Canadians Back Gas Tax Cuts as Response to Oil Prices, Poll Finds

Currently, gasoline carries a federal tax of 10 Canadian cents per litre, and an additional 5% goods and services tax

By Erik Hertzberg

Canadians rank cutting fuel taxes as the No. 1 action Prime Minister Mark Carney should take to offset higher gasoline prices.

Nearly 39 per cent of respondents listed a reduction in fuel-related taxes as their preferred course of action from the federal government, according to a Nanos Research Group survey for Bloomberg News. Increasing “investment in long-term energy alternatives” was the second most popular response, favoured by 22 per cent.

Temporary financial relief — including rebates and credits for drivers, expanding incentives for electric vehicle purchases and incentives for public transit use — all ranked third among preferred actions Carney should consider, each with 9.4 per cent support.

The war in Iran has led to a spike in global energy costs, and the price of gasoline in Canada has surged 48 per cent since the start of 2026. That’s adding to already elevated affordability woes, which have dominated political discourse for years.

There is scope for Ottawa to wait and see how the fragile truce between the United States and Iran develops. While costs at the pump remain elevated, crude prices are down from their peak, with Brent trading at about US$99 a barrel on Thursday. It would be politically risky to cut taxes now, only to reverse course and add the levies back if prices stabilize lower.

Currently, gasoline carries a federal tax of 10 Canadian cents per litre, and an additional five per cent goods and services tax.

Conservative Leader Pierre Poilievre has called for those levies to be suspended, saying it would bring costs more in line with U.S. prices.

Carney has said his government is focused on de-escalation of the conflict, but is also looking at ways “to help cushion the blow for Canadians.” He and his cabinet ministers haven’t ruled out a cut to fuel charges.

Household budgets are increasingly being diverted to gas, the Nanos poll shows. More than a third of Canadians reported driving less due to higher prices, and 16 per cent say they are cutting other spending.

That adds more strain to Canada’s economy, which is already weakened by the tariff dispute with the U.S. The country’s exports haven’t fully recovered after multiple sectors were hit with levies last year, and labour and housing markets are soft.

There are also fiscal risks to further tax cuts and reducing federal revenues. While Carney’s agenda is focused on boosting long-term productive capacity and real wages, rising pressure for additional near-term support risks crowding out those structural priorities.

Economists, investors and the International Monetary Fund have signalled some tolerance for deficits in Canada if the spending is tied to productivity-enhancing measures. But forgone revenue from cutting gas taxes would hit coffers, and the federal government is already set to run a $65.4 billion deficit this fiscal year.

Randall Bartlett, senior director of Canadian economics with Desjardins Securities, said cutting the gas tax and other federal taxes on gasoline would cost about $7 billion per year.

“With fiscal room already strained, any measures will need to be tempered and temporary,” he said in a post on LinkedIn.

The Bloomberg Nanos survey of 1,099 Canadians was taken between March 31 and April 4. The telephone and online survey is accurate plus or minus 3 percentage points, 19 times out of 20.

—With assistance from Curtis Heinzl.

Bloomberg.com

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