Finance Minister François-Philippe Champagne is set to reveal an extension of the federal excise tax break on gasoline and diesel until early 2027, as reported by sources familiar with the matter speaking to Radio-Canada. The announcement is expected to take place in Ottawa and forms part of the government’s strategy to assist Canadian families and businesses in coping with the escalating cost of living.
Previously, the 10-cent federal excise tax on a liter of gas and four cents per liter on diesel was temporarily lifted by Carney until Labor Day on September 7. Carney justified this move, estimated to cost around $2.4 billion, as a transitional measure to help Canadians navigate “short-term pressures” stemming from a surge in global oil prices triggered by the U.S.’s conflict with Iran.
In 2022, the Ford administration introduced a temporary fuel tax exemption, reducing taxes on a liter of gas by 5.7 cents and on a liter of diesel by 5.3 cents. This action aligned the provincial tax rates on gas and diesel to nine cents per liter, resulting in an annual household savings of approximately $115, as outlined in the 2026 provincial budget. The previous year, this tax reduction was made permanent.
Since the initial announcement of the fuel excise tax holiday by Carney, the federal Conservatives have consistently advocated for its extension. On Wednesday, Conservative Leader Pierre Poilievre renewed this call, urging the removal of all federal taxes on gasoline and diesel, including the GST, until at least Canada Day 2027.