OTTAWA - 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.
François-Philippe Champagne, Minister of Finance and National Revenue, announced that the government is extending the temporary suspension of the federal fuel excise tax 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.
“With many families still feeling the pressure of higher costs, we’re extending the federal fuel tax suspension to keep more money in Canadians’ pockets. This will provide meaningful relief for families and businesses and help make everyday life more affordable.” Champagne said in a statement.
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.
“Canadians should not have to pay for what they did not cause – whether it is disruption in the Middle East or an unjustified trade war. An affordable, comfortable life is a priority for our government, and by extending the suspension of the fuel excise tax, we are ensuring more money stays in Canadians’ pockets, and standing with every Canadian family as we build a stronger, more resilient Canada.” said Tim Hodgson, Minister of Energy and Natural Resources.
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.
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.