Ontario planning to eliminate auto propane tax following CPA advocacy

Major Win for Cleaner, More Affordable Transportation

OTTAWA, ON, May 16, 2025 – The Canadian Propane Association (CPA) welcomes the Ontario government’s proposed legislation to eliminate the fuel tax on auto propane, announced in the 2025 Ontario Budget. This long-standing recommendation from the CPA marks a critical step toward cleaner, more affordable transportation in Ontario.

Transportation accounts for 32% of Ontario’s total greenhouse gas (GHG) emissions. Auto propane, a lower-emission alternative to gasoline and diesel, offers immediate and measurable environmental benefits. It reduces greenhouse gases by up to 26%, cuts harmful particulates by up to 98%, and offers 30–40% savings on fuel and maintenance.

“This is a significant win for not only Ontario’s propane sector but small businesses and fleets seeking cleaner, more affordable transportation solutions,” said CPA President and CEO Shannon Watt. “Removing the tax on auto propane levels the playing field and supports practical climate action.”

Under Ontario’s Gasoline Tax Act, propane is currently taxed at 4.3 cents per litre—unlike gasoline and diesel, which saw tax reductions. The CPA consistently advocated for fair treatment of propane users, as the tax discrepancy placed this cleaner fuel at a competitive disadvantage.

The Ontario government acknowledged the CPA’s advocacy in the 2025 Budget, including a direct quote in the Budget document from Watt: “The Canadian Propane Association (CPA) has requested the elimination of the tax on auto propane. This change would reduce burden on the propane industry, particularly small businesses that sell and operate using propane.”

The CPA commends the government for this evidence-based, forward-looking legislation and is ready to support further efforts to advance affordable, reliable and lower-emission propane solutions across Ontario.