Federal fuel tax: the pause, and what comes back in 2027
The federal excise tax on gasoline and diesel has been paused since April 20, 2026. The government has extended the pause to January 31, 2027. It then returns at half rate, 5¢ a litre on gasoline, for February and March 2027, and at the full 10¢ from April 1, 2027. On a 50-litre tank the pause is worth $5.00.
Not law yet. Announced by the Department of Finance and introduced in Parliament as Bill C-38, the Canadian Fuel Affordability Act, on September 22, 2026. It is not law until Parliament passes it.
The dates and rates
| Period | Gasoline | Diesel | Saving on a 50 L tank of gas |
|---|---|---|---|
| Paused: April 20, 2026 to January 31, 2027 | 0¢ a litre | 0¢ a litre | $5.00 |
| Half rate: February 1, 2027 to March 31, 2027 | 5¢ a litre | 2¢ a litre | $2.50 |
| Full rate: April 1, 2027 onward | 10¢ a litre | 4¢ a litre | none |
The pause first ran from April 20, 2026 to September 7, 2026. The extension was announced on September 2, 2026 and introduced in Parliament as Bill C-38 on September 22, 2026. The government puts the extension at about $2.9 billion of relief, and $5.3 billion across 2026-27.
Only the federal excise tax is affected. Provincial fuel taxes and GST/HST on fuel are charged as before, so the price at the pump also depends on your province and on crude oil prices.
Related
The car loan calculator and lease vs buy calculator cover the rest of what a car costs. Every other change coming in 2027 is on what's changing in 2027.
Frequently asked questions
- When does the federal gas tax pause end?
- The government has extended it to January 31, 2027. The tax then comes back at half rate, 5¢ a litre on gasoline, from February 1, 2027 to March 31, 2027, and at the full 10¢ from April 1, 2027. The extension is in Bill C-38, which Parliament has not yet passed.
- How much does the pause save on a tank of gas?
- The federal excise tax is 10¢ a litre on gasoline, so a 50-litre fill-up costs $5.00 less while it is paused, and $2.50 less at half rate. Provincial fuel taxes and GST/HST are separate and not affected.
- Does the pause apply to diesel?
- Yes. Diesel's federal excise tax of 4¢ a litre is paused on the same dates, then 2¢ at half rate and 4¢ from April 1, 2027.
- Is this the carbon tax?
- No. This is the federal excise tax, a fixed 10¢ a litre on gasoline and 4¢ on diesel. It is a separate tax from any carbon price, and provincial fuel taxes are separate again.
Sources
Checked . The per-tank figures are our own arithmetic.
- Department of Finance Canada – Minister Champagne introduces legislation to extend the federal fuel excise tax relief (September 22, 2026)
- Department of Finance Canada – The Government of Canada extends the federal fuel excise tax relief (September 2026)
- Prime Minister of Canada – Suspension of the federal fuel excise tax on gasoline and diesel (April 14, 2026)