How the federal government could make gas more affordable for Canadians: expert

Bloomberg05-18

When the federal government suspended the excise tax that would save Canadians roughly 10 cents per litre, it was seen as the first and, perhaps, most obvious step to reduce the price at the pumps in ...

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So there is a balancing act, given Canada’s fiscal situation about how much of a downside in terms of tax revenue each jurisdiction can afford.”Two men sit in a small boat on the water as a mix of bulk carriers, cargo ships, and service vessels line the horizon in the Strait of Hormuz off Bandar Abbas, Iran, Monday, April 27, 2026.(Razieh Poudat/ISNA via AP) Two men sit in a small boat on the water as a mix of bulk carriers, cargo ships, and service vessels line the horizon in the Strait of Hormuz off Bandar Abbas, Iran, Monday, April 27, 2026. (Razieh Poudat/ISNA via AP) ‘Once that tax comes off, it’s hard to put it back on’Gitane also adds that the high price of oil is a “double-edged sword” where governments will have to weigh the short- and long-term benefits of their decisions.“It is beneficial to energy-producing jurisdictions in the short term in terms of all of that additional tax and royalty revenue that is being collected which can then be used to fund all kinds of social programs. The downside is the longer the price is high, the greater the risk that the economy goes into a recession, and that means consumers are buying less.”When it comes to what she would do if she was in a decision-making role, Gitane said Canada may want to hold off on removing taxes and instead find other ways to provide relief to Canadians in the short term, like providing a rebate.“You could do things like potentially increase a GST rebate check, which is what we’re seeing,” she said, adding there are other ways the federal government can “recycle money through the economy.”“Knowing that you’re going to have this increased tax revenue coming in for a while, you might actually want to help ease the pain in the longer term, as opposed to do something in the short term, because once those prices come down, once that tax comes off, it’s hard to put it back on.”A woman pumps gas at a gas station in Mississauga, Ont., on Feb. 13, 2024. THE CANADIAN PRESS/Christopher Katsarov A woman pumps gas at a gas station in Mississauga, Ont., on Feb. 13, 2024. THE CANADIAN PRESS/Christopher Katsarov De Silva adds that even though Canada is among the largest crude oil producers in the world and gets most of its own oil domestically, the closure of the Strait of Hormuz halfway around the world still affects Canadian gas prices. “Oil is a global commodity and the price is set on the international market, and a barrel of oil is not less expensive in Canada,” said De Silva. “Even though we are a major oil exporter, it does not cost us less to buy that at home than it would be what we would sell it for on the international market.”De Silva adds that because there is now roughly 20 per cent less oil flowing to international markets, the demand is the same, so the price goes up for everyone.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.42.2","shortVersion":"4.42.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2636075056","isCrawlerRequest":true}