the pumps.
Pierre Poilievre, leader of the Conservative Party, said the proposed move would eliminate the federal fuel excise tax, the clean fuel standard charges, and GST-related costs applied to fuel. According to him, this could lower prices by roughly 25 cents per litre translating to about $20 in savings per fill-up and up to $1,200 for a typical family of four by year-end.
Poilievre attributed the recent spike in fuel prices partly to escalating geopolitical tensions, particularly the conflict involving Iran, which has disrupted global oil supply chains. However, he argued that long-standing high fuel costs in Canada are largely driven by federal taxation policies.
Global oil markets have been volatile following military actions in the Middle East that have affected crude flows through the strategically vital Strait of Hormuz. The situation intensified after Donald Trump indicated that U.S. military operations against Iran could continue for several weeks, pushing crude prices above US$110 per barrel.
Poilievre also pointed out that Canadians are paying significantly more for gasoline than Americans a gap he attributes to higher taxes and a weaker Canadian dollar. He stressed that reducing fuel costs is essential for economic stability, noting that several countries, including Australia, Spain, and Ireland, have already introduced measures to lower fuel taxes.
Meanwhile, Prime Minister Mark Carney signaled a more cautious approach. Speaking earlier in the week, he said the government is closely monitoring oil price trends and their impact on affordability. Carney added that any decision regarding fuel tax adjustments would likely be addressed in the upcoming spring fiscal update, though no timeline has been confirmed.
A spokesperson for the Finance Ministry reiterated that the government is assessing options to help Canadians cope with rising costs, particularly in light of ongoing global uncertainty.
The New Democratic Party has also weighed in on the issue. Gord Johns said feedback from constituents suggests strong support for relief measures but emphasized that many Canadians believe large oil and gas companies which have posted substantial profits should bear some of the cost.
Poilievre estimated that his proposed tax suspension would reduce federal revenue by approximately $5.25 billion. To offset the shortfall, he suggested cutting spending in several areas, including federal programs, consulting costs, foreign aid, and scrapping major infrastructure initiatives such as the planned high-speed rail project between Toronto and Quebec City.
The rail project, overseen by the Crown corporation Alto, is projected to cost between $60 billion and $90 billion and is expected to be completed by 2037, with initial construction phases scheduled to begin later this decade.
As fuel prices remain unpredictable, the debate over how best to provide relief to Canadians is likely to intensify in the coming months.
