Federal gas tax cut extended until January 2027
Posted September 2, 2026 7:32 am.
Last Updated September 2, 2026 12:50 pm.
The federal government has extended its excise tax cut on gasoline and diesel until Jan. 31, 2027, Finance Minister François-Philippe Champagne announced on Wednesday.
CityNews had learned earlier in the day that the federal government would be extending the gas tax break but Champagne confirmed it during a press conference in Ottawa on Wednesday afternoon.
“It’s about making life more affordable. … Many Canadians are concerned by the price of rent, the price of food [and] the price of gas,” the finance minister said.
He also said from Feb. 1 to March 31, 2027, the fuel excise tax will return to half its regular rate and then fully resume on April 1.
The tax break, which saves Canadians 10 cents per litre on regular gasoline and four cents on a litre of diesel, was set to end the day after Labour Day. However, there were calls to extend it beyond that date.
Back in April, the federal government announced a suspension of the fuel excise tax on gasoline and diesel when the war in Iran caused global fuel prices to spike.
Gas prices are rising again as conflict between the U.S. and Iran intensifies and as the Strait of Hormuz remains a supply line choke point.
In early August, Ontario Premier Doug Ford called on Prime Minister Mark Carney to extend the suspension until at least Jan. 1, 2027, or even make it permanent.
On Wednesday, Ford issued a statement on X saying he welcomed the tax break extension but reiterated his call to make it permanent.
Conservative Leader Pierre Poilievre previously said he wanted the excise tax relief extended until at least July 1, 2027.
In a statement on Wednesday, he also called on the governing Liberals to remove the seven cents per litre Clean Fuel Regulations until Canada Day and to permanently remove the Industrial Carbon Tax.
With files from The Canadian Press
