CALGARY — The Liberal government will temporarily suspend the federal fuel excise tax on gasoline and diesel beginning next week.Prime Minister Mark Carney announced the measure on Tuesday in Ottawa, the morning after his government secured a majority after winning three by-elections.The tax holiday is set to take effect April 20 and run through September 7, as global oil markets remain volatile amid the Iran conflict, with the disruption of shipments through the Strait of Hormuz pushing gas prices in parts of Canada up by more than 40 cents per litre.Ottawa says suspending the tax will lower prices by roughly 10 cents per litre for regular gasoline and four cents per litre for diesel.Last week, Carney signalled the move, saying the government was looking at ways to provide relief as fuel costs continue to climb and pressure was mounting to act.Conservative Leader Pierre Poilievre has called for broader tax relief, including eliminating the federal excise tax, GST on fuel and the clean fuel charge through the end of the year.Poilievre argues those measures could cut fuel prices by as much as 25 cents per litre and save a typical family about $1,200 over the remainder of the year.The federal excise tax on gasoline has remained at 10 cents per litre since 1995, while diesel has been taxed at four cents per litre since 1987..The Canadian Taxpayers Federation has been pushing for gas tax relief for a long time and said the government’s decision to cut taxes at the pumps will help a lot of people, said the group's federal director Franco Terrazzano."Cutting taxes is the fastest, simplest and easiest way for the government to make life more affordable and ease the pain of high gas prices," he said."Now the government needs to cut wasteful spending so it can cut taxes permanently." "That means the government can’t spend half-a-million dollars on airplane food in one year, $90 billion on high-speed rail or billions on corporate welfare.".The Montreal Economic Institute said the government should make this measure permanent, argues the MEI.“Taxpayers had not yet recovered from the inflation of the past few years, when the rapid increase in the price of gas came along and shrank their purchasing power even more,” says Gabriel Giguère, senior policy analyst at the MEI. “A temporary tax holiday only helps temporarily. If it were to make this reduction permanent, the government would be returning hundreds of dollars a year into families’ pocketbooks.”
