The Government of Canada is extending its temporary suspension of the federal fuel excise tax on gasoline, diesel and aviation fuels until January 31, 2027, with a reduced rate to follow through the end of March.
Minister Jill McKnight participated in an event at Aheer Transportation Group in Delta, B.C. to mark the announcement, which extends a suspension first introduced on April 20, 2026. From February 1 through March 31, 2027, the government will apply 50 per cent of the regular excise tax rate before rates return to full levels on April 1, 2027.
The original suspension saved Canadians 10 cents per litre on gasoline and unleaded aviation gasoline, 11 cents per litre on leaded aviation gasoline, and 4 cents per litre on diesel and aviation fuel. Officials say the extension will bring down everyday costs for Canadians, including truckers and businesses in the food, agriculture, housing, construction and delivery sectors.
“In communities like Delta, workers, businesses, and families succeed together. Behind every product on a store shelf is a supply chain powered by Canadian workers and local businesses. By extending fuel tax relief, we are helping keep goods moving, supporting jobs, and easing costs for Canadians. It is a practical measure that will make a real difference for families while strengthening our economy in uncertain times,” said the Honourable Jill McKnight, MP for Delta and Minister of Veterans Affairs and Associate Minister of National Defence.
“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. This will provide meaningful relief for families and businesses and help make everyday life more affordable,” said the Honourable François-Philippe Champagne, Minister of Finance and National Revenue.
Shinda Aheer, President and Owner of Aheer Transportation Group, welcomed the extension on behalf of the trucking industry.
“The inclusion of diesel in Ottawa’s extension of the federal fuel tax pause is welcomed by trucking companies like ours, Aheer Transportation Group, here in Delta, B.C., on behalf of our company drivers, our independent owner-operators, and our customers. Moreover, the lower gasoline costs will just as importantly benefit our drivers, our staff, our customers, and their families in their daily lives and make a real difference in their day-to-day cost of living,” Aheer said.
Gasoline prices declined by 11 cents per litre on the first day the suspension took effect in April 2026, according to the government. The estimated additional fiscal impact of the extension is about $2.9 billion, bringing total estimated tax relief for Canadians to $5.3 billion in 2026-27.
The government says the announcement builds on other affordability measures, including cutting the first marginal personal income tax rate from 15 to 14 per cent as of July 1, 2025, eliminating the GST for first-time homebuyers on new homes up to $1 million, cancelling the federal consumer carbon price effective April 1, 2025, and launching the Canada Groceries and Essentials Benefit.
