OTTAWA — The federal government is extending its temporary suspension of fuel excise taxes until the end of January, with reduced rates to remain in place for another two months before returning to normal in April.
Bill C-38, the Canadian Fuel Affordability Act, received royal assent Oct. 29, extending the suspension of the federal fuel excise tax through Jan. 31, 2027.
The measure means motorists will continue saving 10 cents per litre on gasoline and unleaded aviation gasoline. The suspended tax amounts to 11 cents per litre on leaded aviation gasoline and four cents per litre on diesel and aviation fuel.
The Department of Finance says the measure saves more than $5 on a typical 50-litre gasoline fill-up while the full suspension remains in effect.
Beginning Feb. 1, the taxes will return at half their regular rates, with gasoline and unleaded aviation gasoline taxed at five cents per litre, leaded aviation gasoline at 5.5 cents and diesel and aviation fuel at two cents.
Full rates are scheduled to return April 1 at 10 cents per litre for gasoline and unleaded aviation gasoline, 11 cents for leaded aviation gasoline and four cents for diesel and aviation fuel.
The government says extending the measure will provide an additional $2.9 billion in fuel tax relief, bringing estimated savings to $5.3 billion in 2026-27.
The temporary suspension was introduced April 20 amid higher fuel prices linked to global instability and supply disruptions in the Middle East.
The government says the relief is intended to reduce costs both for consumers and for businesses transporting food, building materials and other goods across the country.
“By extending this tax relief, we are helping Canadians keep more of their hard-earned money, lowering transportation costs for businesses, and helping protect our economy from global disruptions,” Finance Minister François-Philippe Champagne said.
The government says gasoline prices fell 11 cents per litre on the first day the original suspension took effect.
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