Ontario Gas Tax Cut 407 Tolls – Permanent Changes and Savings

The Ontario government has announced permanent measures to reduce driving costs, combining a fixed gas tax reduction with the elimination of tolls on a major highway section. Effective June 1, 2025, the province will maintain the gas tax at 9 cents per litre while removing tolls from the eastern stretch of Highway 407 ETR, pending legislative approval.

Premier Doug Ford’s government detailed these changes in the 2025 provincial budget released May 15, 2025, positioning them as immediate relief for families facing economic pressures. The gas tax measure makes permanent a temporary reduction first introduced in July 2022, while the toll elimination fulfills a 2025 election campaign promise.

Does the Ontario Gas Tax Cut Affect 407 Tolls?

The two measures operate independently. The gas tax reduction applies to fuel purchases at all retail stations, while the 407 toll changes affect only the specific highway section drivers use. Only the provincially owned eastern segment becomes toll-free; the majority of the highway remains under private operation with rates unchanged.

• Permanent Reduction: The gas tax cut becomes permanent at 9 cents per litre, ending the cycle of temporary extensions.
• Household Savings: Families save an average of $115 annually on fuel costs.
• Commuter Benefits: Daily 407 East users could retain up to $7,200 yearly from toll elimination.
• Limited Geographic Scope: Only the provincially owned eastern stretch becomes toll-free; the majority of Highway 407 remains under private operation.
• Revenue Impact: The province projected $72 million in annual revenue from the eastern tolls prior to elimination.
• Legislative Framework: Both measures require passage of legislation introduced with the 2025 budget.
• Historical Context: The gas tax reduction originated as a temporary measure in July 2022.

Details of the Ontario Gas Tax Cut

From Temporary to Permanent

The reduction fixes the provincial gas tax at 9 cents per litre, eliminating the need for biannual legislative extensions. This rate applies to gasoline and fuel purchases across Ontario. The measure builds upon previous cost-saving initiatives such as eliminating licence plate renewal fees and freezing driver’s licence fees.

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Cumulative Financial Impact

Since its initial introduction in July 2022, the tax reduction has saved Ontario households an average of $115 annually. Province-wide, the measure has retained approximately $1.7 billion in consumer spending that would otherwise have gone to tax revenue.

Current 407 ETR Toll Rates and Policies

Eastern Section Toll Elimination

The province will cease collecting tolls on the publicly owned segment stretching from Brock Road to Highway 35/115 in Durham Region. This section represents the largest tolled public highway segment in the province. Daily users of this corridor could save up to $7,200 annually.

Private Highway Operations

The majority of Highway 407 remains under private lease agreements. These sections continue operating with tolls unaffected by the provincial announcement. No buyback of the full route has occurred despite previous considerations regarding construction costs and gridlock.

Traffic Impact Projections

The removal of eastern tolls is expected to reduce gridlock on surrounding regional roads as traffic patterns adjust to the toll-free route. The provincially owned section connects Durham Region to the broader highway network without per-kilometre charges.

Why Ontario Implemented the Gas Tax Cut

Economic Relief Objectives

The government positioned both measures as relief for “hard-working families and businesses” facing rising expenses. The announcements specifically reference economic pressures including U.S. tariffs and broader inflationary trends affecting household budgets.

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Election Commitment Fulfillment

The toll elimination fulfills a 2025 election promise by Premier Doug Ford’s Progressive Conservatives. The policy aligns with a broader prohibition on new public road tolls, ensuring no publicly owned highways remain tolled in Ontario.

Timeline of Ontario Gas Tax and 407 Policy Changes

1. July 2022 – Ontario introduces temporary gas tax reduction Global News
2. 2022-2024 – Multiple extensions of temporary gas tax cuts maintain reduced rates Official Announcement
3. May 13, 2025 – Government announces permanent gas tax cut and 407 toll elimination Ontario Newsroom
4. May 15, 2025 – 2025 provincial budget released detailing measures Ontario Ministry of Finance
5. June 1, 2025 – Scheduled effective date for both measures pending legislation Ford MPP

What is Confirmed vs. What Remains Unclear

Economic Context and Driver Impact

The measures arrive amid sustained inflationary pressure and specific economic challenges including U.S. tariff impacts on household budgets. By fixing the gas tax rate and eliminating the eastern tolls simultaneously, the government aims to reduce variable transportation costs for commuters in the Greater Toronto Area and Durham Region.

The $1.7 billion in retained consumer spending since 2022 represents significant economic stimulus, while the projected $72 million in forgone toll revenue reflects a prioritization of household liquidity over direct infrastructure funding. Daily commuters utilizing the eastern corridor stand to benefit from both reduced fuel costs and the elimination of per-kilometre charges, potentially altering route selection across the regional highway network.

Official Announcements and Sources

Ontario is permanently cutting the gas tax and taking tolls off Highway 407 East.

— Ontario Government Announcement, May 2025

Not one single publicly owned highway left in Ontario with tolls.

— Premier Doug Ford, 2025 Election Promise Fulfillment

Summary

Ontario drivers will see permanent fuel tax reduction and toll elimination on the eastern 407 starting June 2025, pending legislative approval. While the 9-cent gas tax cut applies universally, toll relief remains limited to the provincially owned Brock Road to Highway 35/115 corridor, with privately operated highway sections continuing to charge users. These measures fulfill campaign commitments while removing approximately $72 million in annual provincial revenue from tolls.

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