Carney suspends federal fuel excise tax to lower gas prices for Canadians
Temporary fuel tax relief expected to cut costs at the pump amid global energy pressures
OTTAWA — Prime Minister Mark Carney announced Tuesday that the federal government will temporarily suspend the Fuel Excise Tax on gasoline and diesel, a move aimed at providing immediate cost relief to Canadians facing rising fuel prices.
The measure will take effect April 20, 2026, and remain in place until September 7, 2026. According to the Prime Minister’s Office, the suspension is expected to reduce gasoline prices by approximately 10 cents per litre and diesel prices by about 4 cents per litre.
Immediate relief at the pump
The temporary tax suspension applies nationwide and includes aviation fuels. The federal government says the move is designed to ease financial pressure on households and businesses during a period of global energy volatility driven in part by ongoing conflict and supply disruptions in the Middle East.
The reduction in fuel costs is expected to benefit consumers directly, while also lowering transportation and operating costs across multiple sectors.
We’re cutting your costs, so you can keep more of your hard-earned paycheque. https://t.co/E44v4fOvuJ
— Mark Carney (@MarkJCarney) April 16, 2026
Impact on businesses and key industries
Officials say the measure will support industries heavily reliant on fuel, including:
- Trucking and logistics
- Agriculture and food production
- Construction and housing
- Delivery and supply chain operations
By reducing input costs, the government expects businesses to maintain operations more efficiently, support hiring, and sustain economic activity.
Response to global energy uncertainty
The federal government framed the decision as part of a broader response to international energy market instability. Rising global fuel prices, linked to geopolitical tensions and supply constraints, have increased costs for Canadian consumers and businesses.
Alongside short-term relief, the government says it is continuing to invest in long-term energy security through major projects in electricity, liquefied natural gas (LNG), and nuclear energy.
Part of broader affordability measures
The fuel tax suspension builds on a series of recent federal affordability initiatives, including:
- Personal income tax reductions for middle-class Canadians
- GST relief for first-time homebuyers
- The elimination of the federal consumer carbon tax
- The introduction of the Canada Groceries and Essentials Benefit
These measures are aimed at lowering the overall cost of living while supporting economic growth.
Long-term economic strategy
Prime Minister Carney positioned the announcement within the government’s broader economic agenda focused on resilience, energy independence, and affordability.
“We’re focused on what we can control – building Canada strong for all,” Carney said in a statement.
Finance Minister François-Philippe Champagne added that the measure provides “timely, meaningful, and tangible relief” during a period of global uncertainty.
Temporary measure with defined timeline
The tax suspension will remain in effect through Labour Day, after which the federal Fuel Excise Tax is expected to be reinstated unless further action is taken.
The government says it will continue monitoring global energy markets and domestic economic conditions in the months ahead.
Source: Prime Minister’s Office (pm.gc.ca)
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