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Motor fuel taxes in Canada

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In Canada, motor vehicles are primarily powered by gasoline or diesel fuel. Other energy sources include ethanol, biodiesel, propane, compressed natural gas (CNG), electric batteries charged from an external source, and hydrogen. Canada, like most countries, has excise taxes and other taxes on gasoline, diesel, and other liquid and gas motor fuels (collectively called fuel taxes), and also taxes electricity at various administrative levels. Most provinces and territories in Canada also have taxes on these motor fuels, and some metropolitan areas such as Montreal, Greater Vancouver, and Victoria impose additional taxes.

Additionally, Canada's federal (national) government collects value-added tax (GST) across the country, and some provincial governments also collect a provincial sales tax (PST), which may be combined with the GST into a single harmonized sales tax (HST). HST, GST, or GST + PST where applicable, are calculated on the retail price including the excise taxes.[1]

Fuel tax rates across Canada

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Gasoline

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Gasoline Fuel Taxes by Province/Territory (cents per litre) (Effective April 1, 2024)
Government Federal Excise Tax (CAD¢/L) [2] Prov/Terr Excise Tax (CAD¢/L) Fed
Carbon tax (CAD¢/L) [3] 		Local Fuel Levy (CAD¢/L) Total Pre-Sales tax (CAD¢/L) HST, GST, or GST + PST/QST
(%) 		Minimum tax incl. sales taxes
(CAD¢/L) 		Min. tax
(CAD$/US gal)
Canada (average) 10 10.33 16.26 38.69 9.68% 42.31 159.94
Newfoundland and Labrador 10 14.50 [4] 17.61 42.11 15% 48.43 183.05
Prince Edward Island 10 8.47 [5] 17.61 36.08 15% 41.49 156.84
Nova Scotia 10 15.50 [6] 17.61 43.11 15% 49.58 187.40
New Brunswick 10 10.87 [7] 17.61 38.48 15% 44.25 167.27
Quebec[nb 1] 10 19.20 [8] 29.20 14.975% 33.57 126.90
Montréal, QC 10 19.20 [8] 3 [9] 32.20 14.975% 37.02 139.94
Ontario 10 9.0 [10] 17.61 36.61 13% 41.37 156.38
Manitoba 10 0[11] 17.61 27.61 12% 30.92 116.89
Saskatchewan 10 15 [12] 17.61 42.61 5% 44.74 169.12
Alberta 10 13 [13] 17.61 40.61 5% 42.64 161.18
British Columbia[nb 2] 10 7.75 [14] 17.61 6.75 [14] 42.11 5% 44.22 167.13
Vancouver, BC 10 1.75 [14] 17.61 6.75 + 18.5 [14] 54.61 5% 57.34 216.75
Victoria, BC 10 7.75 [14] 17.61 6.75 + 5.5 [14] 47.61 5% 49.99 188.96
Yukon 10 6.20 [15] 17.61 33.81 5% 35.50 134.19
Northwest Territories 10 10.70 [16] 17.61 38.31 5% 40.23 152.05
Nunavut 10 6.40 [17] 17.61 34.01 5% 35.71 134.99

Diesel

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Diesel Fuel Taxes by Province/Territory (Effective April 1, 2024 )
Government Federal Excise Tax (CAD¢/L) [2] Prov/Terr Excise Tax (CAD¢/L) Fed
Carbon tax (CAD¢/L) [3] 		Prov
Carbon tax (CAD¢/L) 		Local Fuel Levy (CAD¢/L) Total Pre-Sales tax (CAD¢/L) HST, GST, or GST + PST/QST
(%) 		Minimum tax incl. sales taxes
(CAD¢/L) 		Min. tax
(CAD$/US gal)
Canada (average) 4 11.34 19.87 37.04 9.87% 40.75 144.24
Newfoundland and Labrador 4 16.50 [4] 21.39 41.89 15% 48.17 170.53
Prince Edward Island 4 14.15 [5] 21.39 39.54 15% 45.47 160.97
Nova Scotia 4 15.40 [6] 21.39 40.79 15% 46.91 166.06
New Brunswick 4 15.45 [7] 21.39 40.84 15% 46.97 166.26
Quebec 4 20.20 [8] 24.20 14.975% 27.82 98.50
Ontario 4 14.30 [10] 21.39 39.69 13.000% 44.85 158.77
Manitoba 4 14 [18] 21.39 39.39 13% 44.51 157.57
Saskatchewan 4 15 [12] 21.39 40.39 12% 45.24 160.14
Alberta 4 13 [13] 21.39 38.39 5% 40.31 142.70
British Columbia[nb 2] 4 2.25 [14] 16.85 6.75 [14] 29.85 5% 31.34 110.95
Vancouver, BC 4 2.25 [14] 16.85 6.75 + 18.5 [14] 49.35 5% 51.82 183.43
Victoria, BC 4 2.25 [14] 16.85 6.75 + 5.5 [14] 37.35 5% 39.22 138.83
Yukon 4 7.20 [15] 21.39 32.59 5% 34.22 121.14
Northwest Territories 4 9.10 [16] 13.7 26.80 5% 28.14 99.62
Nunavut 4 9.10 [17] 21.39 34.49 5% 36.21 128.20

Notes

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  1. ^ Excluding Montreal.
  2. ^ a b Excluding Greater Vancouver and Greater Victoria

Tax collection and rate changes

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In March 2022, the Alberta government announced it would suspend the collection of the fuel tax starting April 1, as a way to fight the rising cost of fuel.[19]

In December 2023, the Alberta government announced that with lower oil prices, the fuel tax would be phased back in after Dec. 31, 2023.[20]

Tax revenues

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See also: Sales taxes in Canada

The Government of Canada collects about $5 billion per year in excise taxes on gasoline, diesel, and aviation fuel[21] as well as approximately $1.6 billion per year from GST revenues on gasoline and diesel (net of input tax credits). The Canada Revenue Agency, a part of the government, collects these taxes.

