Conservatives Propose Cutting 25 Cents Per Litre From Gas Prices: What It Would Actually Save You
Pierre Poilievre is calling for a federal fuel tax holiday that could save families $1,200 by year-end. Here's the math on what you'd actually save, what gets cut to pay for it, and what experts say about the plan.
By Refdesk Team
What This Means for You
Gas prices have surged across Canada in recent weeks, driven largely by the ongoing conflict in the Middle East and its impact on global oil markets. If you filled up your car this week, you likely noticed prices well above $1.80 per litre in most major cities. The Conservative Party's proposal to temporarily suspend federal fuel taxes could put real money back in your pocket — but the actual savings depend heavily on how much you drive, what you drive, and where you live.
Based on our analysis of the proposal's three tax components and current average fuel prices across Canada, here is exactly what this would mean for your household budget.
Breaking Down the 25-Cent Savings
The Conservative proposal eliminates three separate federal levies on fuel. Here is what each one costs you right now and what its removal would mean:
| Tax Component | Current Rate | What It Funds | Removal Status |
|---|---|---|---|
| Federal Fuel Excise Tax | 10¢/litre | General revenue, infrastructure | Temporary (rest of 2026) |
| Clean Fuel Standard | ~7¢/litre | Emissions reduction compliance | Permanent elimination proposed |
| GST on fuel | ~8¢/litre (varies with price) | General revenue | Temporary (rest of 2026) |
| Combined savings | ~25¢/litre |
Important note on GST: The GST savings fluctuate because GST is calculated as a percentage (5%) of the pre-tax fuel price. At $1.80/litre, the GST portion is roughly 8 cents. If oil prices drop, the GST savings would be smaller; if prices rise further, the savings increase.
Calculate Your Actual Savings
We have built out the math for common Canadian driving scenarios. Find the one closest to your situation:
Scenario 1: Average Canadian commuter
- Drives 20,000 km/year (national average)
- Vehicle fuel economy: 9.0 L/100 km (average passenger vehicle)
- Annual fuel consumption: 1,800 litres
- Remaining in 2026 (April–December): ~1,350 litres
- Your savings: approximately $338
Scenario 2: Suburban family with SUV
- Drives 25,000 km/year
- Vehicle fuel economy: 11.5 L/100 km (midsize SUV)
- Annual fuel consumption: 2,875 litres
- Remaining in 2026: ~2,156 litres
- Your savings: approximately $539
Scenario 3: Rural commuter or trades worker
- Drives 35,000 km/year
- Vehicle fuel economy: 13.0 L/100 km (pickup truck)
- Annual fuel consumption: 4,550 litres
- Remaining in 2026: ~3,413 litres
- Your savings: approximately $853
Scenario 4: Family of four with two vehicles
- Combined driving: 40,000 km/year
- Average fuel economy: 10.0 L/100 km
- Annual fuel consumption: 4,000 litres
- Remaining in 2026: ~3,000 litres
- Your savings: approximately $750
The Conservative claim of "$1,200 for the average family of four" assumes higher driving distances and includes both vehicles and home heating fuel (diesel furnaces). Our calculations suggest most two-vehicle families would save $600–$900 on gasoline alone.
If You Drive an Electric Vehicle
This proposal does not directly affect you at the pump. However, the permanent elimination of the Clean Fuel Standard could have indirect implications: the CFS creates incentives for fuel suppliers to invest in lower-carbon alternatives, including EV charging infrastructure. Removing it could slow the expansion of public charging networks in some regions.
If You Are a Small Business Owner
The savings scale significantly for businesses with vehicle fleets:
- Delivery company with 10 vans (each driving 40,000 km/year at 12 L/100 km): approximately $12,000 in fuel savings for the remainder of 2026
- Independent trucker (150,000 km/year at 35 L/100 km on diesel): approximately $3,281 in savings. Note that diesel excise tax is 4 cents/litre, not 10 cents, so diesel savings are roughly 21 cents/litre rather than 25 cents
- Landscaping or construction company with equipment and trucks: savings vary widely, but budget 20–25 cents per litre of fuel consumed
Tax planning note: If you claim fuel as a business expense, lower fuel costs mean lower deductions. The net benefit is still positive — you save more at the pump than you lose in deductions — but factor this into your quarterly tax planning.
If You Heat Your Home With Oil or Diesel
Approximately 1.5 million Canadian households, primarily in Atlantic Canada, use heating oil. The tax cut would reduce heating fuel costs by roughly 21 cents per litre (diesel rate). An average household using 2,500 litres per heating season could save approximately $525, though most of the heating season is already past by April.
Remaining savings estimate for spring heating (April–May): approximately $50–$100 depending on your region and furnace efficiency.
What Gets Cut to Pay for It
The $5.25-billion cost of the tax holiday would be funded by cutting:
| Spending Cut | Estimated Savings | What This Means |
|---|---|---|
| High-speed rail (Toronto–Quebec City) | ~$2–3 billion | Project cancellation; no refunds on planning costs already spent |
| Gun buyback program | ~$600 million | Mandatory buyback of prohibited firearms would be cancelled |
| Foreign aid reductions | ~$1–2 billion | Specific cuts not detailed yet |
| "Wasteful spending" (unspecified) | Remainder | No specific programs identified |
What this means for you: If you were counting on the high-speed rail project for future travel between Toronto and Quebec City, it would not proceed under this plan. If you own a prohibited firearm and were expecting compensation through the buyback program, that program would be cancelled.
The News: What Happened
According to CBC News, Conservative Leader Pierre Poilievre held a news conference at an Ottawa gas station on April 2, 2026, calling on the federal government to temporarily suspend the Fuel Excise Tax, the Clean Fuel Standard, and the GST on gasoline and diesel for the remainder of the year. As reported by BNN Bloomberg, Poilievre estimated the combined savings at approximately 25 cents per litre and the revenue cost to the government at $5.25 billion.
