Canada's Ontario to extend gas, fuel tax cut for a year

TORONTO (Reuters) - The Ontario government said on Sunday it will extend a fuel and gas tax cut first introduced last spring by another year to help residents cope with high inflation and economic uncertainty.

The initial six-month cut went into effect in July and legislation to extend it to December 2023 will be introduced on Monday in the government's fall economic update.

"At a time when inflation has reached the highest levels in over four decades, we know families are feeling the pressure from rising prices on everything from gas to groceries," Ontario Premier Doug Ford said in a statement, adding the gas tax cut extension is aimed at "providing real relief.”

The extension would keep the tax rate on gasoline at 9 Canadian cents per litre from 14.7 cents per litre and the fuel tax at 9 cents per litre from 14.3 cents per litre.

Some forecasters expect Canada's economy to dip into recession next year along with a downturn in global activity.

The Bank of Canada has raised interest rates aggressively this year to tackle persistent inflation, which has eased slightly from a peak of 8.1%.

(Writing by Amran Abocar; Editing by Bill Berkrot)