Collectively, the provincial governments collect approximately $8 billion per year from excise taxes on gasoline and diesel.

The federal taxes go into general coffers and help to fund a range of programs: $2 billion of the approximately $5 billion collected from federal excise taxes goes into the now permanent annual Gas Tax Fund for municipal infrastructure. Provincial tax revenues usually go to fund road repair and construction, and additionally in some provinces a portion of revenues (for example, 2 cents/litre in Ontario) is also distributed directly to municipalities.[22]

Criticism

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In Quebec, an Ipsos poll released in 2022 found that 73% of the population thought that the taxes levied on fuel were too high.[23]

See also

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References

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  1. ^ "Oil and Gas Prices, Taxes and Consumers". Department of Finance (Canada). July 2006. pp. 6b) Application of the GST. Archived from the original on 2007-11-20. Retrieved 2007-12-13.
  2. ^ a b Agency, Canada Revenue (2017-06-22). "Current Rates of Excise Taxes". www.canada.ca. Retrieved 2022-03-09.
  3. ^ a b Agency, Canada Revenue (2022-09-08). "Fuel Charge Rates". www.canada.ca. Retrieved 2023-12-22.
  4. ^ a b "Gasoline Tax". Finance. 22 July 2019. Retrieved 2022-03-09.
  5. ^ a b Toolkit, Web Experience (2017-03-14). "Gasoline Tax Rates". www.princeedwardisland.ca. Retrieved 2022-03-09.
  6. ^ a b "Nova Scotia Department of Finance - Tobacco & Fuel". www.novascotia.ca. Retrieved 2022-03-09.
  7. ^ a b Government of New Brunswick, Canada (2013-01-30). "Gasoline, Motive Fuel and Carbon Emitting Product Tax A basic overview of the taxation of gasoline, motive fuel and carbon emitting products". www2.gnb.ca. Retrieved 2022-03-09.
  8. ^ a b c "Fuel Tax Rates". Revenu Québec. Retrieved 2022-03-09.
  9. ^ "Table of Fuel Tax Rates in Québec, by Region" (PDF). Revenue Quebec. June 2017. Retrieved March 9, 2022.
  10. ^ a b "Gasoline Tax". www.fin.gov.on.ca. Retrieved 2023-01-01.
  11. ^ "Mixed feelings as Manitoba's gas tax holiday begins - Winnipeg | Globalnews.ca". CJOB. Retrieved 2024-01-04.
  12. ^ a b "Information Bulletin FT-1 The Fuel Tax and Road Use Charge Act" (PDF). SETS Saskatchewan eTax Services. October 1, 2021. Retrieved March 9, 2022.
  13. ^ a b "Fuel tax rates". Alberta. Government of Alberta. Retrieved 3 April 2024.
  14. ^ a b c d e f g h i j k l "Bulletin MFT-CT 005 Tax Rates on Fuels" (PDF). gov.bc.ca The official website of the Government of British Columbia. April 1, 2023. Retrieved December 21, 2023.
  15. ^ a b "Find current fuel tax rates in Yukon". yukon.ca. 2019-06-11. Retrieved 2022-03-10.
  16. ^ a b "Fuel tax rates english" (PDF). Government of Northwest Territories - Finance. Retrieved March 9, 2022.
  17. ^ a b "Nunavet Tax Rates 2022" (PDF). Government of Nunavet. January 1, 2022. Retrieved March 9, 2022.
  18. ^ "Taxation Division - Finance". Province of Manitoba - Finance. Retrieved 2022-03-09.
  19. ^ French, Janet (March 7, 2022). "Alberta to pause collection of provincial fuel tax to help consumers shocked by high prices". CBC news. Retrieved March 24, 2022.
  20. ^ "Pumped up: Alberta gas tax slated to return in January". Calgary. CBC News. 23 November 2023. Retrieved 21 December 2023.
  21. ^ "ARCHIVED - BACKGROUNDER – OIL AND GAS PRICES, TAXES AND CONSUMERS". Department of Finance Canada. October 2005. Retrieved 7 February 2013.
  22. ^ Ministry of Transportation. "Backgrounder - How municipalities benefit from provincial gas tax funding". Canada NewsWire. Government of Ontario, Canada. Archived from the original on 2014-03-14. Retrieved 2007-09-07.
  23. ^ QMI, Agence (17 March 2022). "Les Québécois préfèrent l'idée d'un pétrole "Made in Quebec"". Le Journal de Montréal. Retrieved 2022-03-24.
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