Ford’s finance minister hints at extension of gas tax break
Province’s temporary cut of 5.7 cents per litre set to expire on June 30
Read his lips: no new taxes.
Finance Minister Peter Bethlenfalvy is signalling an extension of the Ford government’s temporary cut to gas and fuel taxes is looming in the March 26 budget.
In a wide-ranging discussion with the Star editorial board on Tuesday, Bethlenfalvy said the impact of inflation is top of mind as he prepares the provincial spending plan.
“I’m not going to betray what may or may not be in the budget. I know we’ve been very focused on helping people with the cost of living, which includes the gas tax cut,” the treasurer said.
“Clearly, that’s not just driving kids to school or to work, but it’s part of the whole supply chain,” he said, emphasizing how the savings can impact a variety of goods and services.
First announced by Premier Doug Ford before the 2022 election — and twice extended — the 5.7 cents per litre gasoline tax cut is currently supposed to expire on June 30.
But Bethlenfalvy acknowledged “it would be tough” to hike the provincial fuel tax just three months after the federal carbon levy rises on April 1.
“I’m not looking to increase any taxes or fees,” he said.
The tax break costs the treasury about $1.2 billion annually and saves the average family around $260 a year.
While bullish on Ontario’s prospects, Bethlenfalvy stressed, “there’s no question that our economy has slowed down.”
“I hope that we don’t go into recession technically,” the finance minister said, noting that is why the province maintains significant contingency funds that opposition parties have criticized.
“It has an impact on revenue so there’s no question — notwithstanding that the technical definition of a recession is two back-toback quarters (of a shrinking economy), which we haven’t seen,” he said, pointing to Ontario’s close ties to the booming U.S.
“People really feel like it’s a recession everywhere I go. The U.K. is in recession. Japan is in recession … (but) south of the border, of course, they keep beating expectations on the upside.”
In Pollara Strategic Insights’ annual economic outlook published in the Star in January, four in five respondents said they think Canada had already been plunged into a recession.
Bethlenfalvy said he understood why that sentiment is prevalent even though the province’s economy is performing better than most jurisdictions, thanks to encouraging job growth and more investment from businesses.
“You talk to a lot of people and they’re hurting. The price of food — I think we’d all would agree, wow, when you go to the grocery store, you’re getting hit hard,” he said.
The finance minister said he is also worried about the Bank of Canada’s interest rates because of the toll that takes on people’s mortgages.
With more than two years before the June 2026 election, Bethlenfalvy was mum on when the Progressive Conservatives would finally balance the budget.
In his fall economic statement last November, he had said the 2023-24 deficit would be $5.6 billion with the shortfall projected to be $5.3 billion in 2024-25.
At that time, the minister said Ontario would be back in the black with a $500-million surplus in 2025-26, in time for the next provincial vote.
That was a more gloomy picture than last March’s budget, which had forecast a $200-million surplus this year and for the treasury to have a $4.4-billion surplus in 2025-26.
The change was largely due to tax revenues being $2.6 billion lower than expected — a sign the economy was slowing after it rebounded from the COVID-19 pandemic.