OTTAWA — Finance Minister François-Philippe Champagne says global conflict, oil prices and the state of federal finances will determine whether Ottawa extends its fuel-tax relief beyond March 31, but he offered no specific price threshold or formula for making that decision.Responding to a question from the Western Standard on Tuesday, Champagne said the government hopes energy markets will stabilize before the temporary relief expires next spring..“No one has a crystal ball to see what the world is going to look like in January 2027,” Champagne said.“With the passage of time, one would hope that there would be more stability, certainly that the conflict and the Strait of Hormuz would have been resolved by then.”Champagne introduced Bill C-38, the Canadian Fuel Affordability Act, on Monday. The legislation would extend the full suspension of the federal fuel excise tax until Jan. 31, 2027.The regular tax rates would then return at 50% between Feb. 1 and March 31 before the full tax is scheduled to return April 1..The suspension applies to gasoline, diesel, aviation gasoline and aviation fuel.Champagne said Ottawa hopes geopolitical tensions will ease and oil prices will stabilize before the relief ends.“We hope by then things will have been settled, that the price of oil will stabilize,” he said. “This is the kind of measure we needed right now.”Asked what factors Ottawa would examine before potentially extending the measure again, Champagne emphasized the need to balance affordability relief with the government’s finances.“We need to be fiscally responsible,” he said. “Canadians expect us to be there for them now, when they need it, and that’s what we’re doing on housing, grocery and gas.”“At the same time, people watching at home expect me, as finance minister, to be serious, to be rigorous and to be targeted in measures.”Champagne said the government determined that the period ending March 31 was the “appropriate” timeframe, but did not rule out another extension if high fuel prices and international instability persist..Canadian Taxpayers Federation federal director Franco Terrazzano welcomed the immediate relief but said Ottawa should reduce spending and make the tax cut permanent.“The Canadian Taxpayers Federation pushed for gas-tax relief for a long time because cutting taxes is the simplest, fastest and easiest way for politicians to make life more affordable,” Terrazzano told the Western Standard in response to Champagne’s remarks.“The government’s decision to cut taxes at the fuel pumps will help a lot of people this fall.”Terrazzano said permanent relief should be offset through spending reductions rather than additional borrowing.“Now Ottawa needs to cut wasteful spending to make this relief permanent without ballooning the debt,” he said.“That means the government can’t spend six figures on airplane food, tens of billions on high-speed rail and needs to put the bloated bureaucracy on a diet.”Terrazzano also warned the government could face resistance when the tax begins returning in February.“The government plans to start cranking up the gas tax shortly after Christmas, but Canadians won’t tolerate that,” he said..The Department of Finance estimates the extension will provide another $2.9 billion in tax relief, bringing the total projected cost of the measure to $5.3 billion during the 2026-27 fiscal year.Ottawa says the full suspension saves drivers more than $5 on a typical 50-litre gasoline fill-up. Savings would be cut roughly in half during February and March under the phased return.The government says the measure will also reduce costs for truckers and businesses in the agriculture, food, construction, housing, delivery and aviation sectors.Conservative Leader Pierre Poilievre had pressed the government to prevent the fuel tax from returning and called for all federal taxes on gasoline to be removed until at least Canada Day 2027.The Conservative proposal went further than Bill C-38, calling for the removal of the GST from gasoline and diesel and the elimination of the Clean Fuel Regulations and industrial carbon tax.Bill C-38 must receive parliamentary approval before the extension takes effect.
