Drivers in Ontario got some relief from record gas station prices on Friday after the province’s gas tax cut took effect.
The Ontario government cut the gas tax by 5.7 cents a liter until the end of the year, although Premier Doug Ford said he would consider an extension if inflation remained high.
Drivers noticed the impact Friday at gas stations in the Toronto area, where prices fell about 11 cents overnight to $1.93 — only in part because of the tax cut.
“Every dollar counts,” said Matthew Johnston as he filled up a cargo van at a gas station in downtown Toronto. “That will actually help a bit.”
Gasoline prices in Toronto have risen nearly 40 per cent since the start of the year, hitting a record high of $2.15 a liter in early June before ending the month around $2.00 a litre.
Johnston, who runs a fledgling catering business and works at a winery, says the rising cost of gas combined with inflation has forced him to cut costs.
“I couldn’t go out or do anything anymore. Honestly, it all went to just gas, rent — you know, just living expenses,” he said.
He usually puts $60 in the tank to make his almost daily trip to the Niagara region. On Friday, he chose to try a $40 top-up.
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 would also cut the fuel tax that covers diesel by 5.3 cents per liter until December 31.
Hermaine Kazmi called the tax cuts a move in the right direction as she pumped gas into her car. He said high gas prices recently have forced him to use public transportation more, but he expects to return to his old driving habits if prices drop.
Kazmi was “100 percent” in favor of the government extending the tax cuts until 2023, even expressing hope that this 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 should go lower depending on how much inflation is and how wages are not keeping up with how inflation has gone up,” he said.
The rising price of gas, a key driver of inflation, is linked to increased demand for oil as the economy reopens after the COVID-19 pandemic. The situation has also been exacerbated by a global supply crisis caused in part by Russia’s invasion of Ukraine.
Ali Avali stopped to load his SUV on the way to a park outside Toronto, his dog, an Alaskan malamute, perched in the back seat.
“The only reason I drive is because of this guy. I take him for a little jog in the countryside,” he said.
Once the SUV loan is paid off, Alavi said he plans to upgrade to an electric vehicle. He said he opposes cutting the gas tax, suggesting that if prices continue to rise, more people might be inclined to switch, too.
When I see gas prices going up, it doesn’t really make me angry,” he said.
This report by The Canadian Press was first published on July 1, 2022.
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