Summary#

Bill 111, Tax Relief at the Pumps Act, 2022, became law as Chapter 13 of Ontario’s 2022 statutes. It amended the Fuel Tax Act and the Gasoline Tax Act to temporarily reduce taxes on some fuel purchases; the reduction period has ended. The title presents the goal as temporary tax relief at the pumps, but the law did not require retailers to pass the full tax reduction on to customers.

• Tax on eligible clear fuel was reduced by 5.3 cents per litre. The reduction did not cover clear fuel received or used to operate certain railway equipment connected with public transit.
• Tax on gasoline was reduced by 5.7 cents per litre; leaded gasoline was excluded.
• The reductions covered tax payable from July 1 to December 31, 2022, and tax payable later on fuel bought by a retail dealer or retailer during that period.
• The Minister could require fuel businesses named in the Fuel Tax Act amendments to submit inventory reports. The amendments did not add this power to the Gasoline Tax Act.
• The Acts set special routes and deadlines for certain businesses to seek refunds of tax overpaid because the reduced rates were not applied.

What it means for you#

• People buying fuel: The tax due on eligible purchases was lower during the covered period. The law did not set pump prices or require a price reduction equal to the tax cut. This Act provides no ongoing reduction now.
• Retail dealers, retailers, wholesalers, distributors, importers and collectors: The amendments set out how some could seek refunds for overpaid tax. Retail dealers or wholesalers who were not collectors, distributors or importers generally had to apply through the business from which they bought the fuel. That business had to decide the claim and refund the amount it approved or apply it to other fuel-purchase amounts owed. It had to give reasons if it refused all or part of a claim.
• Fuel businesses under the Fuel Tax Act: The Minister may require a retail dealer, wholesaler, distributor, importer or collector to report fuel they owned or possessed on specified dates, along with other required information, by a set deadline.
• Minister: The Minister could set later refund deadlines and allow late applications when, in the Minister’s opinion, mitigating circumstances explained the delay. Refunds under these special rules did not earn interest.

Money#

The law reduced tax payable on eligible fuel, but no estimate of the resulting public revenue cost is available.

• The tax reductions were 5.3 cents per litre for eligible clear fuel and 5.7 cents per litre for eligible gasoline.
• No publicly available information on total revenue lost, fuel-business costs, or the amount of refunds is included in the supplied material.

What is unclear#

• The supplied material does not show whether the tax reductions were passed on to customers through lower pump prices.
• It does not say whether the Minister set later deadlines or granted extensions, or how much tax was refunded.
• The parent Acts were not supplied, so the current wording and definitions in those Acts, including the meaning of “clear fuel,” could not be checked against the amendments.
• The amendments do not set out how many inventory reports might be required or how much time and work they might take.

Case for#

• The bill directly reduced tax payable on eligible fuel for a defined period, which could lower the tax burden on those purchases.
• It created ways for eligible businesses to seek refunds when they had paid more tax than the reduced rates required.
• The inventory-report power could help the Minister administer or enforce the Fuel Tax Act, including matters related to fuel inventories.

Case against#

• Lower tax payable did not guarantee lower pump prices: the bill did not require retailers to pass the full reduction on to customers.
• The relief was temporary and has ended; it did not create a continuing tax reduction.
• Some businesses faced application requirements and deadlines to recover overpaid tax, and the special refunds did not earn interest.
• The Minister’s power to require inventory reports under the Fuel Tax Act does not specify how often reports could be required or how much information would be demanded.