Conservatives propose eliminating tax on diesel sales until Canada Day

1:54 Canada facing growing diesel crisis amid trade tensions with U.S.

Conservative Leader Pierre Poilievre is pitching a plan to cut federal taxes on diesel fuel and help ensure Canada has affordable supplies of the fuel in the future.

The Conservatives say Canada already produces enough diesel to meet national demand, but transportation bottlenecks leave some regions dependent on U.S. imports.

In April, as global fuel prices rose, Ottawa introduced a temporary suspension of the federal fuel excise tax. It has extended the suspension through January, and will collect 50 per cent of the regular excise tax rate from Feb. 1 through March 31, 2027.

Poilievre proposes eliminating all tax on diesel sales until at least Canada Day by extending the full fuel excise tax cut until July 1 of next year and removing the GST from the purchase of fuel.

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“When farmers and truckers pay more, the price gets passed on to you,” Poilievre said Sunday at a suburban Ottawa gas station.

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“Why aren’t we using our oil to power our people? We should be energy independent, and you, the Canadian family, should enjoy the price savings from that.”

Poilievre also advocates removing all diesel production taxes by permanently scrapping the federal industrial carbon tax and the Clean Fuel Standard, which he says adds costs to the production of diesel and discourages new investment in refineries.

The Conservatives want refineries to be excluded from the federal impact assessment process, saying this would not eliminate environmental protection. Refineries would still have to follow federal rules on pollution, wastewater, leaks and monitoring, as well as provincial environmental laws and permits, the party says.

The Conservatives say the overall plan would expand refining capacity, help refineries process more Canadian crude and build the transportation and storage infrastructure needed to supply every region.

The office of Prime Minister Mark Carney had no immediate response to a request for comment on Poilievre’s proposals.

Asked if he envisions Canada eventually transitioning away from diesel, Poilievre said the focus needs to be on affordability.

“Affordable fuel is one of the most important pillars to defeat poverty, enrich our middle class and make our country self-reliant,” he said.

“I do not want to phase out Canadian oil and gas. I want to produce more of it and at a lower price.”