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Canada's Federal Fuel Excise Tax: A Temporary Suspension in 2026

As of August 18, 2026, the federal fuel excise tax in Canada is temporarily suspended. The Government of Canada announced on April 14, 2026, a temporary suspension of the federal excise tax on certain types of fuel, effective from April 20, 2026, until September 7, 2026 (inclusive), which is Labour Day ²³⁴⁸. This measure aims to provide relief to Canadians facing high living costs ⁹.

What Does the Suspension Entail?

The temporary suspension sets the federal excise tax rate to zero cents per litre for the affected fuels ²³⁴. This means that for the specified period, the federal component of the fuel excise tax, which would normally be applied, is not being collected.

Affected Fuel Types

The temporary suspension applies to the following types of fuel ²³⁷:

• Unleaded gasoline
• Unleaded aviation gasoline
• Diesel fuel
• Aviation fuel

Background on Federal Fuel Excise Tax Rates

Prior to this suspension, the federal excise tax rates on petroleum products were as follows ⁵:

• Regular gasoline and unleaded gasoline: $0.0036 per litre
• Premium leaded gasoline and premium unleaded gasoline: $0.0037 per litre
• Diesel fuel: $0.00302 per litre

It is important to note that these rates are distinct from provincial fuel taxes and the Goods and Services Tax (GST) that are also applied to fuel in Canada ⁶.

Impact and Duration

The temporary suspension is a short-term measure intended to provide a "small tax break at the pump" for Canadians ⁸. It is scheduled to conclude on September 7, 2026. After this date, unless further announcements are made, the federal excise tax rates are expected to revert to their previous levels.

Official Announcements and Legislative Amendments

The Government of Canada has indicated its intent to introduce draft legislative amendments to the Excise Tax Act to implement this temporary suspension ⁴. This initiative is part of broader efforts to address economic pressures on consumers ⁹. Notifications regarding these changes have been issued by various government bodies, including the Canada Revenue Agency (CRA) and the Canada Border Services Agency (CBSA) ¹³.