A 2022 Quick Guide On The Impacts Of Gas Tax Cut in Ontario

by | Jul 7, 2022

You may have read or heard about the gas tax cut in Ontario. The fuel tax for gasoline dropped by 5.7 cents per liter on June 30, 2022. At the same time, the fuel tax for diesel decreased by 5.3 cents per liter. This is benefits in the provision of financial comfort during rising pump prices. The decrease in gas taxes will also be beneficial, especially for Mississauga’s small companies, which have historically struggled during pandemics due to high gas prices. Additionally, the six-month gas tax cut will greatly affect summer travel.

Thus, people in Mississauga are looking for trustworthy information about the effects of the gas tax cuts. Don’t stress. Because WE ARE HERE FOR YOU!  Yogi and Associates will give you accurate information about the most current adjustments to the gas tax in this article. Moreover, you can get our corporate tax services to remain compliant with the CRA. Just give us a call!

1. How Much Has Gas Tax Cut Been Implemented?

Premier Doug Ford recently announced a gas tax cut in Ontario. The reduction went into effect on July 1,2022. The government introduced legislation to lower the gas tax from 14.7 cents per liter to 9 cents per liter. Additionally, the diesel fuel tax rate has been reduced from 14.3 cents per liter to 9 cents per liter, a decrease of 5.3 cents per liter. As a result, the gas tax cut in Ontario in the gas tax is valid from July 1 to December 31, 2022.

2. What is the Impact of the Gas Tax Cut on Vehicle Drivers?

The experts predicted that drivers paying high pump prices could find some relief through a gas tax cut in Ontario. And it’s true! Mississauga vehicle drivers will now directly benefit from lower gas tax rates and eliminating any refund for license plate renewal costs.

Vehicle owners’ use of license plate stickers has long been a source of yearly household expenses. A renewal sticker will set you back $120 per year per vehicle. Households will save an average of $465 due to the gas tax reduction in 2022. The only drawback is that it is impossible to foresee how a reduction in the gas tax will affect customers in the long run.

Caroline Mulroney, Ontario Minister of Transportation, says:

“Our government has taken significant action in response to the skyrocketing cost of living by lowering the petrol and fuel tax rate, eliminating the license plate stickers and renewal costs, and removing tolls on Highways 412 and 418.”

3. Impacts of Gas Tax Cut On the Tourism Industry

In a May survey conducted by Leger:

66% of drivers said high fuel prices would urge them to cancel or limit road trips this summer.

The Mississauga tourism business will benefit from the gas tax cut because it will encourage travel. According to Chris Bloore, chief executive officer of the Tourism Industry Association of Ontario, the COVID-19 pandemic and inflation have severely affected the tourism industry. Thanks to the tax cut, families can travel and prolong their stay. 

Mr. Bloore declares:

“I’m confident that it’s going to mean those considering changing their trip from two weeks to one week will go back to spending two weeks. Because they have desperately waited for the last two and a half years to travel and get out and enjoy themselves again.”

4. Impacts of Gas Tax Cut in Ontario On Small Businesses

The gas tax cut in Ontario is also fantastic news for small businesses that suffered during the pandemic. According to Ryan Mallough, vice president of Ontario legislative affairs, a decrease in fuel costs will assist consumers. Moreover, it will benefit the shipments of goods from small company owners.

If you want to start a small business in Canada, you can get expert advice from Yogi & Associates. Just check our blog here, 10 Easy Steps to Start your Business in Canada.

5. Government’s Strategy Behind Gas Tax Cut in Ontario

The Ontario Government has created different strategies to comfort people. Their final plan includes lowering gas and gasoline taxes to reduce the cost of living. Thus, the Government has made different strategies to comfort people:

“A strong economy begins with a strong, well-educated workforce.” -Bill Ownes

1. Relief for Vehicle Owners & Passengers

To deduct repay money incurred by millions of Ontario automobile owners, the Government has removed the license plate renewal fees and plate stickers. This will benefit vehicle drivers and passengers into two ways:

• The recent decrease in petrol prices will result in annual savings for car owners of  $120 in Southern Ontario.
• And $60 in Northern Ontario for passenger and light commercial vehicles.

2. Removal of Highway Tolls

The reduction in gas rates have permanently removed the tolls on Highways 412 & 418.

3. Implementing Tax Relief through Tax Credits

For many people in Mississauga, the government’s tax relief policy includes eliminating gas taxes and gasoline prices. For instance, the Low-Income Employees Tax Credit, the Senior Home Safety Tax Credit, the Ontario Jobs Training Tax Credit, and the Ontario Child Care Tax Credit are all benefits for workers and families.

Additional Information!

Different costs are included in the price paid at the pump. For instance, crude oil cost, wholesale and retail profit margins, federal excise tax, federal carbon tax, Ontario fuel/gas tax, and HST.

4. Reduction in the cost of the Carbon Tax

The Ontario administration has requested the Federal Government to decrease the carbon tax cost. Thus, the request to reduce carbon tax costs is meant to further assist people and companies in Ontario.

The Bottom Line!

If you’re a small business owner driving a car and using gas, the gas tax reduction will positively impact your bottom line. Of course, no one is certain whether prices will continue to rise, and some people believe that these recent changes in gas prices will encourage gas companies and customers alike to conserve their money, even if the price of gasoline falls. But the fact is that the recent changes in gas prices will be beneficial for the small business owners, vehicle drivers, and the tourism industry in Mississauga. For more information regarding the reduction in gas taxes, don’t hesitate to contact Yogi & Associates and get professional advice from our counselor.

Feel Free to Contact Yogi & Associates!