Toronto 
Canada is hitting pause on a key fuel tax, a move the federal government says should bring some immediate relief at the pump.
Credit: Krish Parmar/ Unsplash
Prime Minister Mark Carney announced that the federal Fuel Excise Tax on gasoline and diesel will be suspended nationwide from April 20 to September 7, 2026. The measure also applies to aviation fuels.
For drivers, the change is expected to translate into noticeable savings. Regular gasoline could drop by about 10 cents per litre, while diesel may fall by around 4 cents, reflecting the current federal excise tax rates of 10 cents per litre on gasoline and 4 cents per litre on diesel, including most aviation fuels.
The government pointed to rising global fuel prices, driven in part by conflict and supply disruptions in the Middle East, as a key reason for stepping in while longer-term energy projects continue to develop.
The federal government says lower fuel costs could ease pressure on industries like trucking, agriculture, construction, and food distribution, where transportation is a major expense.
Carney positioned the move as part of a larger effort to make life more affordable. “We’re building a stronger, more resilient, and more independent Canadian economy,” he said, adding that the government is focused on cutting taxes and lowering everyday costs for Canadians.
The statement from the Department of Finance Canada reads, ” As of April 20, 2026, federal excise tax rates on gasoline, unleaded aviation gasoline, diesel fuel, and aviation fuel would be reduced to 0 cents per litre.
“This temporary suspension would apply to gasoline, unleaded aviation gasoline, diesel fuel, and aviation fuel for which the tax became payable after April 19, 2026, such as gasoline or diesel fuel delivered by a manufacturer or producer to a purchaser, or sold by a licensed wholesaler or imported into Canada after that day.
“This temporary suspension would remain in effect until and including September 7, 2026. On September 8, 2026, the federal excise tax would return to the full rate of 10 cents per litre for gasoline and unleaded aviation gasoline, and 4 cents per litre for diesel fuel and aviation fuel, other than aviation gasoline.”
The federal government estimates that this will provide over $2.4 billion in total tax relief, easing the pressure of high fuel prices on Canadians in 2026.
