Charlottetown 
Ottawa is stretching out its fuel tax relief into next year, keeping the federal excise tax suspended through January before bringing it back in stages.
Credit: Krish Parmar/Unsplash
Finance Minister François-Philippe Champagne announced that the temporary suspension will now continue through January 31, 2027.
The tax break has been in place since April 20, 2026. It currently saves 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 and aviation fuel.
Champagne said the extension is meant to help people dealing with higher costs. “With many families still feeling the pressure of higher costs, we’re extending the federal fuel tax suspension to keep more money in Canadians’ pockets.”
What happens after January:
The tax will not return all at once.
From February 1 to March 31, 2027, you’ll see 50% of the regular excise tax rate applied. That means 5 cents per litre on gasoline, 5.5 cents on leaded aviation gasoline and 2 cents on diesel and aviation fuel.
Full rates are scheduled to return April 1, 2027.
The government estimates this extension will cost about $2.9 billion, bringing total fuel tax relief in 2026-27 to roughly $5.3 billion.
The fuel announcement comes alongside several other measures announced over last 16 months, including a lower first marginal personal income tax rate of 14%, GST relief for eligible first-time buyers of new homes and the Canada Groceries and Essentials Benefit.
That benefit can provide a family of four up to $1,890 this year, while a single person can receive up to $950.
Energy Minister Tim Hodgson said Canadians “should not have to pay for what they did not cause,” referring to international disruptions and trade tensions.
