Ontario is finally getting relief on gas prices as a new tax will come into effect on Canada Day that will provide some savings to motorists in the province.

Effective from July 1 to December 31, 2022, the gas tax rate in Ontario will be dropping 14.7 cents to 9 cents per litre.

The gas tax cut follows similar measures in Alberta that previously announced a cut to their gas tax. A gas tax cut is also being considered in the United States.

Here's an excerpt from today's press release from the Ontario government about the impending gas tax cut.

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As part of its plan to keep costs down for Ontario families and businesses, the Ontario government is providing more relief at the pumps by cutting the gas tax by 5.7 cents per litre and the fuel tax by 5.3 cents per litre for six months, beginning July 1.

“It has never been more important to get it done and provide Ontarians with real relief,” said Premier Doug Ford. “This gas tax cut will provide more relief at the pumps for hardworking families and businesses and put more money back in their pockets, where it belongs.”

Effective July 1 until December 31, 2022, the gas tax rate will be cut from 14.7 cents per litre to 9 cents per litre, representing a cut of 5.7 cents per litre. The fuel tax rate, which applies to diesel, will be reduced from 14.3 cents per litre to 9 cents per litre, representing a cut of 5.3 cents per litre. When combined with the 4.3 cents per litre savings from the elimination of the previous government’s cap and trade carbon tax, the reduction in provincial taxes and charges on gas totals 10 cents per litre.

Vehicle owners in Ontario will see significant direct savings from the gas tax cut and the elimination and refunding of licence plate renewal fees, with households benefitting from an average combined savings of about $465 in 2022.

“People and businesses are feeling the pinch of high gas prices and grocery bills,” said Peter Bethlenfalvy, Minister of Finance. “Our government is cutting the gas and fuel tax rates to put money back in people’s pockets and help keep costs down.”

“As we build up Ontario’s transportation network, our government is working hard to keep costs down for drivers and families,” said Caroline Mulroney, Minister of Transportation. “At a time when the price of living has skyrocketed, our government has taken strong action by cutting the gas and fuel tax rate, eliminating licence plate stickers and renewal fees, and removing tolls on Highways 412 and 418.”

Cutting gas and fuel taxes is part of the government’s broader plan to provide immediate cost-of-living relief, including:

• Cutting costs for millions of Ontario vehicle owners by refunding licence plate sticker renewal fees paid since March 2020, and eliminating licence plate renewal fees and plate stickers on a go-forward basis, saving vehicle owners $120 a year in southern Ontario and $60 a year in Northern Ontario for passenger and light commercial vehicles.
• Permanently removing tolls on Highways 412 and 418.
• Providing tax relief for workers, families and seniors through the Low-Income Workers Tax Credit, the Seniors’ Home Safety Tax Credit, the Ontario Jobs Training Tax Credit and the Ontario Child Care Tax Credit.
• Implementing the new Canada‐wide Early Learning and Child Care System, which will enable Ontario to achieve an average of $10‐a‐day child care by September 2025.

To further help families and businesses, the Ontario government continues to encourage the federal government to work with the province by reducing the cost of the carbon tax, which increased to 11.05 cents per litre on gasoline and 13.41 cents per litre on diesel on April 1, 2022.