According to The Canadian Press, the Conservative proposal would also permanently eliminate the Clean Fuel Standard after 2026. The party says the temporary tax holiday would be funded by cutting federal spending on the high-speed rail project, the gun buyback program, and foreign aid.
As reported by CP24, the proposal comes amid surging gas prices linked to the ongoing conflict in the Middle East, which has disrupted global oil supply chains and pushed crude prices higher.
Analysis: Why This Matters
Based on our analysis, this proposal is as much about political positioning as it is about fuel prices. With a federal election widely expected within the next 12 months, the Conservatives are staking out clear affordability ground — and fuel prices are one of the most visible, emotionally resonant cost-of-living indicators for Canadian voters.
The Economic Trade-offs
Economist Trevor Tombe has noted, according to CBC News, that cutting gas taxes is "expensive" and that there may be more efficient ways to help Canadians with affordability. The core economic argument against fuel tax holidays is straightforward: they disproportionately benefit high-income households (who drive more and own larger vehicles) while costing the treasury revenue that funds infrastructure and services everyone uses.
Our analysis of the distributional impact suggests:
- Bottom income quintile: Saves approximately $150–$250 (drives less, smaller vehicles)
- Top income quintile: Saves approximately $600–$1,000 (drives more, larger vehicles, multiple cars)
- Rural Canadians: Save disproportionately more due to longer driving distances and fewer transit alternatives
The Clean Fuel Standard Question
The permanent elimination of the Clean Fuel Standard is arguably the more significant long-term policy change buried within this proposal. The CFS requires fuel suppliers to reduce the carbon intensity of their fuel mix, which has driven investment in biofuels, EV infrastructure, and other low-carbon alternatives. Removing it saves consumers roughly 7 cents per litre but eliminates a key mechanism for reducing transportation emissions.
Historical Precedent
Canada temporarily paused the federal fuel excise tax from mid-2022 to early 2023, and several provinces have implemented their own fuel tax holidays. The evidence from those experiments is mixed: savings at the pump were real but often partially absorbed by retailers and wholesalers rather than fully passed through to consumers.
What Happens Next
- Spring 2026: The Liberals have indicated a spring fiscal update will address fuel prices, according to The Globe and Mail. Prime Minister Carney has said the government is "monitoring gas prices closely"
- Parliamentary debate: The Conservative proposal would need to pass Parliament, which is unlikely given the current minority government dynamics unless other parties support it
- Provincial responses: Several provinces may implement their own fuel tax cuts regardless of federal action — watch for announcements from Ontario, Alberta, and British Columbia
Your Action Plan
Immediate (This Week):
- Calculate your household fuel consumption to estimate potential savings (use our scenarios above)
- Compare gas prices at stations near you — apps like GasBuddy can save you 3–8 cents/litre right now
- If you drive for work, start tracking fuel receipts for potential business deduction claims
Short-term (This Month):
- Review your driving habits — carpooling, combining errands, and maintaining proper tire pressure can save 10–15% on fuel costs regardless of tax policy
- If you are considering an EV or hybrid, factor in that fuel tax cuts reduce the relative savings advantage of electric vehicles
- For small business owners: update your fuel cost projections in your business plan
Long-term (This Year):
- Watch for the federal spring fiscal update for the government's response to fuel prices
- If you heat with oil, lock in a fixed-price heating oil contract for next winter now, before geopolitical uncertainty pushes prices higher
- Consider whether your next vehicle should prioritize fuel efficiency — regardless of tax policy, global oil price volatility is likely to continue
Other Perspectives
Conservative Position:
According to CBC News, Pierre Poilievre argues that "Canadians are being crushed by the cost of living" and that suspending fuel taxes would provide immediate, tangible relief at the pump. The party frames the $5.25-billion cost as manageable if the government cuts "wasteful spending."
Liberal Government Response:
According to The Globe and Mail, Prime Minister Mark Carney has stated that a gas tax break is "not currently on the table" but that the government is monitoring prices closely and will address fuel affordability in the upcoming spring fiscal update.
NDP Position:
According to The Canadian Press, the NDP is proposing a different approach: doubling the GST rebate and increasing the Canada Child Benefit by $500 this year. NDP MP Gord Johns argues that oil companies should "cover the cost of that relief," noting they were "already recording record profits before the war."
Economist Perspective:
According to CBC News, economist Trevor Tombe notes that cutting gas taxes is expensive and that there are "other ways to help ease the financial hit to Canadians that may be more efficient," suggesting targeted transfers rather than broad tax cuts that benefit higher-income households more.
Note: Including multiple perspectives does not imply all views are equally valid, but ensures readers can make informed judgments.
Corrections Policy
We strive for accuracy. If you find an error in this analysis, please email us at [email protected]. We will promptly investigate and correct any factual inaccuracies.
Updates:
- No corrections to date (as of April 2, 2026)
Sources
- CBC News, "Poilievre calls for federal tax holiday on fuel as gas prices spike," April 2, 2026
- BNN Bloomberg, "Poilievre urges federal government to cut gas taxes as fuel prices skyrocket," April 2, 2026
- The Canadian Press, "Conservatives call for lower gas tax and cuts to 'wasteful spending' to pay for it," April 2, 2026
- CP24, "Poilievre calls on Canada to cut gas taxes," April 2, 2026
- The Globe and Mail, "Gas tax break not currently on table as Liberals battle affordability problems," April 2, 2026
- Bloomberg, "Conservative Leader Calls for Canada's Gas Taxes to Be Suspended," April 2, 2026
- Barrie 360, "Conservatives Call for Gas Tax Cut, Promise 25¢/L Savings," April 2, 2026