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ARTICLE · 14 APRIL 2026

Federal Fuel Tax Holiday

Millar Kreklewetz
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The Canadian government announces a temporary suspension of federal excise taxes on gasoline, diesel, and aviation fuels from April 20 to September 7, 2026, amid rising oil prices caused by Middle East conflicts disrupting global supply chains. This initiative, dubbed the "Fuel Tax Holiday," aims to provide $2.4 billion in relief to Canadians facing elevated costs at the pumps while Prime Minister Carney's Liberal government seeks to address public concerns following recent political developments.

CanadaEnergy and Natural Resources
Robert Kreklewetz
Robert Kreklewetz
David West
David West

 

GOVERNMENT TO SUSPEND FEDERAL EXCISE TAX ON CERTAIN FUELS

The Department of Finance Canada and Office of the Prime Minister both announced today that the Government of Canada will be temporarily suspending the Federal Fuel Excise Tax on gasoline, diesel and certain aviation fuels (the “Fuel Tax Holiday”).

In this report, we provide some legislative and socio-economic/political background on the Fuel Tax Holiday and explain its parameters.

Legislative Background – Federal Fuel Excise Tax

Under s. 23(1) of the Excise Tax Act (“ETA”), a tax is applied to certain fuels mentioned in Schedule I of the ETA at the rate specified in the Schedule where those fuels imported or manufactured and delivered to the purchaser of the fuels.

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