The Government of Canada has announced an extension of its temporary federal fuel excise tax suspension, providing continued relief on diesel, gasoline, and aviation fuels through January 31, 2027.
The announcement was made September 2, 2026, by François-Philippe Champagne, Minister of Finance and National Revenue. According to the government, the extension is intended to help Canadians and businesses manage rising costs associated with economic uncertainty and global market pressures.
For truck operators and fleet owners, the extension means the federal excise tax on diesel fuel will remain suspended for several more months. The government said the measure is designed to support industries that rely heavily on fuel, including transportation, agriculture, construction, housing, food distribution, and delivery services.
The fuel tax suspension was originally implemented on April 20, 2026. At that time, the federal government suspended taxes that amounted to 10 cents per liter on gasoline and unleaded aviation gasoline, 11 cents per liter on leaded aviation gasoline, and 4 cents per litre on diesel and aviation fuel.
Under the latest announcement, these rates will remain suspended until the end of January 2027. Beginning February 1, 2027, the government plans to apply 50 percent of the normal federal excise tax rates through March 31, 2027. For diesel fuel, that would result in a federal excise tax rate of 2 cents per liter during the transition period. Full rates are scheduled to return on April 1, 2027.
Reduced Fuel Rates
“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.
Government officials said the extension is expected to have an additional fiscal impact of approximately $2.9 billion, bringing total estimated fuel tax relief for Canadians during the 2026-27 fiscal year to roughly $5.3 billion.
The announcement comes as transportation companies continue to navigate fluctuating fuel prices and broader economic uncertainty. Fuel remains one of the most significant operating expenses for commercial trucking fleets, making diesel tax reductions particularly relevant to owner-operators, service truck fleets, and vocational trucking businesses.
The Honourable Tim Hodgson, Minister of Energy and Natural Resources stated: “Canadians should not have to pay for what they did not cause – whether it is disruption in the Middle East or an unjustified trade war. An affordable, comfortable life is a priority for our government, and by extending the suspension of the fuel excise tax, we are ensuring more money stays in Canadians’ pockets and standing with every Canadian family as we build a stronger, more resilient Canada.”
While Canada has extended federal fuel tax relief, the United States has taken a different approach.
Several proposals have been introduced in Washington to temporarily suspend the federal diesel excise tax, including the Diesel Prices Relief Act of 2026, which would reduce the federal diesel tax rate to zero through the end of the year.
However, no nationwide diesel tax holiday has been enacted.
As a result, US trucking fleets continue to pay the federal diesel excise tax of 24.4 cents per gallon, a levy that helps fund the Highway Trust Fund. Supporters of diesel tax relief argue that a temporary suspension could lower operating costs for fleets and owner-operators, while opponents contend that reduced fuel tax revenue could affect long-term transportation infrastructure funding
For more information, visit www.canada.ca.