Canada’s gas tax pause just got extended — Here’s how much you’ll save at the pump

Just as Canadians were bracing for gas prices to tick back up after Labour Day, the government has changed course.

According to a new report from The Canadian Press, Finance Minister François-Philippe Champagne is set to announce an extension of the federal gas tax holiday at a press conference in Ottawa today, keeping the tax break in place well past its original expiry date.

CBC reports that the pause will last “until early 2027.”

Back in April, Prime Minister Mark Carney’s government temporarily suspended the federal excise tax on gasoline, 10 cents per litre, along with a 4-cent-per-litre reduction on diesel, after the war in Iran sent global fuel prices spiking. That suspension was scheduled to end after Labour Day, which falls on September 7 this year. A government official has now confirmed to The Canadian Press that the tax won’t be reimposed next week after all.

The extension comes as gas prices are climbing again, driven by intensifying conflict between the U.S. and Iran and continued disruption around the Strait of Hormuz, a key global oil supply route.

With the extension in place, drivers will keep the same savings that have applied since April: 10 cents off every litre of regular gas, and 4 cents off every litre of diesel. For context, filling a 50-litre tank works out to roughly $5 in savings compared to what you’d pay without the tax suspension.

Not everyone thinks this goes far enough, though.

Conservatives have been pushing for something bigger, calling for the pause to be extended all the way to the end of the year, and for additional GST relief on top of it, which they estimate could bring fuel prices down by as much as 25 cents per litre combined.

Ontario Premier Doug Ford welcomed the extension in a social media statement, but went a step further, calling on the federal government to make the tax suspension permanent rather than treating it as a temporary measure tied to global events.

According to the Canadian Automobile Association (CAA), the average price of gas in Canada sat at 172.9 cents per litre as of Wednesday morning.