What the proposed schedule would mean for gasoline, diesel and aviation fuels
Federal legislation before Parliament could retroactively extend temporary excise tax relief on five types of fuel. However, the extension is not currently enacted.
Bill C-38, the Canadian Fuel Affordability Act, was introduced on September 21, 2026. It completed second reading and was referred to the House of Commons Standing Committee on Finance on September 22. As of September 30, it remained at consideration in committee and had not received Royal Assent.
What has already been enacted?
Bill C-30 received Royal Assent on June 18, 2026. It set the federal excise tax rate at zero for the covered fuels from April 20 through September 7, 2026.
That enacted zero-rate period ended on September 7. The proposed extension beginning September 8 is contained in Bill C-38 and has not received Royal Assent.
The government announced the proposed extension on September 2, but that announcement did not change the law. Bill C-38 was introduced later in the month.
Proposed fuel tax rates and dates
The five covered fuel categories are:
- Unleaded gasoline
- Unleaded aviation gasoline
- Leaded aviation gasoline
- Diesel fuel
- Aviation fuel other than aviation gasoline
The following table separates the enacted period from Bill C-38’s conditional schedule:
| Fuel type | April 20–September 7, 2026 Enacted under Bill C-30 |
September 8, 2026–January 31, 2027 Proposed |
February 1–March 31, 2027 Proposed |
Regular rate proposed to apply from April 1, 2027 |
|---|---|---|---|---|
| Unleaded gasoline and unleaded aviation gasoline | $0.00 per litre | $0.00 per litre | 5 cents per litre | 10 cents per litre |
| Leaded aviation gasoline | $0.00 per litre | $0.00 per litre | 5.5 cents per litre | 11 cents per litre |
| Diesel fuel and aviation fuel other than aviation gasoline | $0.00 per litre | $0.00 per litre | 2 cents per litre | 4 cents per litre |
All dates after September 7 in this table depend on Bill C-38 being enacted in its supplied form. Parliament could amend or defeat the bill, or enact it on different terms.
How much could a driver save?
A zero rate rather than the regular 10-cent-per-litre gasoline excise tax represents a $5 excise-tax difference on 50 litres of gasoline.
That does not guarantee a $5 reduction at the pump. Federal fuel excise tax is generally payable upstream by manufacturers or producers when fuel is delivered to a purchaser, and by importers on imported fuel. The proposed legislation does not require retailers to pass the full reduction through to consumers.
The official sources also do not establish a consumer rebate mechanism for the period before any retroactive enactment. They do not explain how the tax is being administered for transactions beginning September 8 while the proposed extension remains pending.
Finance Canada estimates that the proposed extension would provide an additional $2.9 billion in relief and bring estimated total relief to $5.3 billion in 2026-27. These are government estimates, not guaranteed personal savings.
Who would be affected?
The rates apply according to the type of fuel and when excise tax becomes payable. This is not a benefit that consumers apply to receive, and the supplied sources identify no consumer income, age or residency requirements.
The measure is directly relevant to manufacturers, producers, licensed wholesalers and importers responsible for federal excise tax on covered fuels. Consumers and businesses purchasing gasoline, diesel or aviation fuels may be indirectly affected through retail prices, but no particular price reduction is guaranteed.
Do You Need to Do Anything?
Consumers: No application is required for the proposed fuel excise tax reduction. Consumers should not assume they will receive a retroactive payment or refund because no consumer rebate mechanism is established in the supplied sources.
Excise tax filers: Anyone required to file an excise tax return must continue filing for every reporting period, even when the applicable rate is zero. Form B200 is used to report quantities and excise tax payable, generally monthly unless semi-annual reporting has been authorized.
A required return and related payment must be received by the end of the month following the reporting period.
A person who held tax-paid inventory on April 20, 2026, was not eligible for a refund. The CRA’s technical notice also says that, under the proposal, no excise tax would be payable on inventory held on February 1, 2027, when the proposed half rates would begin.
Bottom Line
The enacted zero federal excise tax period under Bill C-30 ended on September 7, 2026. Bill C-38 proposes to extend the zero rates retroactively from September 8 through January 31, 2027, followed by two months at half rates and a return to regular rates on April 1, 2027.
As of September 30, 2026, Bill C-38 remained before the House Finance Committee and had not received Royal Assent. The extension, phase-out dates and 2027 rates should therefore be treated as conditional, not as current law or guaranteed retail savings.
Official Government Sources
- Finance Canada release on the introduction of Bill C-38
- Finance Canada’s September 2 proposal announcement
- Parliament of Canada status page for Bill C-38
- Text of Bill C-38 at first reading
- Bill C-30 as enacted at Royal Assent
- CRA notice on proposed temporary fuel excise tax rates
This article provides general information based on official Canadian government sources. Government programs, amounts, eligibility rules and deadlines can change. Check the official sources linked above for information specific to your situation.