Why gas is less expensive on First Nations reserves

A person pumps gas in Montreal on Thursday, April 2, 2026. THE CANADIAN PRESS/Christinne Muschi

HAGERSVILLE, Ont. – With fuel prices hitting record levels, more drivers are travelling to gas stations on First Nations reserves, where tax rules and exemptions mean savings can be as high as 30 to 40 cents per litre.

But the amount of money saved all depends on who you are and where you fill up.

“I’m not far and we are coming this way,” said John Morris, who was fuelling up at the New Credit Variety & Gas Bar in Hagersville, Ont., en route to his nearby cottage. “I wouldn’t drive out here to get gas and go back. It’s too expensive.”

While rules differ across different provinces and territories, most on-reserve, First Nations-owned businesses are exempt from some taxes, and many First Nation gas stations pass these savings on to both status and non-status customers. In most provinces, status card holders have access to even cheaper gas, due to their own personal tax exemptions.

For example, at a gas bar on Six Nations of the Grand River territory this week, regular gas for a non-status customer was $1.59 per litre, compared to $1.44 per litre for someone with a status card. At a nearby off-reserve gas station, prices were around $1.80 per litre.

While Ottawa has suspended the federal excise tax on gasoline due to rising prices, taxes still make up a significant chunk of what drivers pay at the pump. For example, in Ontario the provincial gas tax is set at nine cents per litre and drivers pay a 13 per cent harmonized sales tax (five per cent federal and eight per cent provincial).

There is also a clean fuel standard charge of seven cents per litre. On-reserve gas stations are generally exempt from the provincial gas tax and the provincial portion of the HST, but still pay the clean fuel standard charge.

Because fuel prices and on-reserve savings all depend on taxes, savings differ depending on where you fill up. For example, in Alberta where taxes are lower, the difference between fuel prices on-reserve and off is less dramatic than it is in British Columbia, where fuel is more heavily taxed.

Whether seeking out an on-reserve gas station is worth it depends on a number of factors: tank size, how empty the tank is, travel distance, fuel price and vehicle fuel efficiency. A short detour could net savings of between $10 and $15 but driving significant distances for cheap gas will burn more fuel getting there than the actual savings at the pump.

No matter where you fill up, gas prices in Canada are subject to the same market volatility that has impacted the price of gas globally since the war in Iran began in late February.

That month, the average price of a litre of regular gasoline in Canada was 141.8 cents per litre; today, the average price is 185.1 cents per litre, according to CAA.