Ottawa suspends federal fuel excise tax until Labour Day amid rising global energy prices

The federal government will suspend excise taxes on gasoline and diesel until Labour Day, Prime Minister Mark Carney announced Tuesday, citing rising global energy costs linked to conflict in the Middle East.

Speaking on Parliament Hill, Carney said the temporary measure will take effect Monday and is expected to reduce the price of regular gasoline by about 10 cents per litre and diesel by about four cents per litre. He described the move as a “responsible, temporary measure” aimed at easing cost pressures on households and businesses.

According to the Prime Minister’s Office, the tax relief is also intended to support sectors with high transportation costs, including trucking and logistics, as fuel prices continue to climb.

The decision does not go as far as proposals from the Conservative party, which has called for fuel tax cuts to remain in place for the rest of the year and for some energy-related levies to be permanently eliminated.

Fuel prices have increased globally in recent months, driven in part by instability in the Middle East. U.S. President Donald Trump said Monday that American forces had begun a blockade of Iranian ports as part of efforts to pressure Tehran over access to the Strait of Hormuz.