Drivers across Durham Region could continue seeing federal fuel-tax relief into early 2027, with Ottawa expected to extend the temporary suspension beyond Labour Day.
The federal gas tax holiday would keep the federal excise tax on gasoline and diesel at zero until January 31, 2027, according to multiple reports citing government sources. The measure had been scheduled to expire after September 7, which would have restored the federal tax on September 8.
The federal government suspended the excise tax earlier this year as fuel prices climbed amid disruptions in global energy markets. Under the temporary measure, the federal excise tax was reduced from 10 cents per litre to zero on gasoline and from four cents per litre to zero on diesel.
For motorists in Oshawa, Whitby, Ajax, Pickering, Clarington, Uxbridge, Scugog and Brock, the extension would mean that the scheduled federal tax increase would not take effect immediately after the Labour Day weekend.
Finance Minister François-Philippe Champagne was scheduled to make an affordability announcement in Ottawa at 1:30 p.m. on Wednesday, September 2. The Department of Finance said the announcement would form part of the government’s efforts to lower everyday costs for Canadian families and businesses.
What the extension means for Durham drivers
The federal gas tax holiday does not guarantee that pump prices will remain unchanged. Retail gasoline and diesel prices can still rise or fall because of crude oil prices, refining costs, wholesale markets, transportation expenses, provincial taxes and other factors.
However, keeping the federal excise tax suspended removes the planned return of 10 cents per litre on gasoline and four cents per litre on diesel for the duration of the extension.
That could be significant for Durham residents who regularly commute across the region or into Toronto, as well as local businesses that depend heavily on vehicles, delivery fleets or diesel-powered equipment.
The existing tax suspension was introduced in April as the federal government responded to rising fuel costs. Department of Finance documents stated that the measure would remain in place through September 7 and was expected to provide more than $2.4 billion in tax relief nationally during 2026.
Political debate continues over fuel costs
The proposed extension comes amid continued political pressure over the cost of gasoline, groceries and other household expenses.
Conservative Leader Pierre Poilievre had called on Prime Minister Mark Carney’s government to prevent the federal fuel tax from returning after Labour Day. Ontario Premier Doug Ford has also publicly supported extending the relief and has called for a longer-term reduction.
Supporters of the measure argue that keeping the tax suspended gives households and businesses immediate relief at the pump. Critics have argued that broad fuel-tax reductions are less targeted than income-based support and may provide larger benefits to households that consume more fuel.
For Durham residents, the immediate issue is the timing of the scheduled tax return. If the reported extension proceeds as expected, the federal excise tax would remain suspended through January 31, 2027.
The federal gas tax holiday would therefore continue through the fall and most of the winter, giving local drivers several more months before the federal levy is scheduled to return.
Residents should still expect fuel prices to fluctuate with broader energy-market conditions, but the reported extension means the previously planned post-Labour Day federal tax increase is not expected to happen.
