Compliance
Compliance Update: Temporary Suspension of Federal Fuel Excise Tax
From April 20 to September 7, 2026, Canada suspends federal excise tax on fuel to ease costs—businesses must track rates carefully and adjust their reporting.
By NomadicTax Research Team • 5-8 min read • June 4, 2026
## What’s the change?
The Government of Canada has proposed legislative amendments to the Excise Tax Act to temporarily suspend **federal excise taxes** on:
- Gasoline and unleaded aviation gasoline
- Diesel fuel
- Aviation fuel
The suspension is effective **April 20, 2026 through September 7, 2026 (inclusive)**. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/04/temporarily-suspending-the-federal-fuel-excise-tax.html?utm_source=openai))
## Why it matters
This measure was introduced to help address fuel price pressures, particularly caused by international oil market disruptions. The effect is a substantive reduction in costs at the pump and for industries reliant on fuel. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/04/temporarily-suspending-the-federal-fuel-excise-tax.html?utm_source=openai))
## Compliance obligations for affected parties
- **Fuel manufacturers, wholesalers, and importers**: Must determine whether fuel was delivered, imported, or sold after April 19, 2026 to qualify for the suspension. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/04/temporarily-suspending-the-federal-fuel-excise-tax.html?utm_source=openai))
- **Retailers**: Need to adjust billing to customers since excise tax will be zeroed temporarily.
- **Records and reporting**: Maintain clear transactional records to show when fuel was acquired and sold/delivered.
- **Monitoring rates**: Rates revert to 10¢/L for gasoline and unleaded aviation gasoline, and 4¢/L for diesel/aviation fuel (other than avgas) on September 8, 2026. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/04/temporarily-suspending-the-federal-fuel-excise-tax.html?utm_source=openai))
## Example
A transportation company purchasing diesel fuel on **May 5, 2026** would pay **no federal excise tax**, helping lower fuel expenses. On **October 1, 2026**, the same purchase would again include the standard excise rate (4¢/L) as the suspension ends on September 7.
## Best practices during suspension
- Update pricing systems to remove excise tax automatically during the suspension period, and reinstate when suspension ends.
- Ensure proper modeling of cost savings; businesses could use forecasts to plan cash flow and budget adjustments.
- Understand dual rates if buying fuel in advance of or after the transition dates.
- Communicate to customers or suppliers where relevant, especially in supply contracts that may assume excise-included pricing.