The federal government is extending its temporary suspension of fuel excise taxes through Jan. 31, 2027, as Ottawa looks to ease cost pressures tied to high energy prices, geopolitical conflict and renewed Canada-U.S. trade tensions.
Finance Minister Francois-Philippe Champagne announced Wednesday that the suspended tax rates will remain at zero through the end of January, before returning at 50% of their normal levels from Feb. 1 through March 31, 2027.
The measure applies to gasoline, aviation gasoline, diesel fuel and other aviation fuel, and is expected to provide continued relief for households as well as businesses in agriculture, trucking, food, construction and delivery.
The tax was first suspended on April 20, 2026. That move reduced the federal excise tax by 10 cents/litre on gasoline and unleaded aviation gasoline, 11 cents on leaded aviation gasoline, and four cents on diesel and aviation fuel.
The government estimates the extension will cost about $2.9 billion, bringing total fuel-tax relief in 2026-27 to about $5.3 billion.
Ottawa said the extension comes as conflicts in the Middle East and Europe continue to push up global prices, while new U.S. tariffs and Canadian countermeasures add another layer of economic uncertainty.
From Feb. 1 through March 31, the excise tax is scheduled to return at five cents/litre on gasoline and unleaded aviation gasoline, 5.5 cents on leaded aviation gasoline and two cents on diesel and aviation fuel.
Full rates are scheduled to return April 1, 2027.
