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Canada extends fuel tax suspension into 2027
Break for diesel, gasoline and aircraft fuel will remain in place through Jan. 31 and then be halved for 2 months
Tractor-trailers on the Blue Water Bridge, connecting Port Huron, Mich., to Sarnia, Ontario. (Brett Gundlock/Bloomberg)
Key Takeaways:
- Prime Minister Mark Carney’s government will extend Canada’s fuel excise tax suspension through Jan. 31, 2027, amid surging energy costs.
- The measure covers gasoline, diesel and aircraft fuel and is expected to cost the federal treasury C$2.4 billion.
- The tax will return at half its full amount Feb. 1 through March 31, then be fully restored April 1.
Canadian Prime Minister Mark Carney’s government will extend the suspension of a fuel excise tax to Jan. 31, 2027, a move that comes amid surging energy costs fueled by the war in Iran.
The tax will then be halved from Feb. 1 to March 31, and return to its full amount on April 1, Finance Minister Francois-Philippe Champagne said during a news conference in Ottawa, Ontario.
The tax break does include diesel.
The government first announced the tax break in April, lowering gasoline prices by about 10 Canadian cents per liter and diesel by about 4 Canadian cents. It also applies to aircraft fuel. The measure was set to expire Sept. 7 and is expected to cost the federal treasury about C$2.4 billion ($1.7 billion). Canadian gasoline carries an additional 5% goods and services tax.
Crude oil prices are about 30% higher than they were before the war in Iran started earlier this year as the conflict curtailed maritime traffic in the Strait of Hormuz, a key waterway through which about a fifth of the world’s oil and liquefied natural gas previously passed.
