Legislation passes to extend the federal fuel excise tax relief for Canadians

The following news release was issued by the Department of Finance Canada.

October 29, 2026 – Ottawa, Ontario – Department of Finance Canada

Canadians are navigating a rapidly changing and increasingly fragmented world. In response, the government is focused on what we can control: easing cost-of-living pressures, strengthening the economy, and building a more self-reliant Canada.

Today, Bill C-38, the Canadian Fuel Affordability Act, received Royal Assent. This legislation will help make life more affordable for Canadians facing higher fuel costs as global instability and ongoing supply disruptions in the Middle East put pressure on energy markets around the world.

Higher fuel costs are being felt across the economy, affecting Canadian families as they commute or run errands, as well as businesses moving food, building materials, and other essentials nationwide. Extending this relief will help lower everyday costs while supporting truckers and businesses in the food, agriculture, housing, construction, delivery, and aviation sectors.

Bill C-38 extends the temporary suspension of the federal fuel excise tax until January 31, 2027. As a result, Canadians will continue to save more than $5 every time they fill a typical 50-litre tank of gasoline while the full relief remains in place. Beginning February 1, 2027, the federal fuel excise tax rates will be restored at 50 per cent of their regular levels until March 31, 2027, providing continued relief for Canadians during the transition period.

Introduced in spring 2026 to provide immediate relief at the pump, the measure applies to gasoline, leaded and unleaded aviation gasoline, diesel, and aviation fuel. Its extension is expected to deliver an additional $2.9 billion in relief, increasing the total estimated fuel tax savings for Canadians to $5.3 billion in 2026–27.

By providing continued relief at the pump, this measure will help Canadians keep more of their hard-earned money, reduce costs for businesses across domestic supply chains, and help shield Canada’s economy from global disruptions.

Quotes

“By extending this tax relief, we are helping Canadians keep more of their hard-earned money, lowering transportation costs for businesses, and helping protect our economy from global disruptions. This is about making life more affordable and keeping our economy moving in a more uncertain world.”

– The Honourable François-Philippe Champagne, Minister of Finance and National Revenue

Quick facts

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 fuel and aviation fuel.

Gasoline prices declined by 11 cents per litre on the first day of implementation, delivering immediate relief to consumers.

The extension will keep the federal excise tax rates suspended until and including January 31, 2027. From February 1, 2027, until and including March 31, 2027, federal fuel excise tax rates will 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 will 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.

The government has also taken 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.

Contacts

Media may contact:

John Fragos
Press Secretary
Office of the Minister of Finance and National Revenue
[email protected]

Media Relations
Department of Finance Canada
[email protected]
613-369-4000

General enquiries
Phone: 1-833-712-2292
TTY: 613-369-3230
E-mail: [email protected]

Source: Department of Finance Canada