Canada enacted the Canadian Fuel Affordability Act, which extends the suspension of the federal fuel tax until January 31, 2027, with savings of 2.9 billion Canadian dollars. Agricultural producers are demanding a 50-cent-per-litre rebate on diesel.
Canada's federal government enacted on October 29 the Canadian Fuel Affordability Act, which extends the suspension of the federal fuel excise tax until January 31, 2027. The measure maintains savings of 10 cents per litre on gasoline and unleaded aviation gasoline, 11 cents per litre on leaded aviation gasoline and 4 cents per litre on diesel.
"Extending this relief will help lower everyday costs while supporting truckers and businesses in the food, agriculture, housing, construction, delivery and aviation sectors," the government said on October 29. The tax relief had been promised in September.
The full benefit will be maintained until the end of January. From February 1 to March 31, 2027, federal fuel excise taxes will be applied at 50% of their normal levels and, from April 1, 2027, they will be fully restored.
The extension of the relief, which began in April, will generate additional savings of 2.9 billion Canadian dollars for Canadians, according to the federal government. "This is about making life more affordable and keeping our economy moving in a more uncertain world," said Finance Minister Francois-Philippe Champagne.
High fuel prices affect all Canadians and, in particular, agricultural producers, who this fall paid near-record prices for diesel during the 2026 harvest. Daryl Fransoo, who farms in Glaslyn, Saskatchewan, said his diesel expenses doubled during the fall harvest compared with 2025.
Producers across the country could be spending an additional 16,800 dollars just to operate one combine in 2026, according to Grain Growers of Canada. That is why the association sent a letter to the federal government in early October requesting a 50-cent-per-litre rebate on diesel purchased for agricultural uses.
"At the proposed rebate rate of 50 cents per litre, relief on 16,800 litres would total 8,400 dollars. In this example, the rebate would offset half of the additional fuel cost," the letter says.
Other countries, including the United States, are compensating producers for the exceptional cost of diesel in 2026. Less than two weeks ago, U.S. President Donald Trump announced the Harvest Fuel Relief program, worth 8 billion dollars.
Fransoo does not support government intervention in the markets, but said diesel prices have been incredibly high and are causing economic harm. "At some point you have to help Canadian producers remain competitive," he said. "There are many precedents here (in other countries)."
