The federal fuel excise tax returns to its full rate on September 8, 2026. That’s 10 cents a litre on gasoline and unleaded aviation gasoline. Diesel and other aviation fuel rise 4 cents a litre, and GST/HST applies on top of these rates. The actual pump-price increase can run slightly higher than 10 or 4 cents alone.
The tax has been set to zero since April 20, 2026, and that suspension ends September 7 (Labour Day). This is already law, not a proposal still working through Parliament, though some politicians are calling for an extension.
Why This Isn't a New Tax
The federal government set the fuel excise tax to zero from April 20 through September 7, 2026. The suspension ends September 8, when the pre-suspension rate simply resumes on schedule.
The manufacturer or wholesaler pays this tax when fuel is delivered to a retailer. It’s built into the price at the pump. Most businesses don’t file or remit this tax directly. For almost every business, this shows up as a cost increase, not a new filing obligation.
How Higher Fuel Costs Show Up in Your Numbers
Any business with meaningful fuel spend, delivery, trades, construction, agriculture, or a company vehicle fleet, should take note. It’s a real line-item change starting September 8. A few things worth tracking:
- Fuel expense line items will rise. Budgets built around suspension-period pricing will understate September and beyond.
- GST/HST on fuel purchases rises too. GST/HST is calculated on the pump price. A higher price means slightly more GST/HST paid per litre, not just a higher pre-tax cost.
- Instalment estimates may need a second look. If your corporate tax instalments were based on this year’s numbers, a fuel-driven cost increase could affect your final balance. It may be worth reviewing your instalment plan with your accountant.
What to Check Before September 8
- Review fuel-related budget lines for the rest of the year against the resumed rate
- Confirm your bookkeeping is tracking fuel costs separately, so the increase is easy to see and explain later
- Flag the change to anyone doing cash flow forecasting for Q3 and Q4
- This only applies to a small subset of businesses: licensed or registered fuel manufacturers, wholesalers, or importers. They remit this excise directly. If that’s you, confirm your systems are set to charge the full rate again from September 8
How Legend Fusions Can Help
Higher fuel costs affect 2 numbers worth a second look this quarter. Your GST/HST input tax credit amounts on fuel purchases will shift as the pump price rises. Your corporate tax instalments may need a second look too. A fuel-driven cost increase partway through the year can shift what you owe.
Contact Legend Fusions if you want your GST/HST claims or instalments reviewed ahead of September 8.
Jeffrey Ross
Jeffrey Ross is an experienced tax accountant focused on US-Canada cross-border taxation, with over three years in the industry, including a key role as client manager at a Canadian tax firm. He provides expertise in corporate and personal tax planning, specializing in non-resident tax, capital gains, CRA and IRS compliance, and retirement planning. Known for his personalized approach, Jeffrey is dedicated to guiding clients with clear, practical advice tailored to complex tax scenarios, aligned with the evolving tax laws.