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Doug Ford vows to cut gas prices, but won't say how revenue would be replaced

Last Updated May 16, 2018 at 4:53 pm EST

A motorist reaches for the pump at a gas station in Toronto on Feb. 24, 2011. THE CANADIAN PRESS/Patrick Dell

Doug Ford says a Progressive Conservative government would cut gas prices by 10 cents a litre in Ontario, including by reducing the gas tax, but he wasn’t clear on how he would replace the lost revenue.

The Tory leader said he’d do so partly by scrapping the province’s cap-and-trade system, which puts a price on carbon and has added 4.3 cents a litre to the price of gasoline.

“God forbid, if the NDP or Liberals were ever (voted) in (gasoline) would be $2 a litre by next summer,” said Ford.

“There’s no way it’s going to hit $2 a litre,” Roger McKnight, senior petroleum analyst at En-Pro International Inc., tells CityNews.

“If the price of gasoline in Ontario went up $2 a litre and the cap and trade was increased by 23 cents, you could kiss the Ontario economy goodbye.”

McKnight says if he were Ford, he were Ford he would look at the HST portion of the gas tax.

“At today’s prices, the HST portion is 16 cents a litre. If Mr. Ford wants to reduce the price by 2 cents a litre overnight, he merely applies the tax assuming it’s at $1.21 a litre. Forget the cap and trade, cap the price at which HST is applied to any current price.”

Ford said he would also cut the provincial gas tax by 5.7 cents a litre. Currently, drivers pay 14.7 cents per litre of gasoline in provincial tax and 14.3 cents on diesel. The Tories would reduce both taxes to nine cents per litre, which they say would mean drivers pay $1.19 billion less per year.

But that also means that money isn’t going to provincial coffers, along with $2 billion that the province brought in from cap and trade last year.

When asked how he would make up for the lost revenue, Ford said, “we can’t afford not to do this.”

“(Drivers) are frustrated at being gouged at the gas pumps,” he said. “This will stimulate the economy when we put money back into their pocket. We aren’t putting it anywhere else … They’ll go out and shop, stimulate the economy.”

Municipalities receive two cents per litre from the provincial gas tax, and the Liberal government announced last year that they would increase it in 2019 to 2.5 cents a litre, up to four cents by 2021 – increases the Tories would maintain.

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Leaders’ election promises on child care, gas prices, vague on details

Here’s a glance at promises Ontario’s three major political parties have made on gas prices:

PROGRESSIVE CONSERVATIVES: Cut gas prices by 10 cents per litre by scrapping the province’s cap-and-trade system and lowering the provincial gas tax. Cap and trade has added 4.3 cents a litre to the price of gas. The Tories would cut the provincial gas tax by 5.7 cents a litre.

NDP: The platform promises to bring “stability and transparency to gas prices,” based on a 2017 private member’s bill that would regulate gas prices. Gilles Bisson’s bill would have allowed the Ontario Energy Board to control both the retail price and wholesale mark-up of petroleum products in the province.

LIBERALS: Their cap-and-trade program added 4.3 cents per litre to the price of gasoline. They also promised to double municipalities’ share of the gas tax. The province currently gets 14.7 cents per litre and gives two cents per litre to municipalities for transit funding. The Liberals have said they would raise that to four cents by 2021 without increasing what drivers pay.