Federal government will extend gas tax holiday into 2027

Finance Minister François-Philippe Champagne is expected to announce on Wednesday that the Liberal government will extend the federal excise tax holiday on gasoline and diesel until early 2027, according to sources that spoke with Radio-Canada.

First announced in April, holiday was set to end on Labour Day

Peter Zimonjic · CBC News

· Posted: Sep 02, 2026 9:09 AM EDT | Last Updated: 16 minutes ago

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Finance Minister François-Philippe Champagne is expected to announce on Wednesday that the Liberal government will extend the federal excise tax holiday on gasoline and diesel until early 2027, according to sources that spoke with Radio-Canada.

Champagne will make the announcement in Ottawa as part of the government's efforts to help Canadian families and businesses deal with the rising cost of living. 

In April, Carney temporarily removed the 10-cent federal excise tax on a litre of gas and four cents per litre on diesel until Sept. 7, which is Labour Day.

At the time, Carney said the move, which was expected to cost an estimated $2.4 billion, would act as a bridge to help get Canadians over "short-term pressures" caused by a spike in the global price of oil since the U.S. began its war with Iran.

• Carney temporarily suspending federal fuel excise tax on gas, diesel and aviation fuel

• Ford writes Carney asking to extend gas and diesel excise tax holiday to Jan. 1

In 2022, the Ford government introduced its own temporary fuel tax holiday, cutting taxes paid on a litre of gas by 5.7 cents and the tax on a litre of diesel by 5.3 cents. 

That move effectively harmonized the provincial tax rate on a litre of gas and a litre of diesel to just nine cents, which the Ford government said in the 2026 provincial budget saves households about $115 per year. 

Last year, that tax reduction was made permanent.

Ever since Carney first announced he was giving Canadians an excise tax holiday on fuel, the federal Conservatives have been calling on the government to extend that holiday.

Conservative Leader Pierre Poilievre repeated that demand on Wednesday, asking for all federal taxes on gasoline and diesel, including the GST, be removed until at least Canada Day 2027.

ABOUT THE AUTHOR

Peter Zimonjic is a senior writer for CBC News who reports for digital, radio and television. He has worked as a reporter and columnist in London, England, for the Telegraph, Times and Daily Mail, and in Canada for the Ottawa Citizen, Torstar and Sun Media. He is the author of Into The Darkness: An Account of 7/7, published by Vintage.