Canada is set to extend its suspension of the federal fuel excise tax into early 2027 as the war in Iran drives up energy costs, according to Bloomberg.
Prime Minister Mark Carney’s government is expected to announce the extension on Wednesday, with Finance Minister François-Philippe Champagne due to set out the details in Ottawa. The measure was due to expire on September 7.
The temporary tax break, introduced in April, removed 10 Canadian cents per litre from the federal levy on petrol and four cents from diesel. It also covers aviation fuel.
The relief was expected to cost the federal treasury about C$2.4 billion (£1.3 billion) and was designed to ease pressure on households and businesses facing higher transport and operating costs.
Canada’s Finance Department said the original suspension reduced the federal excise tax rate to zero from April 20 until Labour Day. The standard rates were due to return on September 8, at 10 cents per litre for petrol and four cents for diesel and most aviation fuel.
Bloomberg reported that the extension was confirmed by a senior government official who was not authorised to speak publicly. The announcement comes as crude prices remain about 30 per cent above their level before the conflict began.
Disruption to maritime traffic through the Strait of Hormuz has added to concerns over global energy supplies. The waterway previously carried roughly a fifth of the world’s oil and liquefied natural gas shipments.
