Ottawa extends suspension of federal fuel excise tax through Jan. 31, 2027; half-rates planned for Feb.–March 2027
The federal government will extend the 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, and will apply 50% of the regular excise tax rate from Feb. 1, 2027, through March 31, 2027. The announcement was made Sept. 8, 2026, in Halifax, Nova Scotia.
For residents and businesses in Clarington who buy these fuels, the change affects the federal excise tax rates applied per litre and sets out when those rates are scheduled to return. The government’s release includes per-litre amounts for the suspension period, the planned half-rate period, and the return to full rates.
The suspension first took effect April 20, 2026. At that time, the federal fuel excise tax was suspended, saving 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.
Under the extension, the excise tax rate will remain at zero through Jan. 31, 2027.
From Feb. 1, 2027, to March 31, 2027, the federal fuel excise tax rates would 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 rates would 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.
The government said gasoline prices declined by 11 cents per litre on April 20, 2026, the first day of the suspension.
The government estimated the added fiscal impact of extending the suspension at about $2.9 billion, and estimated total tax relief in 2026–2027 at about $5.3 billion.
Immigration, Refugees and Citizenship Minister Lena Metlege Diab and Finance and National Revenue Minister François-Philippe Champagne said the extension is intended to address affordability. Champagne said the government is extending the suspension to “keep more money in Canadians’ pockets.”