Updated Checked by the Tax-Services.ca editorial team How we check
Law, per the Finance Canada release. Finance Canada says Bill C-38, the Canadian Fuel Affordability Act, received Royal Assent on October 29, 2026. It extends the suspension of the federal fuel excise tax through January 31, 2027. We read the release and Budget 2026 on 10 November 2026 and did not read the bill text.
The federal excise tax on fuel has been switched off since April 20, 2026. It comes back in two steps: half of the usual rate from February 1, 2027, and the full rate from April 1, 2027.
When does the federal fuel excise tax come back?
The federal fuel excise tax was suspended on April 20, 2026. The extension keeps the rates suspended until and including January 31, 2027. After that the rates return in two steps, and the second step is the standard rate.
| Period | Gasoline and unleaded aviation gasoline | Leaded aviation gasoline | Diesel and aviation fuel |
|---|---|---|---|
| April 20, 2026 to January 31, 2027 | Suspended | Suspended | Suspended |
| February 1 to March 31, 2027 | 5 cents per litre | 5.5 cents per litre | 2 cents per litre |
| From April 1, 2027 | 10 cents per litre | 11 cents per litre | 4 cents per litre |
The fuels named in the Finance release are gasoline, leaded and unleaded aviation gasoline, diesel and aviation fuel. No other fuel is listed.
What does it mean for a tank of fuel?
Finance Canada says Canadians save more than $5 every time they fill a typical 50-litre tank of gasoline while the full relief lasts. It also says gasoline prices fell by 11 cents per litre on the first day of the suspension. Budget 2026 describes the suspension as lowering pump bills by up to 10 cents per litre on regular gasoline and up to 4 cents on diesel.
Here is our own arithmetic with the published rates, for the excise tax alone. It is not a pump price, and it leaves out GST and provincial fuel taxes.
| Fill-up | Until Jan 31, 2027 | Feb 1 to Mar 31, 2027 | From Apr 1, 2027 |
|---|---|---|---|
| 50 litres of gasoline | $0.00 | $2.50 | $5.00 |
| 100 litres of diesel | $0.00 | $2.00 | $4.00 |
The figures show why the second step matters. The excise part of a 50-litre gasoline fill-up goes from nothing to $2.50 in February and to $5.00 in April. What you see at the pump also depends on crude oil prices, retailer margins and your province.
Who is affected besides drivers?
The release says the relief supports truckers and businesses in food, agriculture, housing, construction, delivery and aviation, and that it reduces costs for businesses across domestic supply chains. For a trucking or delivery business, diesel at 2 cents and then 4 cents per litre is the figure to plan around when you budget fuel for the first half of 2027.
If you track vehicle costs for a business or for self-employment, the fuel receipts you keep do not change. What changes is the amount of excise tax inside the price. The rules for claiming vehicle expenses are covered in How Income Tax for Self Employed People Works in Canada.
Does this change provincial fuel taxes or GST?
The release is about the federal excise tax on fuel. Provincial fuel taxes are separate and follow each province's own rules. For one provincial example, see Alberta Gas Tax in 2026: Current Rate and Suspension. For the federal excise system in general, see Excise Tax in Canada: What It Covers and Who Pays.
The pages we read do not say how GST applies to the changing prices, and they do not explain how the change reaches the pump. Check the receipt and your province's rules if you need that detail.
How much does the extension cost?
Finance Canada puts the additional relief from the extension at about $2.9 billion. Budget 2026 says that brings the total estimated tax relief for Canadians to $5.3 billion in 2026-27. These are government cost estimates, and they do not change what you pay at the pump on any given day.
For the whole 2027 picture in one place, including confirmed numbers, Budget 2026 proposals, CRA program changes and key dates, see Canadian Taxes in 2027: Confirmed Numbers, Proposals and Dates.
What could we not confirm?
The Royal Assent statement comes from the Finance Canada release. We did not check the Parliament or Justice Laws sites, and we did not read the bill itself. Neither page we read mentions refunds, rebates or special rules for businesses, so we say nothing about them. Budget 2026 gives the schedule in words but not in cents per litre, so the rate table above rests on the Finance release.
This is an independent information site. It provides no services, does not represent the CRA, the Department of Finance or any organization, and collects information from open sources. It does not guarantee that anything here is accurate or current, and it accepts no liability for how you use it. Check the official Finance Canada release before you rely on any figure.
Frequently asked questions
When did the federal fuel excise tax suspension start?
April 20, 2026. Finance Canada says the extension keeps the suspension in place until and including January 31, 2027.
What are the federal fuel excise rates from February 1, 2027?
From February 1 until March 31, 2027, the rates are 5 cents per litre for gasoline and unleaded aviation gasoline, 5.5 cents for leaded aviation gasoline and 2 cents for diesel and aviation fuel.
When do the full federal fuel excise rates return?
On April 1, 2027. The standard rates are 10 cents per litre for gasoline and unleaded aviation gasoline, 11 cents for leaded aviation gasoline and 4 cents for diesel and aviation fuel.
Is the fuel excise tax relief law?
Finance Canada says Bill C-38, the Canadian Fuel Affordability Act, received Royal Assent on October 29, 2026. We read that release but not the bill text.
Does this change provincial fuel taxes?
The release covers the federal excise tax only. Provincial fuel taxes follow each province's own rules.