Canada suspends fuel tax until September to ease cost pressures

The measure, which also applies to aviation fuel, is expected to reduce prices at the pump by about 10 cents per litre for regular gasoline and 4 cents for diesel.

Officials said the move is designed to provide immediate relief as ongoing geopolitical tensions and supply disruptions, particularly in the Middle East, continue to push up fuel prices worldwide.

The temporary tax suspension comes as part of a broader push by Ottawa to strengthen energy security while advancing long-term investments in clean and conventional energy, including electricity, liquefied natural gas, and nuclear power.

“While we build for the long term, we are providing immediate relief to bring down costs for Canadians right now,” Mark Carney said in a statement.

Finance Minister François-Philippe Champagne said the tax cut would deliver “timely, meaningful, and tangible relief", particularly for sectors heavily reliant on fuel, including transportation, agriculture, construction, and logistics.

Industry groups have long argued that fuel costs directly affect supply chains and consumer prices.

By lowering operating expenses for truckers and businesses, the government expects the measure to help stabilise prices for goods and services while supporting hiring and investment.

Energy and Natural Resources Minister Tim Hodgson said the policy balances short-term affordability with long-term energy goals.

“Being an energy superpower means delivering energy Canadians can afford,” he said.

The latest move underscores Ottawa’s dual-track approach, offering immediate cost relief while investing in infrastructure and energy projects intended to reduce long-term dependence on volatile global markets.