Canada Loses $2.4 Billion To Give Drivers 10 Cents Back On A 40-Cent Gas Spike

Canadians are finally getting a bit of breathing room at the pump. The Carney government has confirmed it will suspend the federal excise tax on gasoline, diesel, and airline fuel from April 20 through September 7, a temporary move aimed at easing the pressure.

With that tax stripped out, regular gas prices are expected to fall by around 10 cents per liter, while diesel should drop by about 4 cents. That relief comes after a sharp surge tied to the conflict in Iran, which has pushed global oil prices higher and sent Canadian pump prices up more than 40 cents per liter in recent weeks.

Read: As Gas Prices Soar, Here’s How To Cut Your Fuel Bill Now

Cutting the fuel excise will cost the government around $2.4 billion in lost revenue. Despite this, Prime Minister Mark Carney believes it’s an important way to reduce the burden on those struggling with increasing living costs.

“To be clear, today’s cut to the fuel excise tax is a responsible, temporary measure consistent with what it takes to build a stronger economy, a more affordable economy, combined with sound fiscal management,” Carney said. “When Canadians are facing financial pressures, they carefully manage their expenses, and they expect their government to do the same.”

The conservative opposition party supports eliminating the federal fuel excise, but also wanted the GST on fuel and the clean fuel charge to be dropped until the end of this year, suggesting these measures could cut costs by 25 cents a liter. However, that plan came with a much steeper price tag, estimated at around $5.25 billion, according to CTV News.

Canada isn’t the only country where the government has been forced to step in to control spiraling fuel costs. At the start of this month, Australia’s federal government halved its fuel excise from 52.6 cents per liter to 26.3 cents per liter, immediately prompting significant price cuts at pumps across the country.