The federal fuel excise tax suspension, April 2026 to April 2027
The 10¢-a-litre federal excise tax on gasoline (4¢ on diesel) is suspended until January 31, 2027, then returns at half rate before going back to normal on April 1, 2027.
The federal government suspended its fuel excise tax on April 20, 2026 to ease fuel prices, originally until Labour Day. In September it extended the suspension into 2027 and introduced Bill C-38, the Canadian Fuel Affordability Act, to put the extension into law.
The timeline
| Period | Federal excise tax |
|---|---|
| Before April 20, 2026 | Full rate |
| April 20, 2026 – January 31, 2027 | Suspended (0¢) |
| February 1 – March 31, 2027 | 50% of the regular rate |
| From April 1, 2027 | Full rate |
Rates by fuel
| Fuel | Regular | Feb–Mar 2027 |
|---|---|---|
| Gasoline and unleaded aviation gasoline | 10¢/L | 5¢/L |
| Leaded aviation gasoline | 11¢/L | 5.5¢/L |
| Diesel and aviation fuel | 4¢/L | 2¢/L |
What it means for your business
- 01It's built into the pump price. The excise tax is paid by the manufacturer or wholesaler and embedded in the price you pay, so there's nothing to claim or record separately. Your fuel receipts simply come in lower.
- 02Budget for the step-up. Fuel costs rise by about half the excise tax on February 1, 2027 and by the rest on April 1, 2027. If fuel is a large expense (trades, delivery, agriculture), build that into your 2027 cash flow and pricing.
- 03Diesel saves less per litre. The diesel rate is 4¢, so fleets running diesel see a smaller per-litre saving than gasoline vehicles.
Finance Canada estimates the full suspension saves more than $5 on a typical 50-litre fill-up of gasoline, and about $5.3 billion in total relief in 2026-27.
This summary is general information only. The extension depends on Bill C-38 passing as introduced; check Finance Canada for the current status.
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