Industry Minister Tony Clement stands beside a gas pump on Thursday before announcing plans to boost inspections for gas-pump accuracy. (Darryl Dyck/Canadian Press)

Industry Minister Tony Clement confirmed Thursday that the federal government intends to get tough with service stations that rip off customers with inaccurate gas pumps.

"This is simply unacceptable," he said at a news conference in Port Coquitlam, B.C.

News of the government's plan emerged Wednesday.

Under the proposed legislation, the federal government will increase inspections of gas pumps and substantially hike fines for service station owners whose pump readings are inaccurate.

"When Canadians pull into a station to gas up, they want to know that what's on the pump is what's in the tank," he said, adding that the new legislation will save motorists millions of dollars each year.

Federal government figures indicate six per cent of pumps fail to accurately measure the volume of fuel flowing into a vehicle's tank. Two-thirds of the time, a faulty pump benefits the retailer, amounting to $1.50 to $2 per fill-up, according to Clement.

At present, retailers face a $1,000 fine if their pumps fail to accurately measure the flow of fuel. Under the new legislation, repeat offenders could be fined up to $50,000 and minor offences could cost $10,000.

Clement is proposing mandatory inspection of gas pumps at least once a year, which he expects will reduce the number of pumps that read wrong.

Retailers would be told to correct faulty pumps and submit to new inspections. The minister did not say how soon the changes would take effect.

The proposed Fairness at the Pumps Act — which would also cover retail food scales — would authorize private inspectors to set up shop and bill retailers for checking their equipment.

"The proposed act means Canadian consumers will be protected against unfair business practices and can be more confident in everyday transactions that involve measurement," Clement said.

"As far as the implications, we'll just have to see how it rolls out," said John Skowronski, director of environmental affairs with the Canadian Petroleum Products Institute, which represents producers and service stations. He said it's important for service stations to provide accurate pump readings if they want to maintain their customer base.

Retailers already pay for maintenance programs and testing, Skowronski said in an interview with CBC News, and he doesn't expect the new legislation to have a major impact.