Fuel tax pause offers bigger break to higher-income families: Budget watchdog

OTTAWA — The parliamentary budget officer says Ottawa’s gas tax pause is offering a bigger break at the pumps to the households that earn the most.

The federal government temporarily suspended the federal excise tax on gasoline, diesel and jet fuel in April, then announced last month it would extend that pause into 2027.

Read more:

• Conservative motion seeking more diesel relief defeated in House of Commons
• Farms and Fuels Alliance calls for changes to Clean Fuel Regulations by year’s end
• Oil and gas emissions dropped in 2025 despite increased production: report

In a new report, Ottawa’s budget watchdog says the total pause will save the average family $276 over the year or so it’s in place.

But the report says those savings are greater for families in higher tax brackets, while households in the lowest income quintile can expect to save just half the average.

While fuel costs often make up a bigger share of lower-income families’ total budgets, households that earn more also typically spend more at the pumps.

A spokesperson for Finance Minister François-Philippe Champagne says the fuel tax pause is a blanket measure that offers savings to all Canadians based on how much they drive, while initiatives like the Groceries and Essentials Benefit are intended for low-income families.

This report by The Canadian Press was first published Oct. 8, 2026.

Craig Lord, The Canadian Press