Temporarily suspending the federal fuel excise tax
Backgrounder
The Government of Canada intends to introduce legislative amendments to the Excise Tax Act to temporarily suspend the application of the federal fuel excise tax on gasoline, diesel fuel, and aviation fuels by setting their rates to 0 cents per litre, effective April 20, 2026 until Labour Day, September 7, 2026 (inclusive). This measure is intended to address fuel price pressures caused by global oil disruptions related to the Middle East conflict.
Details on the temporary suspension of the federal fuel excise tax, including the applicable rates as well as scope and timing of application, can be found below.
Temporary Suspension of Federal Fuel Excise Tax Rates on Gasoline, Diesel, and Aviation Fuels
The federal excise tax currently applies at a rate of 10 cents per litre on gasoline and unleaded aviation gasoline, and 4 cents per litre on diesel fuel and aviation fuel, other than aviation gasoline. The tax is typically payable by the manufacturer or wholesaler at delivery to a retailer and is embedded in the price of fuel, for example at the pump. Heating oil is exempt from this tax and there is no federal excise tax on natural gas or propane. Provincial governments also collect their own gasoline and diesel taxes.
As of April 20, 2026, federal excise tax rates on gasoline, unleaded aviation gasoline, diesel fuel, and aviation fuel would be reduced to 0 cents per litre. This temporary suspension would apply to gasoline, unleaded aviation gasoline, diesel fuel, and aviation fuel for which the tax became payable after April 19, 2026, such as gasoline or diesel fuel delivered by a manufacturer or producer to a purchaser, or sold by a licensed wholesaler or imported into Canada after that day. This temporary suspension would remain in effect until and including September 7, 2026. On September 8, 2026, the federal excise tax would return to the full rate of 10 cents per litre for gasoline and unleaded aviation gasoline, and 4 cents per litre for diesel fuel and aviation fuel, other than aviation gasoline.
It is estimated this will provide over $2.4 billion in total tax relief that will ease the pressure of high fuel prices on Canadians in 2026.