Canadian Fuel Affordability Act

This bill, called the Canadian Fuel Affordability Act, makes changes to the Excise Tax Act dealing with the federal excise tax on fuels like gasoline, diesel, and aviation fuel. It extends the current temporary suspension of this federal fuel excise tax, which was due to expire, so that it now continues until January 31, 2027. During this extended period, no federal excise tax is charged on these fuels.

After that suspension ends, the bill introduces a new transition period running from February 1, 2027 to March 31, 2027. During these two months, instead of the tax being fully suspended or fully restored, it is charged at half the normal rates. For example, the usual rates of 10 cents and 11 cents per litre for certain fuels would temporarily be 5 cents and 5.5 cents, and a 4-cent rate would become 2 cents.

In short, the bill delays the full return of the federal fuel excise tax and phases it back in gradually: no tax until the end of January 2027, half the normal tax rate through February and March 2027, and presumably the full regular rate afterward.

This bill amends the Excise Tax Act to extend the suspension of the federal fuel excise tax until January 31, 2027, and to set the tax rates on fuels at 50% of their regular levels from February 1 to March 31, 2027.

• Tax suspension period — the existing excise tax suspension on unleaded gasoline, aviation gasoline, diesel fuel and aviation fuel, originally covering the period after April 19, 2026, is extended to apply until the end of January 2027.
• Retroactive effect — the extension of the suspension is deemed to have come into force on September 8, 2026, meaning it applies to a period before the bill received assent.
• Reduced-rate period — for the period after January 2027 and before April 2027, the excise tax rates in the Act's schedule (set out in cents per litre, e.g. $0.10, $0.11, $0.04) are to be read as half those amounts ($0.05, $0.055, $0.02).
• Automatic sunset — the reduced-rate arrangement itself expires at the end of March 2027, after which the regular rates in the schedule would apply unless further amended; no mechanism in this text extends it further.
• No new body or discretion created — the bill sets fixed dates and fixed rate fractions directly in the statute, leaving no minister or agency with discretion to alter the rates or timeline under this text.