Will Canada cut the gas tax amid price spike? Champagne won’t say

Chief Economist at Signal49 Research Pedro Antunes on the ‘mild break’ in gas prices and how the war will have a long-lasting impact on the economy.

As Canadian drivers continue to see a spike in the price at the pump, Finance Minister François-Philippe Champagne won’t commit either way on dropping the gas tax to provide some relief.

The war in the Middle East has now exceeded three weeks, with Iran continuing to block the vital Strait of Hormuz, sending oil prices soaring globally.

According to CAA, which tracks the national average gas price, the average cost of regular gas across Canada is 173.9 cents per litre on Tuesday, compared to 129.9 cents per litre a month ago.

“We’re monitoring the situation,” Champagne said on his way into a cabinet meeting on Parliament Hill Tuesday, when asked directly whether cutting the gas tax is something the federal government is considering.

“There’s a lot of things happening,” he added. “We’re looking at what’s happening in the country, what’s happening internationally, and discussing with our international partners.”

The federal government charges an excise tax at a flat rate of 10 cents per litre on gasoline, and four cents per litre on diesel.

U.S. President Donald Trump, meanwhile, issued an ultimatum on Saturday, writing on Truth Social that the United States would “hit and obliterate” Iran’s power plants in 48 hours if the Middle Eastern country did not reopen the Strait of Hormuz. He has since seemingly backtracked on the threat.

The Canadian government has said it is working with partners to de-escalate tensions in the Middle East, and is calling for the strait to be reopened, but as of Tuesday, Defence Minister David McGuinty has not said what exactly Canada is prepared to contribute.