Fuel Prices Set to Drop in Canada After Federal Tax Removal

Canadian Prime Minister Mark Carney has announced a significant economic relief measure by temporarily removing the federal excise tax on petrol, diesel, and aviation fuel. The decision comes a day after his party secured a major victory in three by-elections. According to the announcement, the tax exemption will take effect from Monday, April 20. The move is expected to reduce petrol prices by approximately 10 cents per litre and diesel prices by around 4 cents per litre. Additionally, the 4 cents per litre tax on aviation fuel will also be eliminated. The relief is set to remain in place until Labour Day. The government estimates that this measure will result in a financial burden of nearly $2.4 billion. However, officials believe the decision will provide much-needed support to businesses operating in sectors such as trucking, food supply, agriculture, housing, construction, and delivery services by lowering operational costs. At present, the average price of petrol in Canada exceeds 176 cents per litre. This marks a significant increase compared to earlier levels, which stood at approximately 126 cents per litre during the period following the US-Israel strikes on Iran. In his statement, Carney emphasized the importance of controlling inflation, increasing housing supply, and accelerating major development projects. He also highlighted the need to strengthen Canada’s economy and enhance its self-reliance. Citing a recent report by the International Monetary Fund, the Prime Minister noted that despite current economic challenges, Canada is expected to avoid a recession.