The Government of Canada Extends Federal Fuel Excise Tax Relief on Gasoline, Diesel, and Aviation Fuels

September 16, 2026

The world is changing rapidly. The United States is imposing new tariffs on Canada, designed to hurt and divide us. At the same time, conflicts in Europe and the Middle East are driving up prices around the world. In response, Canada’s government is focused on what we can control: building a stronger, more independent, and more affordable country.

As Canadians continue to face economic uncertainty and rising costs, affordability remains top of mind for families and businesses across the country. To help Canadians facing rising fuel costs, the Government of Canada introduced a temporary suspension of the federal fuel excise tax on gasoline, aviation gasoline (leaded and unleaded), diesel fuel, and other aviation fuel earlier this year.

The temporary suspension of the federal fuel excise tax has been extended until January 31, 2027, and applying 50% of the regular excise tax rate from February 1 through March 31, 2027. This will bring down everyday costs for Canadians, including truckers and businesses in the food, agriculture, housing, construction, and delivery sectors.

On April 20, 2026, the federal fuel excise tax was temporarily suspended, saving Canadians 10 cents per litre on gasoline and unleaded aviation gasoline, 11 cents per litre on leaded aviation gasoline, and 4 cents per litre on diesel and aviation fuel.

As Canada continues to build a stronger, more resilient, and more independent economy, the government is taking practical steps to reduce costs today while investing in long-term prosperity. Extending fuel tax relief is one of the measures helping families, workers, and businesses navigate global economic uncertainty.

The government is also taking broader action to make life more affordable, including through the Canada Groceries and Essentials Benefit, cutting income taxes for 22 million Canadians, the cancellation of the consumer carbon tax, and GST relief for first-time buyers of new homes. Together, these measures are helping Canadians keep more of their hard-earned money.

Quick Facts

• When the temporary suspension of the federal fuel excise tax was first introduced on April 20, 2026, gasoline prices declined by 11 cents per litre on the first day of implementation, delivering immediate relief to consumers.
• The estimated additional fiscal impact of the extension of the suspension of the federal fuel excise tax is about $2.9 billion. This will mean $5.3 billion in estimated total tax relief for Canadians in 2026-27.
• The extension will keep the federal excise tax rates suspended until and including January 31, 2027. From February 1, 2027 until March 31, 2027, federal fuel excise tax rates would be 5 cents per litre for gasoline and unleaded aviation gasoline, 5.5 cents per litre for leaded aviation gasoline, and 2 cents per litre for diesel fuel and aviation fuel.
• Effective April 1, 2027, federal fuel excise tax rates would return to their full levels of 10 cents per litre for gasoline and unleaded aviation gasoline, 11 cents per litre for leaded aviation gasoline, and 4 cents per litre for diesel fuel and aviation fuel.
• Today’s announcement builds on major affordability initiatives to lower costs for Canadians, including:
  • Cutting taxes for 22 million middle-class Canadians by lowering the first marginal personal income tax rate from 15% to 14% as of July 1, 2025, providing tax relief of up to $420 a year per person, or up to $840 a year for two-income families.
  • Eliminating the Goods and Services Tax (GST) for first-time homebuyers on new homes up to $1 million and reducing the GST for first-time home buyers on new homes between $1 million and $1.5 million, to immediately make the goal of home ownership a reality for more Canadians, especially young families.
  • Cancelling the federal consumer carbon price effective April 1, 2025, directly helping Canadians save money at the pump. The government also removed the requirement for provinces and territories to have a consumer-facing carbon price as of that date. This has helped reduce gas prices in most provinces and territories by up to 18 cents per litre in comparison to 2024-25, lowering headline inflation.
  • Launching the new Canada Groceries and Essentials Benefit, which provides a family of four up to $1,890 this year, and about $1,400 a year for the next four years; and a single person up to $950 this year, and about $700 a year for the next four years. The benefit will provide additional, significant support for more than 12 million Canadians.
  • Making the National School Food Program permanent, providing school meals for up to 400,000 children each year, saving participating families with two children in school an estimated $800 annually on groceries.
  • Introducing Automatic Federal Benefits, starting in the 2026 tax year, to ensure up to 5.5 million low-income Canadians automatically receive the benefits they qualify for by the 2028 tax year, including the Canada Groceries and Essentials Benefit and the Canada Child Benefit.
  • Lowering costs and strengthening competition in essential services, including ambitious pro-competition measures in the telecom and financial sectors to reduce prices, make it easier for Canadians to switch providers, and lower banking and service fees.

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