OTTAWA - After facing calls from the opposition, the federal government is extending the temporary pause of the federal fuel excise tax on gas and diesel into the new year. Finance Minister François-Philippe Champagne made the announcement in Ottawa on Wednesday. As previously reported by CTV News, Champagne said the pause will be extended until Jan. 31, 2027, with the tax gradually returning by the spring. Starting Feb. 1, 2027, the federal government will reimpose 50 per cent of the excise tax, with the full tax set to return by April 1 of next year. “This is real relief right now,” Champagne said while speaking to reporters. The pause, which was first announced in April to address volatile oil prices amid the U.S.-Iran war, was set to expire on Labour Day. Back in April, the federal government said the tax suspension would reduce the cost of gas by 10 cents per litre on regular gas, and four cents on diesel. But despite the measure, gas prices remain high across the country. According to the Canadian Automobile Association (CAA), as of Wednesday morning, the average cost of regular gas in Canada is 172.9 cents per litre. Conservative Leader Pierre Poilievre has been calling on Prime Minister Mark Carney to “remove all taxes on gas until at least Canada Day 2027.” In a statement on Wednesday, Poilievre claimed victory for the policy change, saying “Conservatives won another battle for Canadian families,” but called it a “modest extension” that “will not be enough for Canadians.” Poilievre also reiterated his push for the federal government to remove the GST on gas and diesel and permanently eliminate the Clean Fuel Regulation and industrial carbon tax. Ontario Premier Doug Ford has also called on Carney to make the federal gas tax suspension permanent. Asked explicitly whether that is a possibility, Champagne would not commit, but pointed to other affordability measures the Liberal government has implemented, including the Canada Child Benefit and the Canada Groceries and Essentials Benefit. Pressed further on whether additional measures are coming to address broader affordability concerns, Champagne said the federal government has “done a lot” and will be “on the watch.” “We’re always going to be there with (Canadians), and that’s why we’re looking at targeted measures that have a real impact,” he said. According to the government, extending the gas tax suspension will cost another $2.9 billion in lost federal revenue, with the total lost revenue as a result of the measure amounting to $5.3 billion for 2026–2027. NDP Leader Avi Lewis also commented on the extension Wednesday, saying the federal government should instead implement a windfall tax on oil companies and use the profits to “give Canadians real relief at gas stations and grocery checkouts.”
