Finance Minister François-Philippe Champagne is set to declare an extension of the federal excise tax relief on gasoline and diesel until early 2027, sources informed Radio-Canada. The announcement, scheduled for Wednesday in Ottawa, is part of the government’s strategy to assist Canadian households and businesses cope with the escalating cost of living.
Earlier in April, Carney had temporarily lifted the 10-cent federal excise tax on a liter of gas and reduced the tax on diesel by four cents per liter until September 7, corresponding to Labour Day. This action, estimated to cost approximately $2.4 billion, aimed to serve as a transitional measure to alleviate the “short-term pressures” arising from a surge in global oil prices triggered by the U.S.’s conflict with Iran.
In 2022, the Ford administration introduced its own provisional fuel tax exemption, slashing taxes on each liter of gas by 5.7 cents and on diesel by 5.3 cents. Consequently, this adjustment harmonized the provincial tax rate on gas and diesel to a mere nine cents per liter, resulting in annual savings of about $115 per household, as outlined in the 2026 provincial budget. Subsequently, this tax reduction was made permanent the following year.
Since the inception of the excise tax break on fuel by Carney, the federal Conservatives have persistently urged the government to prolong this relief measure. Conservative Leader Pierre Poilievre reiterated this plea on Wednesday, advocating for the removal of all federal taxes on gasoline and diesel, including the GST, until at least Canada Day 2027.
