For three years, any Ontario business running a vehicle fleet had to keep a recurring item on its compliance calendar: watch for the government's next announcement on whether the temporary gas and diesel tax cut would be extended again, or allowed to expire. That item can now come off the list. The 9.0-cents-per-litre rate on gasoline and diesel is no longer a temporary measure subject to a renewal date — it is the permanent statutory rate, in force since July 1, 2025. At the same time, the province eliminated the fuel tax on propane used in licensed road vehicles entirely. For a Toronto-area delivery, trucking, trades, or field-service business, that removes a recurring source of fuel-cost uncertainty and simplifies one line of fleet tax compliance.
How the "temporary" cut became permanent law
Ontario first cut both rates on July 1, 2022: the gasoline tax dropped from 14.7 cents per litre to 9.0 cents (a 5.7-cent reduction), and the fuel tax on clear diesel, clear kerosene, and biodiesel dropped from 14.3 cents per litre to 9.0 cents (a 5.3-cent reduction). It was explicitly temporary, originally set to expire December 31, 2022. The government then extended it three more times — to June 30, 2024, then to December 31, 2024, then to June 30, 2025 — each extension requiring its own legislative action and leaving fleet operators to budget around an expiry date that kept moving.
The 2025 Ontario Budget, tabled May 15, 2025, proposed ending that cycle: fixing both rates at 9.0 cents per litre permanently, and separately eliminating the fuel tax on propane used in licensed road vehicles. Those were proposals only until the implementing legislation cleared the Legislature. That happened on June 5, 2025, when Bill 24, the Plan to Protect Ontario Act (Budget Measures), 2025, received Royal Assent and became Chapter 10 of the Statutes of Ontario, 2025. Schedule 7 of that act amended the Gasoline Tax Act; Schedule 6 amended the Fuel Tax Act. Both sets of amendments took effect July 1, 2025 — removing propane from the gasoline tax provisions and converting the 9.0-cent rate from a temporary reduction into the Acts' standing rate.
Source: Government of Ontario — Gasoline Tax Act, R.S.O. 1990, c. G.5 (consolidated, showing last amendment 2025, c. 10, Sched. 7) and Government of Ontario — Fuel Tax Act, R.S.O. 1990, c. F.35 (consolidated, showing last amendment 2025, c. 10, Sched. 6).
The rates, before and after
| Before July 1, 2022 | July 1, 2022 – June 30, 2025 | From July 1, 2025 | |
|---|---|---|---|
| Gasoline tax | 14.7¢/litre | 9.0¢/litre (temporary) | 9.0¢/litre (permanent) |
| Fuel tax (clear diesel, clear kerosene, biodiesel) | 14.3¢/litre | 9.0¢/litre (temporary) | 9.0¢/litre (permanent) |
| Propane, licensed road vehicles | taxed under the Gasoline Tax Act | taxed under the Gasoline Tax Act | not taxed |
The current rates are confirmed on the Ministry of Finance's own rate pages: unleaded gasoline at 9.0 cents per litre and diesel/clear kerosene/biodiesel at 9.0 cents per litre, with a separate 4.5-cent rate that continues to apply to railway equipment fuel.
Source: Government of Ontario — Gasoline Tax rates and Government of Ontario — Fuel Tax rates.
Why "permanent" is the meaningful word here
This is worth being precise about, because the distinction between a temporary reduction and a permanent rate change is not just semantic for a business that budgets fuel costs more than a quarter or two out. Under the 2022–2025 version of the law, the 9.0-cent rate was always one legislative decision away from reverting to 14.7/14.3 cents — and for three straight renewal cycles, that decision came down to the wire, close enough to each expiry date that finance teams had to carry both scenarios in their forecasts. Since July 1, 2025, there is no expiry date to track. The 9.0-cent rate is simply what the Gasoline Tax Act and Fuel Tax Act now say, the same way the pre-2022 14.7/14.3-cent rates were just "the rate" before any cut existed. A future government could still legislate a change in either direction, but that would require a new budget bill and a new Royal Assent — not the lapse of a sunset clause.
The propane change works the same way: it isn't a rebate or a credit a business has to apply for. Propane used in a licensed road vehicle in Ontario is simply no longer a taxable product under the Gasoline Tax Act, which removes a tax-coding line for any business running propane-fuelled fleet vehicles.
Who this actually affects
- Trucking, courier, and delivery operations running meaningful diesel volume see the most direct, ongoing effect — every litre is taxed at a rate that's no longer carrying renewal risk, which makes multi-year fleet cost projections more reliable.
- Construction, trades, and field-service businesses with mixed gasoline and diesel fleets get the same stability on both fuel types.
- Businesses operating propane-fuelled road vehicles — some courier and service fleets still run on propane — no longer need to track or remit Gasoline Tax Act propane tax at all, provided the vehicle is licensed for road use; propane used off-road (for example, in warehouse forklifts) was taxed differently to begin with and isn't affected by this change.
- Any Toronto-area business building a 2027 or multi-year operating budget now can treat the 9.0-cent provincial rate as a fixed input, rather than a variable to stress-test against a possible reversion.
This is distinct from, and should not be confused with, the federal fuel excise tax, which remains a temporary, phased measure on its own separate legislative track through early 2027. The two taxes are administered differently and currently move on entirely different timelines — see our breakdown of the federal fuel excise tax extension for that side of the fuel-cost picture. Ontario's provincial 9.0-cent rate, covered here, is the one part of the equation that's now settled.
What to do with this
- Remove the fuel tax renewal risk from your forecasting. If your fuel-cost model still carries a "what if the cut lapses" scenario, that scenario no longer applies to the Ontario provincial rate — it's now a fixed line item like any other statutory tax rate.
- Confirm your fuel tax coding reflects the permanent rate, particularly if your bookkeeping system or supplier invoices still reference the cut as a "temporary reduction" from 2022.
- Check whether your fleet uses road-licensed propane vehicles and confirm your fuel supplier and internal records have stopped applying Gasoline Tax Act propane tax on or after July 1, 2025.
- Keep the federal and provincial fuel tax tracks separate in your planning — the Ontario rate is now fixed, while the federal excise tax is still phasing through scheduled changes into 2027.
Key takeaways
- Ontario's gasoline and diesel/fuel tax rates, both 9.0 cents per litre, are permanent as of July 1, 2025 — no longer a temporary cut subject to expiry or renewal.
- The change was enacted through Bill 24, the Plan to Protect Ontario Act (Budget Measures), 2025, which received Royal Assent on June 5, 2025 (Statutes of Ontario, 2025, Chapter 10).
- The same legislation eliminated the Gasoline Tax Act's tax on propane used in licensed road vehicles, effective the same date.
- This is separate from the federal fuel excise tax, which remains temporary and is on its own phase-out schedule into 2027.
- Businesses can now treat Ontario's 9.0-cent provincial rate as a fixed planning input rather than a renewal risk.
If your Toronto or wider Ontario business runs a fleet, RN Canada can help confirm your fuel tax coding reflects the current permanent rates and fold this — alongside the federal fuel excise schedule — into your operating budget and cash flow forecast. Our Ontario corporate tax guide has the current provincial rate and credit landscape for Ontario-operating corporations.