Canadians are getting a fuel tax break into 2027 — here’s when it ends
Canadian drivers can expect continued relief at the pump as the federal government extends its fuel excise tax into 2027.
Earlier today, Ruby Sahota, secretary of state for combating crime, announced that the excise tax on fuel will remain suspended until Jan. 31, 2027, before a 50 per cent tax rate takes effect from Feb. 1 through March 31, 2027.
“By extending the pause on the federal fuel tax, we are providing additional relief to households as global economic uncertainty continues to affect costs,” stated Sahota.
In response to soaring fuel prices, the government suspended the fuel excise tax on April 20, 2026, saving drivers 10 cents per litre on gas and four cents per litre on diesel. The temporary measure was meant to expire on Monday, Sept. 7, but will now continue until Jan. 31, 2027.
However, from Feb. 1 through March 31, 2027, reduced federal fuel excise tax rates will take effect, with drivers expected to pay up to five cents per litre for gasoline and two cents per litre for diesel fuel.
Oleg Mayorov/Shutterstock
Once the suspension period ends on April 1, 2027, fuel tax rates will return to full levels of 10 cents per litre for gasoline and four cents per litre for diesel.
The extension into 2027 is undoubtedly a welcome announcement for Canadians. The government said that the temporary suspension is expected to save Canadians a total of $5.3 billion from April 2026 until March 2027.
As of Tuesday, according to the Canadian Automobile Association, the national average gas price in Canada is $179.9 per litre, up from $171.2 per litre the previous week.
“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,” said François-Philippe Champagne, minister of finance and national revenue. “This will provide meaningful relief for families and businesses and help make everyday life more affordable.”