Reports say federal fuel-tax pause could be extended to January 2027

Multiple reports say the federal government is expected to extend its temporary suspension of the federal fuel excise tax on gasoline and diesel until Jan. 31, 2027. The tax break had been scheduled to expire Sept. 7, and CTV first reported Finance Minister François-Philippe Champagne was expected to announce an extension in Ottawa later in the day.

If confirmed, the measure would continue relief of 10 cents per litre on gasoline and four cents per litre on diesel. The Canadian Automobile Association listed the national average gasoline price at 172.9 cents per litre Wednesday morning. The gasoline excise tax has been 10 cents per litre since 1995 and the diesel excise tax four cents per litre since 1987.

Prime Minister Mark Carney announced the pause April 14, shortly after his Liberal government secured a majority, and it took effect April 20. Carney said fuel prices had risen sharply because of the war with Iran. The measure was estimated to provide more than $2.4 billion in tax relief this year.

If extended, the federal excise tax would remain at zero through Jan. 31. The Canadian Taxpayers Federation estimates sedan drivers would continue to save about $6 per fill-up, compared with about $7 for minivan drivers and $10 for pick-up truck drivers.