Prime Minister Mark Carney said his government is paying close attention to fuel prices and looking at ways to mitigate the impact of increases on consumers.
Carney made the comment when taking questions from reporters in Brampton on April 7. The prime minister was asked why fuel prices are spiking in Canada when the country is a major oil producer.
Carney remarked that oil prices are set in a global market and impact all countries alike. West Texas Intermediate (WTI) crude oil was trading at US$65 a barrel before the start of the Iran war and has now surpassed US$110.
Canadians have felt the effect at the pump, with the average gasoline price in the country rising 50 cents over the past month to $1.91 a litre, according to Natural Resources Canada. In Vancouver, gas prices have been above $2 for weeks, and prices are now at $2.18 a litre.
“And so the question becomes, and this is what the government’s focused on, is how long is this going to persist, and what can we do to help cushion the blow for Canadians,” Carney said. “That’s something we’re looking at.”
The prime minister did not say what measures are being considered to lower gas prices. His predecessor Prime Minister Justin Trudeau had implemented a GST tax holiday on some items in late 2024 to help with affordability.
Carney’s government also implemented a boost to the GST credit earlier this year—rebranded as the Canada Groceries and Essentials Benefit—to help low- and modest-income Canadians with the cost of living. The measure was expedited through Parliament with support from the Conservatives.
Carney’s comment about Ottawa considering measures to lower gas prices comes a few days after the Tories called on the federal government to remove its taxes on fuel for the remainder of the year. Conservative Leader Pierre Poilievre said the move would bring down fuel prices by 25 cents a litre.
The Canadian Fuels Association says that over 50 percent of the price at the pump goes to pay taxes to various government levels.
In an open letter to Carney on April 7, Poilievre reiterated his call for the removal of federal taxes. He said the federal government stands to collect much higher revenues from taxes due to higher oil prices.
“You should use $5 billion of the estimated $9 billion in additional revenue to remove all federal taxes on gas and diesel, giving Canadians a relief at the pumps until the end of 2026,” Poilievre said.
The Tory leader said the federal fuel excise tax and the GST on gas and diesel should be suspended, whereas the Clean Fuel Regulations (CFR) should be permanently abolished. Poilievre has described the CFR as the new “carbon tax” after Carney abolished the consumer-facing fuel charge.
Oil prices have spiked since the United States and Israel launched their attack on Iran on Feb. 28. Iran has virtually closed the Strait of Hormuz, south of its territory, through which around 20 percent of the world’s oil ships.
U.S. President Donald Trump has threatened to attack Iran’s power plants and bridges if it doesn’t open the Strait of Hormuz. The president set the deadline of 8 p.m. on April 7 for Iran to strike a deal, but similar deadlines have shifted during the conflict.
Trump warned on April 7 that a “whole of civilization will die tonight” if no deal is reached. “I don’t want that to happen, but it probably will,” Trump said on Truth Social.
Carney was asked to comment on the matter during his press conference and said he expects all parties in any conflict to respect international law, which he said includes not targeting civilians or civilian infrastructure.
“I’ll just observe that there are some negotiations going on, and that there is often a gap between what’s said publicly and what’s happening privately,” he said.
Diplomatic efforts have continued in the meantime, with Pakistan serving as an intermediary. Iran has so far rejected any deal and made counter-proposals. The regime asked Iranians to form human chains around critical infrastructure to shield them from air strikes.
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