Federal gas tax break ends Sept. 7; pressure mounts on Carney
Canada's temporary federal fuel excise tax suspension, which cut 10 cents per litre from gasoline and 4 cents from diesel since April, is set to expire Labour Day. Business owners and provincial leaders are pushing PM Carney to extend or permanently drop the tax.
The Deadline Approaches
Canada's federal government suspended the full amount of the tax on gasoline and diesel starting April 20, 2026, until September 7, 2026. The exemption gives Canadians savings of 10 cents a litre for gas and 4 cents a litre for diesel.
The national average price for a litre of gas including taxes rose to a high in mid-May of $1.98 a litre, but has since come down to $1.70. However, pressure is mounting on Carney as the Sept. 8 deadline for the tax, which adds 10 cents to the price of a litre of gasoline and four cents to a litre of diesel, to restart is in sight.
Who Wants Action
Ontario Premier Doug Ford has called on the prime minister to, if not permanently axe the tax, then at the very least suspend reintroducing it until 2027. A poll released by the Canadian Taxpayers Federation last week said 63 per cent of people oppose the tax being added back to prices at the pump.
Small business owners are especially concerned. As drivers filled up on expensive gas and diesel heading into the weekend, some were also thinking about the end of the federal fuel excise tax exemption, with commuters hoping PM Carney would find a way to extend it.
For newcomers and expats: If you own a business, drive for work, or rely on delivery services, watch for a potential price increase at the pump after Labour Day. Budget accordingly for higher fuel costs starting mid-September 2026.
Sources
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