Sep 14, 2026
When filling up on gas this week, you’ll still be paying less federal tax at the pump than you were last spring — and that relief just got a longer runway. Ottawa has extended its pause on the federal fuel excise tax, pushing its full return back to April 1, 2027.
For Canadian drivers who’ve gotten used to lower prices, that’s a few more months of breathing room. But the tax isn’t gone — it comes back in stages, and the schedule matters if you’re budgeting for a household or a business around fuel costs.
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Here’s what actually changed, what it’s worth and what to watch for as the relief winds down.
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What changed with the fuel tax pause
The federal government first suspended the excise tax on gasoline, diesel and aviation fuels on April 20, 2026. That pause was due to wind down this year, but the government has now extended it until January 31, 2027. From February 1 to March 31, 2027, drivers will pay 50% of the regular excise tax rate.
“Canadians across the country are feeling the impact of affordability challenges every day,” said Ruby Sahota, Secretary of State for Combatting Crime, in a press release, adding that extending the pause provides additional relief to households as global economic uncertainty continues to affect costs.
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What the pause is actually worth at the pump
On the day the tax was first suspended, Canadians saved 10 cents a litre on gasoline and unleaded aviation gasoline, 11 cents a litre on leaded aviation gasoline and 4 cents a litre on diesel and aviation fuel.
In this hypothetical example, a driver filling a 50-litre tank once a week would save about $5 per fill-up on gasoline alone — or roughly $200 over the nearly 40 weeks the tax stays fully suspended, before the rate starts climbing again.
Who benefits most
The government says the extension is meant to help truckers and businesses in the food, agriculture, housing, construction and delivery sectors, along with everyday households. The extension is projected to cost about $2.9 billion in additional fiscal impact, bringing total federal fuel tax relief to an estimated $5.3 billion for 2026-27.
What to watch before the relief ends
Starting February 1, 2027, the excise tax climbs to five cents a litre for gasoline and unleaded aviation gasoline, five-and-a-half cents for leaded aviation gasoline and two cents for diesel and aviation fuel. By April 1, 2027, rates will return to their full levels.
The federal excise tax is only one part of what you pay at the pump — provincial taxes and global oil prices move independently, so a lower federal tax doesn’t guarantee a lower total price.
If you’ve built the lower fuel tax into your monthly budget, treat it as temporary. Mark January 31 and April 1 on your calendar as the dates your fuel costs are scheduled to rise, and use the next several months to build a small cushion — especially if you drive for work or run a fleet. The relief is real, but it’s on a countdown.
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Amy Tokic is an SEO content editor for Money.ca. She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors.
