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Canada Extends Fuel Excise Tax Relief Through March 2027, Treasury Board Says

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Canada will extend federal fuel excise tax relief through March 2027, with the measure expected to deliver CA$5.3 billion ($3.8 billion) in total relief, the Treasury Board of Canada Secretariat said Tuesday.

The government will suspend federal fuel excise taxes on gasoline, diesel and aviation fuels through Jan. 31, 2027, to ease costs for families and businesses.

From Feb. 1 through March 31, 2027, Canada will apply half the regular excise tax rates, setting gasoline at 5 Canadian cents per liter and diesel at 2 Canadian cents per liter.

The temporary suspension began April 20, 2026, cutting gasoline and unleaded aviation gasoline taxes by 10 Canadian cents per liter, leaded aviation gasoline by 11 Canadian cents per liter, and diesel by 4 Canadian cents per liter.

The government expects the extension to add about CA$2.9 billion to its fiscal impact, bringing estimated total fuel tax relief to CA$5.3 billion in 2026-27.

The government said the tax measures will support truckers and businesses in food, agriculture, housing, construction and delivery as global conflicts and tariffs fuel economic uncertainty.

Federal fuel excise tax rates will return to their full levels on April 1, 2027, reaching 10 Canadian cents per liter for gasoline and unleaded aviation gasoline.

The full rate for leaded aviation gasoline will return to 11 Canadian cents per liter on April 1, 2027, while diesel and aviation fuel will return to 4 Canadian cents per liter.

The government canceled the federal consumer carbon price effective April 1, 2025, which it said lowered gasoline costs by up to 18 Canadian cents per liter in most provinces and territories.

"In an evolving global landscape, Canada's government is focused on what we can control. We're extending the pause on the federal fuel tax to provide immediate support to Canadians amid global economic change," said Tom Osborne, Parliamentary Secretary to the President of the Treasury Board.

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