Ontario drivers took some relief from record prices at gas stations on Friday as the province’s gas tax cut took effect.
The Ontario government cut the gas tax by 5.7 cents a liter through the end of the year, although Premier Doug Ford said he would consider an extension if inflation remains high.
Drivers took the hit Friday at gas stations in the Toronto area, where prices fell about 11 cents overnight to $1.93, only partly attributable to lower taxes.
“Every dollar counts,” Matthew Johnston said as he filled a cargo van at a downtown Toronto gas station. “This will really help a bit.”
Gasoline prices in Toronto have risen nearly 40 percent 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 liter.
Johnston, who runs a new catering business and works in a warehouse, says high gas prices coupled with inflation have forced him to cut back on spending.
“I haven’t been able to go out or do anything anymore. Honestly, it’s all gone to gas, rent, you know, just cost of living,” she said.
He usually puts $60 in the tank to make his almost daily trip to the Niagara area. On Friday, he opted to try a $40 top-up.
The tax cut is expected to cost the province $645 million while it is in place. Analysts say Ford may 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 through December 31.
Hermain Kazmi said the tax cut was a move in the right direction as he pumped gas into his car. He said high gas prices recently pushed him to use public transportation more, but he hoped to return to his previous driving habits if prices fell.
Kazmi was “100 percent” in favor of the government extending the tax cut until 2023, even expressing hope that it could lead to further financial relief.
“I don’t think a 10-cent drop would have much of an impact. It’s a good change, but I think it needs to drop more depending on inflation and how wages haven’t matched the rise in inflation,” he said. .
The rising price of gasoline, a key driver of inflation, is linked to higher demand for oil as the economy reopens after 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 fill up her SUV on the way to a park outside Toronto, her dog, an Alaskan malamute, sitting in the backseat.
“The only reason I’m driving is for this guy. I’m taking him for a little run around the field,” he said.
Once the loan on the SUV is paid off, Alavi said he plans to switch to an electric vehicle. He said he was opposed to a gas tax cut, suggesting that if prices continued to rise, more people might be inclined to make the switch, too.
When I see gas prices go up, it doesn’t really bother me,” he said.
This report from The Canadian Press was first published on July 1, 2022.