Minister Champagne introduces legislation to extend the federal fuel excise tax relief for Canadians

September 22, 2026 – Ottawa, Ontario – Department of Finance Canada

In a rapidly changing world, Canada’s government is focused on what we can control: making life more affordable for Canadians, strengthening our economic resilience, and building a stronger and more independent country.

Yesterday, the Honourable François-Philippe Champagne, Minister of Finance and National

Revenue, introduced Bill C-38, the Canadian Fuel Affordability Act. The legislation responds to higher fuel costs caused by global instability and ongoing supply disruptions in the Middle East, which are putting pressure on energy markets around the world.

These higher costs are felt across the economy, from Canadians driving to work or running errands to businesses transporting food, building materials, and other essential goods across the country. Extending the relief will help lower everyday costs for Canadians while supporting truckers and businesses in the food, agriculture, housing, construction, delivery, and aviation sectors.

In response to these pressures, Bill C-38 will extend the temporary suspension of the federal fuel excise tax until January 31, 2027. For Canadians, that means continuing to save more than $5 every time they fill a typical 50-litre tank of gasoline while the full relief remains in place. Then, the regular rates will be reduced by 50% until March 31, 2027.

First introduced in spring 2026 to provide immediate relief at the pump, the measure will continue to apply to gasoline, aviation gasoline (leaded and unleaded), diesel fuel, and aviation fuel. The extension is expected to provide an additional $2.9 billion in fuel tax relief, bringing total estimated tax relief for Canadians to $5.3 billion in 2026-27.

By lowering costs at the pump and across Canadian supply chains, the government is helping Canadians keep more of their hard-earned money while protecting the economy from pressures beyond our borders.

Quotes

“Global conflict and supply disruptions are driving up fuel prices around the world, and Canadians are feeling the impact when they drive to work, take their kids to activities, or transport goods across the country. By extending the federal fuel tax suspension, we’re saving Canadians $5 on a typical 50-litre fill-up while helping farmers, truckers, builders, and businesses manage higher costs.”

- The Honourable François-Philippe Champagne, Minister of Finance and National Revenue

Quick facts

• April 20, 2026, the federal fuel excise tax was temporarily suspended, saving Canadians 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 fuel and aviation fuel.

• Gasoline prices declined by 11 cents per litre on the first day of implementation, delivering immediate relief to consumers.

• The extension will keep the federal excise tax rates suspended until and including January 31, 2027. From February 1, 2027 until and including March 31, 2027, 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, federal fuel excise tax 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 is also taking broader action to make life more affordable, including through the Canada Groceries and Essentials Benefit, cutting income taxes for 22 million Canadians, the cancellation of the consumer carbon tax, and GST relief for first-time buyers of new homes.