Federal fuel excise tax suspension extended to Jan. 31, 2027; half-rates planned for early 2027
The federal government is extending its temporary suspension of the federal fuel excise tax on gasoline, aviation gasoline (leaded and unleaded), diesel fuel and other aviation fuel until Jan. 31, 2027, according to the Treasury Board of Canada Secretariat. The government also said it plans to charge half the regular excise tax rate from Feb. 1 to March 31, 2027, before returning to full rates on April 1, 2027.
The change affects the federal per-litre excise tax applied to these fuels across Canada, including in Northeast Ontario. The Treasury Board described the measure as part of the federal government’s approach to fuel costs.
The Treasury Board said the temporary suspension first took effect April 20, 2026. The regular federal excise tax rates that were suspended are 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.
Under the schedule described by the Treasury Board, the federal excise tax is set to remain suspended (at zero) until and including Jan. 31, 2027.
From Feb. 1 to March 31, 2027, the Treasury Board said the federal excise tax rates are set to 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, the Treasury Board said the federal excise tax rates are set to 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.
In its release, the Treasury Board said that when the suspension began on April 20, 2026, gasoline prices declined by 11 cents per litre on the first day of implementation.
The Treasury Board also provided cost estimates, saying the extension is expected to have an additional fiscal impact of about $2.9 billion in reduced federal excise-tax revenue. It also said this would bring the estimated total reduction in federal fuel excise-tax revenue to $5.3 billion for 2026–27.