10 Days Left: What the End of the Gas Tax Holiday Actually Costs You

 

By MoneySavings.ca  |  August 28, 2026

The federal gas tax holiday ends in 10 days. Starting September 8, the 10-cent-per-litre federal excise tax on gasoline comes back — and diesel's 4-cent-per-litre tax returns with it. If you've gotten used to cheaper fill-ups since April, here's exactly what changes and what it'll cost you.

What the Tax Holiday Actually Did

Back in April, Ottawa suspended the federal fuel excise tax on gasoline, diesel, and aviation fuels to cushion Canadians from a spike in global oil prices tied to the Iran conflict. Since April 20, the federal excise rate on gasoline has sat at 0 cents per litre instead of the usual 10 cents. Diesel and aviation fuel taxes dropped to zero from their normal 4-cent rate. Finance Canada pegged the total relief at more than $2.4 billion over the year.

That relief window closes September 7 — Labour Day — inclusive. On September 8, rates snap back to their standard levels: 10 cents/litre on gasoline, 4 cents/litre on diesel and other aviation fuels.

What it means for you: If you fill up regularly, budget for roughly 10-11 cents more per litre starting the week of September 8 — before any other price movement from oil markets.

The Real Math: Excise Tax Plus Sales Tax

The jump isn't a flat 10 cents, because GST or HST applies on top of the excise tax — so when the excise tax returns, the sales tax portion on it returns too. In GST-only provinces, that pushes the effective increase to about 10.5 cents/litre. In HST or QST provinces, it's closer to 11.3 to 11.5 cents/litre. Fuel-price analyst Dan McTeague has estimated the same range: roughly 10 to 11 cents per litre once the tax returns.

Tank size	Before Sept. 8 (~$1.78/L)	After Sept. 8 (~$1.89/L)	Extra cost per fill-up
45 L (compact car)	$80.10	$85.05	+$4.95
60 L (mid-size sedan)	$106.80	$113.40	+$6.60
80 L (SUV/crossover)	$142.40	$151.20	+$8.80
120 L (pickup truck)	$213.60	$226.80	+$13.20

Estimates based on the national average price of $1.78/L (CAA, Aug. 25, 2026) plus an ~11-cent/litre post-holiday increase, applied evenly. Your actual increase will depend on your province's sales tax treatment and local pump prices.

For someone filling a mid-size car once a week, that's roughly an extra $26-30 a month, or over $300 a year, if pump prices otherwise held steady.

The Twist: A Second Price Move Right Behind It

Here's the part worth knowing before you panic-fill your tank on September 7: the jump may not stick around at full strength. Refineries begin their annual switch to cheaper winter-grade gasoline blends later in September, and McTeague estimates that transition could shave roughly 8 to 9 cents per litre back off prices. In other words, drivers may see a sharp bump in the first week of September, followed by a partial pullback within a few weeks as winter-grade fuel works through the supply chain.

That's not a reason to skip the September 8 reality, though — it just means the worst of the increase is likely to be short-lived rather than permanent.

Could the Holiday Be Extended?

It's not entirely settled. A federal minister overseeing the Canada Revenue Agency has said Canadians are raising the issue during pre-budget consultations ahead of the fall budget, and that whether to extend the holiday remains under review as part of a broader affordability package — but no extension has been announced as of this writing. Treat September 8 as the effective date until Ottawa says otherwise.

What to Actually Do About It

• Top up before Sept. 8 if you're close to empty anyway. There's no need to make a special trip, but if you're already planning to fill up in early September, doing it a day or two earlier avoids the higher rate.
• Don't overreact with a big stockpile fill-up. The gap is roughly 10-11 cents a litre — worth a few dollars per tank, not worth detouring across town or filling up cans in your garage.
• Expect the increase to ease within weeks. The winter-blend transition typically brings some relief, so budget for a temporary spike rather than a permanent one.
• If you drive for work or have a long commute, adjust your monthly budget now rather than getting caught off guard by the first September fill-up.

Bottom line: The federal gas tax holiday ends September 7. Expect pump prices to rise roughly 10-11 cents a litre on September 8, adding a few dollars to every fill-up — but a seasonal winter-fuel price drop later in the month should soften the blow within weeks.