Ottawa to suspend federal fuel excise tax until Labour Day as gas prices climb
THUNDER BAY – NEWS – The federal government says it will suspend the federal excise tax on gasoline and diesel from April 20 to Sept. 7, a move Prime Minister Mark Carney says will cut the price of regular gasoline by 10 cents a litre and diesel by four cents a litre. The announcement is significant in Thunder Bay and Northwestern Ontario, where long driving distances, freight costs and diesel-dependent industries can quickly turn higher fuel prices into broader cost-of-living pressure.
Carney frames fuel tax pause as temporary cost-of-living relief
Speaking on Parliament Hill Tuesday, Carney described the tax suspension as a temporary measure aimed at helping consumers and businesses cope with rising fuel costs. Reuters reported the government will pause the federal fuel excise tax on gasoline and diesel from April 20 through Sept. 7, while Canadian Press reporting said the break will run until Labour Day.
What the tax change means at the pump
Natural Resources Canada says the federal excise tax is set at 10 cents a litre on gasoline and four cents a litre on diesel. Carney said suspending that tax is expected to lower pump prices by those same amounts during the temporary relief period.
Political pressure had been building
The decision came days after Conservative Leader Pierre Poilievre publicly called on Ottawa to suspend the federal fuel excise tax and GST on gas and diesel for the rest of 2026, while also permanently eliminating what Conservatives describe as the clean fuel standard tax and industrial carbon tax.
The federal government’s move does not go that far, but it does adopt one of the central measures Poilievre had been pressing for.
Announcement follows Liberals’ byelection breakthrough
The tax announcement came one day after Carney’s Liberals secured a parliamentary majority through three byelection wins, pushing the government to 174 seats in the 343-seat House of Commons. Reuters reported the result gives Carney greater freedom to pass legislation without relying on opposition support.
Why it matters in Thunder Bay and Northwestern Ontario
For Northern Ontario, fuel prices carry extra weight. Higher gasoline prices hit commuters and families directly, while diesel prices ripple through trucking, construction, mining, forestry and food distribution.
In a region where communities are spread out and supply chains depend heavily on highway transport, even a temporary reduction in fuel taxes can have a wider effect than it might in larger urban centres with shorter travel distances and more transit options. That local impact is an inference based on the announced fuel tax cut and the role diesel plays in transport and goods movement.
