In a statement released Sunday, Hudak said he met with Shurman to discuss his accommodation expenses.
Last week, it was revealed that Shurman, MLA for Thornhill, billed the maximum $20,719 last year after moving to Niagara-on-the-Lake.
Shurman, who also keeps an apartment in Toronto, said last week he followed all the rules in claiming the money, adding he would stop collecting house allowance while the rules were reviewed and pay for his own rental space.
On Sunday, Hudak said that although Shurman followed the rules, perhaps it was time for the rule to change.
"It is clear taxpayers hold elected officials to a higher standard and those rules need to be changed,” Hudak said.
"I believe we have a responsibility to taxpayers to operate in their best interest. As a demonstration of my commitment to this principle I have made the decision to remove Peter Shurman from his position as finance critic."