The Canadian government plans a temporary suspension of federal fuel excise taxes from 20 April to 7 September 2026, cutting rates to zero to ease price pressures caused by global oil disruptions, with an estimated CAD 2.4 billion in relief for consumers.
Canada’s government announced, on 14 April 2026, that it 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 20 April 2026, until Labour Day, 7 September 2026.
This measure is intended to address fuel price pressures caused by global oil disruptions related to the Middle East conflict.
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 20 April 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 19 April 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 7 September 2026.
On 8 September 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 that this will provide over CAD 2.4 billion in total tax relief that will ease the pressure of high fuel prices on Canadians in 2026.
