Fuel excise tax pause would last until January under new legislation

Uday Rana GlobalNews.ca

September 22, 2026 11:47 am

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The suspension of Ottawa’s fuel excise tax would be extended until the end of January 2027 under proposed new legislation, Finance Minister Francois-Phillipe Champagne said on Tuesday.

Fuel prices have remained elevated since March, with the start of the U.S. war on Iran and the closure of the Strait of Hormuz, including high gas prices in Canada.

In response, Prime Minister Mark Carney in April announced a temporary suspension of the federal fuel excise tax from April until Labour Day.

This removed up to $0.10 per liter on gasoline and $0.04 per liter on diesel fuel, Carney had said at the time.

With fuel prices once again climbing because of the renewed fighting in the Middle East, legislation tabled in the House of Commons on Tuesday will extend that pause into the new year.

“What I like about the measure is it’s very direct. It’s immediate. It’s very simple. It applies across the country. And it’s going to also help to reduce the pressure on the price of gas and the price of food,” Champagne told reporters on Tuesday.

When asked if the federal government would consider extending the tax break further to April of next year, he did not rule out the possibility.

“No one has a crystal ball on what the world is going to look like in January 2027,” he said.

Average gas prices across Canada were at $1.82 per litre, hovering close to the monthly high of $1.82 per litre. This is up around 10 cents per litre compared to the same time a month ago, when it was at $1.72.

According to GasBuddy, Ontario saw the highest increase in gas prices on Tuesday ($1.77 per litre, up 2.8 cents), followed by British Columbia $2 per litre, up 2.3 cents).

The price of Brent crude – the international benchmark for the price of oil – rose again on Tuesday, past US$100 per barrel.

Escalation of conflict in Yemen between the Houthis and Saudi Arabia last week raised oil prices again after Saudi Arabia was forced to stop operations at its East-West pipeline due to the conflict.