Canada Conservative Leader Urges Temporary Suspension of Federal Fuel Taxes

Based on coverage from CBC, Bloomberg, Global News, The Epoch Times, The Toronto Star, and The Toronto Star.

Pierre Poilievre wants Ottawa to hit pause on federal fuel taxes for the rest of the year, arguing Canadians need quick relief as gasoline and diesel prices jump alongside the war in Iran and disrupted oil shipping through the Strait of Hormuz.

As the Conservative leader calls for a pause on federal fuel taxes, the ongoing debate about energy policy in Canada is further complicated by Alberta Premier's recent push for new pipeline projects amid rising global oil prices, which underscores the urgency of addressing fuel costs for Canadians. For more context on this issue, see our coverage of the Premier's pipeline proposal here.

The Conservative leader is pitching a temporary lift of the GST and federal excise tax on gasoline and diesel. He is also calling for Ottawa’s clean fuel regulations to be scrapped permanently, saying federal policy is keeping Canadian fuel costs higher than they should be, even in a major oil-producing country.

Poilievre calls for federal gas tax pause

Poilievre says removing the federal excise tax, the five per cent GST, and costs tied to the clean fuel standard would cut gasoline prices by about 25 cents per litre. In one version of his pitch, he said that would save roughly $1,200 a year for an average family of four.

He also frames it as a competitiveness issue with the U.S., arguing Canadians pay more at the pump because of “Liberal taxes.” In a statement, Poilievre tied fuel costs to everyday life: seniors driving to see grandkids, families getting to hockey, and workers filling up trucks.

This is not a brand-new idea from him. He made a similar call for a fuel tax holiday heading into summer 2024 when gas prices rose in parts of the country.

War in Iran drives oil and gas higher

Multiple reports point to the Middle East conflict as the big immediate driver. Oil prices have surged, with West Texas Intermediate (WTI) nearing US$114 a barrel after a televised address by U.S. President Donald Trump about the war.

The Strait of Hormuz disruption matters because it is a key global chokepoint. GasBuddy’s Patrick De Haan said about 20 per cent of the world’s oil supply flowed through Hormuz before it was shut down during the war, and he expects gasoline and diesel prices to keep rising until it reopens. He also warned diesel could hit a record high within days.

The Canadian Automobile Association put the national average for gasoline at about $1.78 per litre, up roughly 35 per cent from a month earlier. Bank of Montreal economists said March saw the biggest monthly percentage increase in Canadian gasoline prices in data going back to 1950.

Alberta pump prices and provincial tax rules

The sticker shock is already obvious in Alberta. Reports from Edmonton and Calgary pegged prices around $1.74 to $1.75 per litre on Thursday, a bitter reality in an oil-rich province.

Alberta’s provincial fuel tax is 13 cents per litre for regular gas (and four cents per litre for marked gasoline and marked diesel for authorized off-road uses like tractors and generators). The province has a relief program that reduces the provincial fuel tax when WTI averages at least US$80 over a 20-trading-day review window. If WTI hits $90, Alberta’s provincial fuel tax can be suspended.

Even with oil well over US$100, Alberta Finance Minister Nate Horner said the province may still need up to three months to determine whether the trigger is met, because the program relies on monitoring periods and quarterly timing. Horner also pointed to Alberta’s fiscal picture, including a $9.4 billion deficit, and said the province is bound by its spending rules.

Ottawa’s response and the political backdrop

Prime Minister Mark Carney has not announced direct gas-price measures so far, though one report says he did not rule out lowering gas taxes and suggested his spring fiscal update would be the time to answer that. Another note in the coverage: Carney’s government increased the GST credit in January for lower-income Canadians, pitching it as help with rising grocery costs.

Poilievre, meanwhile, says his party’s plan would cost $5.25 billion and would be offset through a “dollar-for-dollar” approach, naming potential cuts like the gun buyback, the federal bureaucracy, consultants, foreign aid, and the Liberals’ proposed ALTO train project.

Would a tax holiday lower prices?

There is a debate even among people who like the idea in principle. Some Albertans interviewed said cutting gas taxes makes sense when costs spike and ripple through food and shipping.

But De Haan at GasBuddy warned a tax holiday could backfire by boosting demand at the worst possible time, removing disincentives to drive just as supply is constrained, which could push prices even higher.

For Canadians, the next concrete moment to watch is whether the Carney government signals anything in its spring fiscal update, and whether provinces like Alberta end up triggering their own fuel-tax relief as high oil prices work through the quarterly formulas.

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