Conservative Leader Pierre Poilievre is urging Prime Minister Mark Carney to extend federal diesel tax relief before Canada’s Nov. 5 budget, as the Parliamentary Budget Officer (PBO) says current plans would miss a target for a declining deficit-to-GDP ratio.
Global News and The Canadian Press reported that a Nov. 1 letter from Poilievre asked Carney to remove all federal taxes on diesel until Canada Day and suspend the goods and services tax (GST) on fuel until summer. The reports also described a request to end a fuel-standard tax. In a separate September plan, the Conservative Party proposed diesel relief through at least July 1, 2027, a GST exemption for fuel and repeal of the Clean Fuel Standard.
Global News reported that the letter also sought cuts to bureaucracy and foreign aid and cancellation of ALTO, a proposed high-speed rail project between Toronto and Quebec City. The party had previously listed similar savings proposals.
Finance Canada’s schedule suspends the federal diesel excise tax through Jan. 31, 2027. The rate is set to be 2 cents per liter in February and March, then return to 4 cents per liter on April 1. For existing excise-tax relief, the PBO estimates a $4.9 billion budgetary cost in fiscal 2026-27 and average savings of $276 per family if the savings reach households. Its estimates range from $132 for families in the lowest income fifth to $468 in the highest. The estimates do not include Poilievre’s proposed extension.
The PBO’s October outlook puts the 2026-27 deficit at $63.3 billion, or 1.8% of gross domestic product, down from its June forecast of $71.8 billion. It projects the deficit will reach $70.2 billion in 2027-28 and federal borrowing will increase by $732.9 billion over five years. The deficit-to-GDP ratio is forecast to rise in 2027-28 and 2029-30, leaving the government off track on its declining-ratio target under current plans.
The PBO also projects a $6.2 billion operating surplus in 2028-29, a measure that excludes capital spending. Parliamentary Budget Officer Annette Ryan said, “A balanced operating budget anchor should not be interpreted as a balanced fiscal position.” The October projections exclude measures to be announced when Finance Canada tables Budget 2026 on Nov. 5.
