Federal government extends fuel excise tax suspension into 2027
Providing ongoing operational relief for commercial motor carriers, agriculture, and delivery sectors, the Canadian government extends its federal fuel excise tax suspension into 2027.
The Minister of Finance and National Revenue, François-Philippe Champagne, announced an extension of the temporary suspension of the federal fuel excise tax through January 31, 2027. Originally enacted in April 2026, the relief program will transition to a 50 percent reduced tax rate from February 1 through March 31, 2027, before returning to standard statutory rates on April 1, 2027.
For commercial fleet operators, freight carriers, and logistics providers, the extended suspension maintains cost savings at the pump of 4 cents per liter on diesel fuel and aviation fuel, and 10 cents per liter on gasoline.
“With many families still feeling the pressure of higher costs, we’re extending the federal fuel tax suspension to keep more money in Canadians’ pockets. This will provide meaningful relief for families and businesses and help make everyday life more affordable,” stated the Honourable François-Philippe Champagne, Minister of Finance and National Revenue.
The legislative extension addresses ongoing global economic volatility and trade tensions impacting business input costs. The additional fiscal impact of extending the fuel tax relief is estimated at $2.9 billion, bringing total estimated tax relief for commercial and retail consumers to $5.3 billion for the 2026–27 fiscal period.
“Canadians should not have to pay for what they did not cause – whether it is disruption in the Middle East or an unjustified trade war,” added the Honourable Tim Hodgson, Minister of Energy and Natural Resources. “By extending the suspension of the fuel excise tax, we are ensuring more money stays in Canadians’ pockets, and standing with every Canadian family as we build a stronger, more resilient Canada.”
During the phased step-up period running from February 1 to March 31, 2027, federal excise tax rates will be set at 2 cents per liter for diesel and 5 cents per liter for gasoline, offering commercial transport fleets a predictable cost curve prior to the full reinstatement of 4-cent and 10-cent excise rates in April 2027.
