Most drivers are, by now, all too familiar with the pain at the pump. But lately, as the war in Iran continues to disrupt global fuel supplies, that pain has been hitting harder. Canada’s national average gas price now sits around $1.81 per litre, having risen 28 per cent since the start of the war, with prices even higher in some cities. 

As a result, many Canadians will see the recently announced temporary suspension of the federal fuel tax on gas, diesel, and jet fuel as welcome relief. But even assuming retailers fully pass the tax savings on to drivers, that relief will be just as described: temporary. 

Following the announcement, Clean Energy Canada calculated that the tax holiday, set to last until Labour Day, will save the average driver of a standard-sized gas SUV roughly $14 per month, or $67, for the less than five months it is in place. This assumes typical driving over this time period (about 7,700 kilometres) and fuel economy (8.7L/100 km). 

It’s not nothing: those dollars could well cover a smaller grocery run or an outstanding phone bill. But compared with the savings from switching to an electric vehicle and ditching gas completely, the difference is stark. 

According to a recent Clean Energy Canada EV study and calculator using the 2025 average gas price ($1.42/L), that same driver driving a Chevrolet Equinox EV would instead save about $146 a month, or $680, in fuel savings alone over the next four-and-a-half months (EVs typically also have lower maintenance costs). More realistically, though, at today’s higher gas price ($1.81/L on April 16), the savings would be closer to $200 per month, or $940 over the period of the gas tax holiday. 

In other words, this temporary relief will help consumers save $17 a month for a few months, while an EV would help them save closer to $200 a month now, or $146 a month — indefinitely. 

Canadians are already paying attention. Back in 2022, nearly 6 in ten of them already correctly believed an EV would ultimately cost them less overall despite a higher upfront cost. Now, with gas prices spiking yet again, people are translating that belief into action: Across Canada, EV searches on used car retailer Clutch.ca have roughly doubled over the past three months, while the number of EV insurance quotes on insurer Rates.ca jumped 40 per cent this March compared to last. Meanwhile, in markets from Australia to the EU to the UK — and even the US — EV sales and interest are rising alongside fuel prices as consumers look to leave volatile gas prices behind for good.  

Meanwhile, Canada’s EV market is also beginning to regain momentum. Even before a federal rebate was reinstated, domestic sales of new EVs had started to pick up after a year of slower uptake driven by consumer uncertainty about rebates. With a $5,000 incentive back in place for many new EVs available across Canada, more budget-conscious drivers and families will be able to afford the switch — while also growing the future supply of affordable used EVs.

Indeed, this affordability is quickly eroding the myth that EVs are cars only for the wealthy. While upfront affordability gaps remain between middle-class EVs and their gas counterparts, our analysis shows that the new federal incentive is closing this gap where it matters most. 

For middle-of-the-road models like the Kia EV4, Hyundai Kona, and Chevrolet Equinox, which have pre-rebate prices about $12,000 to $15,000 higher than their gas counterparts, the federal incentive narrows that gap down to roughly $7,000 to $8,000 this year, helping buyers break even and start reaping savings sooner.

And the news that Canada would open its doors to a small number of Chinese electric vehicles has many Canadians interested in the cost savings these could bring. In a January poll, 70 per cent of those interested in an EV for their next vehicle said they would consider buying a Chinese EV. Our research shows that these EVs can be expected to offer comparable savings to other, rebate-eligible EVs over their lifetime (Chinese EVs do not qualify for the federal rebate). 

Even today, the used EV market offers attractive options. An April 16 national search of used and pre-owned vehicles from five years old or newer, priced below the 2025 average used car sale price of $34,000 or less on Autotrader.ca, the largest online used car marketplace in Canada, shows more than 2,000 listings for battery-electric vehicles, as well as many plug-in hybrid options (though our analysis shows they don’t save as much over time as fully electric cars).

While Canada has already taken important steps through the federal auto strategy to help more drivers make the switch, one critical policy remains. Canada’s tailpipe emissions standards, now in the final stages of development, will play a crucial role in shaping the kinds of vehicles available in the years ahead. Prime Minister Mark Carney has committed to strengthening them to achieve 75 per cent EV sales by 2035, in place of the now-scrapped EV Availability Standard, which would have required 100 per cent EV sales by the same date. 

Done right, strong standards will help all drivers save money. By requiring automakers to steadily improve the fuel efficiency of the cars they sell over time, they lower fuel costs for those who continue to drive gas cars and also push automakers to bring cheaper electric models to market, shifting focus away from higher-end ones and toward options that are more within reach for average households.

The goal now should be to follow through on that promise. 

After all, without thinking about it, we’ve all grown used to glancing up at the fuel price display each time we pass a gas station, only to find the digits have changed, yet again. 

It’s a small, familiar habit most drivers share, but it’s one that’s getting old. This is the third global oil shock in the past decade and there will surely be more. Meanwhile, charging an EV can cost as little as paying about 40 cents per litre for gas, and there are a growing number of practical options — new or used — already available. 

Rachel Doran is executive director at Clean Energy Canada, where she brings nearly 20 years of experience in policy, politics and law to advance clean energy solutions.  

Sicellia Tsui is a senior communications specialist at Clean Energy Canada, where she helps tell the story of Canada’s energy transition and drives the organization’s digital campaigns. 

© National Observer