Ontario is eliminating licence plate renewal fees in the name of saving drivers money, though Premier Doug Ford sounded less certain Tuesday about fulfilling a promise to cut gas prices.
Effective March 13, Ontario will scrap the fee as well as the requirement for drivers to have a licence plate sticker, Ford announced. The government is set to introduce red tape legislation that will also allow the province to refund any licence plate renewal fees that drivers have paid since March 2020.
"We know the rising cost of living has made many things more expensive, and can make it harder for families to make ends meet," Ford said Tuesday.
"After two years of the pandemic, people don't need any more hurdles in the way of getting back on their feet and back to normal."
Vehicle owners should receive cheques in the mail starting at the end of March. They will still have to renew their plates every one or two years to ensure their insurance is still valid and pay any outstanding tolls or fines.
The measure will save drivers $120 a year – $60 a year for people in northern Ontario – but will cost the province $1.1 billion a year in lost revenue.
Ford said it's one billion dollars that is going back into the economy, and will still benefit the province because people will have more money to spend.
"Put more money into your pockets, more money into businesses, that's going to create a broader tax base, more people are employed," he said.
The premier said he doesn't want to raise taxes, but Treasury Board President Prabmeet Sarkaria also said there will be no cuts to services to make up for the loss of revenue.
"I think like any other program that the government puts forward, we'll examine all fiscal implications of the program, as we have been internally," Sarkaria said after question period.
NDP Leader Andrea Horwath said she was not opposed to the elimination of the renewal fees, and Liberal House Leader John Fraser said waiving the fees isn't enough to address affordability.
Green party leader Mike Schreiner said the announcement is just an election gimmick – the province heads to the polls in June – and the other opposition leaders are "playing footsie" with it.
"That is a billion-dollar election boondoggle that means less money for health care, less money for education, less money for affordable housing," he said.
The premier sounded less certain, however, about another affordability promise, saying he will "look into" cutting gas prices.
Ford promised during the 2018 election to cut gas prices by 10 cents, with 4.3 cents coming from ending the previous Liberal government's cap-and-trade system.
The Progressive Conservatives did end cap and trade, but that meant the federal carbon tax backstop kicked in, negating savings at the pump. Ford's government tried fighting it in court, but lost.
The provincial fuel tax rate remains unchanged from 2018, but Ford said as recently as November that he would fulfil the rest of the promise.
"We're going to commit to making sure that we cut 5.7 cents off before the next budget," he had said.
- with files from Holly McKenzie-Sutter.
This report by The Canadian Press was first published Feb. 22, 2022.
Allison Jones, The Canadian Press
