Last week the Carney government extended its holiday on the federal excise tax on gasoline and diesel fuel. The holiday began on April 20 to cushion consumers against sky-high fuel prices. 

The tax break (worth ten cents per litre on gasoline, and four for diesel) was supposed to end on Labour Day. Now it will continue until January 31, 2027. Then the tax will be phased back in over the next two months.

The government is discovering, however, that it is easier to cut taxes than to raise them. With gasoline prices still at historic highs thanks to Donald Trump’s continuing misadventure in the Persian Gulf, the prospect of adding 10 more cents to gasoline prices was daunting.

Pressure from Conservatives and petroleum lobbyists to permanently remove the tax will grow again as January 31 approaches. On the safe assumption that lasting peace in the Middle East has not broken out by then, fuel prices will likely still be sky-high. We may never see the return of this tax.

Ironically, gasoline and diesel prices in Canada today are higher, even with the tax break, than on April 19, before it came into effect. So its full value has been absorbed, and then some, by continued escalation in petroleum prices.

It seems that the government can’t outrun the petroleum market — dominated as it is by geopolitics, financial speculation and corporate........

© National Observer