COVER STORY
Fuel-Tax Relief Is Heading Into 2027
Bill C-38 would keep the federal fuel excise tax fully suspended through 31 January 2027, then restore it in two stages. Here is what households and businesses should plan for now.
Bill C-38 maps a three-step return to full fuel excise rates
The federal government has introduced the Canadian Fuel Affordability Act to extend its temporary fuel excise tax relief. If enacted as drafted, the full suspension would continue for gasoline, aviation gasoline, diesel and aviation fuel until 31 January 2027.
Half of the regular rate would apply from 1 February through 31 March, before full rates return on 1 April. As of 28 September, the bill has completed second reading and is before the House of Commons Standing Committee on Finance. The extension is drafted to apply retroactively from 8 September 2026.
The proposed rate path
FUEL | THROUGH 31 JAN | 1 FEB - 31 MAR | FROM 1 APR |
|---|---|---|---|
Gasoline / unleaded aviation | 0 cents/L | 5 cents/L | 10 cents/L |
Leaded aviation gasoline | 0 cents/L | 5.5 cents/L | 11 cents/L |
Diesel / aviation fuel | 0 cents/L | 2 cents/L | 4 cents/L |
All rates shown are the Bill C-38 proposal and should be confirmed against the enacted law.
Planning Around the Fuel-Tax Extension
Status first: proposed, not enacted
Bill C-38 completed second reading on 22 September and is now at committee in the House of Commons. It has not yet received Royal Assent. Businesses should prepare forecasts using the proposed dates, but avoid treating them as final law.
What the relief covers
The temporary rate relief applies to:
Gasoline and unleaded aviation gasoline.
Leaded aviation gasoline.
Diesel fuel and aviation fuel.
The government estimates that a typical 50-litre gasoline fill-up saves more than $5 while the full suspension remains in place.
What it means for business
The measure is intended to reduce transportation and operating costs for truckers and businesses in food, agriculture, housing, construction, delivery and aviation.
Because the proposal changes the statutory excise rate rather than creating a business credit, there is no separate application. The benefit should flow through fuel pricing
Build a three-stage budget
Now through 31 January: full proposed suspension.
February and March: half of the regular rate.
From 1 April: full federal rates return.
Fleet budgets, delivery pricing and fuel-surcharge clauses should reflect both scheduled increases. The temporary relief should not be built permanently into margins.
Before issuing a long-term quote
Review fuel-surcharge and price-adjustment clauses.
Model the February and April rate changes.
Continue retaining ordinary fuel invoices.
Confirm enactment before relying on the extension.
BOTTOM LINE
The relief is meaningful and temporary.Model the step-up now, confirm the bill’s final status and avoid locking today’s lower fuel cost into long-term pricing.
This Week in Ontario Tax
Corporate Tax
CRA access can stall when corporate records are outdated
The CRA's 21 September business bulletin reminds corporations to update director and officer information whenever someone joins, leaves or changes residency or contact details.
The CRA uses those records to confirm who may act for a corporation. A mismatch can delay My Business Account access, representative authorizations and corporate tax information.
Update the corporate registry first. Allow 24 to 48 hours where the registry shares director changes with CRA. Officer information must always be sent directly to CRA. Online submissions through Represent a Client are generally processed within two weeks.
Personal Tax
CRA adds optional authentication for 2026 online returns
Beginning 22 February 2027, the CRA will introduce a new sign-in authentication step for online personal tax filings and adjustments. The step will be optional for 2026 returns.
NETFILE users may authenticate through their CRA account. EFILE preparers may authenticate themselves once per active session. First-time filers without a CRA account may still use NETFILE.
Before tax season, register or regain access, add a backup multi-factor authentication method, update personal information and confirm any representative authorization.
IMPORTANT DEADLINE
30 September 2026 | T2 returns for 31 March year-ends
A corporation with a 31 March 2026 tax year-end must file its T2 return by Wednesday, 30 September. The requirement applies even if no tax is payable. Include complete financial statements or GIFI and the required schedules. The balance was generally due 31 May, or 30 June for an eligible CCPC meeting the three-month conditions. Filing and payment remain separate obligations.
PROPOSAL STATUS TO WATCH | Bill C-38 remains before committee. Prepare forecasts now but confirm final filing and pricing positions after enhancement.
Tax Court Highlight
GERALD KOWARSKY TRUST v. THE KING, 2026 TCC 174
Dissolved on 30 December.
Tax year still ended 31
30 DEC wind up date 31 DEC tax year end
The issue
An alter ego trust was wound up on 30 December 2023. It argued that its taxation year ended when it ceased to exist, keeping it outside enhanced trust-reporting rules for taxation years ending after 30 December.
The Court's decision
The Tax Court rejected that position. Paragraph 249(1)(c) generally fixes a trust's taxation year as the calendar year, and dissolution did not create an early year-end.
The 2023 taxation year ended on 31 December.
The enhanced information reporting applied.
The late-filing penalty under subsection 162(7) was upheld.
The due-diligence defence failed in the circumstances.
Why the decision matters
Legal dissolution and tax closure are not necessarily the same event. A trust or another entity may still have a taxation year, return, information schedule or deadline after the final distribution or legal termination date.
Confirm the statutory year-end rather than assuming the dissolution date controls.
Map every final return, schedule, slip, election and payment deadline.
Retain records and authority needed for post-wind-up compliance.
Obtain advice before selecting a date near a reporting-rule transition.
Dissolved does not always mean done.
Action list
Model fuel costs through January, February-March and April onward.
Review fuel-surcharge clauses before issuing long-term quotes.
Check director and officer records before the next corporate filing.
Resolve CRA account access before the 2027 filing season.
File 31 March year-end T2 returns by 30 September.
Complete tax compliance planning before any trust wind-up.