Fuel Consumption Taxes in Canada

A portion of the final price you pay at the pump for gasoline and other fuels goes to various levels of government in the form of taxes. Depending on where you live, you pay a federal, provincial and, in some cases, a municipal tax on these products.

How is gasoline taxed?

There are two types of taxes on gasoline:

Fixed taxes

The federal government charges an excise tax at a flat rate of 10 cents per litre on gasoline (in effect since 1995) and 4 cents per litre on diesel (in effect since 1987). Furnace oil, natural gas and propane are exempt from this tax.
Provincial governments also collect gasoline taxes and these vary considerably by province. Lastly, three municipalities in Canada (Vancouver, Victoria and Montreal) also apply taxes on gasoline.

Sales taxes

This tax is based on a percentage of the retail price, a method known as ad valorem. The federal GST/HST is charged on crude oil, refining and marketing costs and margins, the federal excise tax and provincial road taxes. Provincial sales taxes do not apply to fuels such as gasoline or diesel, except where they have the harmonized sales tax (HST) and in Quebec (QST).

Current Fuel Tax Rates

Federal and Provincial Consumption Taxes on Petroleum Products
(In Cents/Litre or in %, as indicated)
  Gasoline Diesel Propane
(motor vehicle)
Furnace Oil/ Natural Gas   (for heating)
Federal Taxes
Excise Tax 10.0 4.0 - -
Goods and Services Tax 5% 5% 5% 5%
OR:
Harmonized Sales Taxes (1)
Ontario 13% 13% 13% 13%
Nova Scotia (2), Newfoundland and Labrador and New Brunswick 15% 15% 15% 5%
Prince Edward Island 15% 15% 15% 5%
Provincial Fuel Taxes
Newfoundland and Labrador 33.0 21.5 7.0  
Prince Edward Island 13.1 20.2    
Nova Scotia 15.5 15.4 7.0  
New Brunswick 15.5 21.5 6.7  
Quebec (3)  19.2 20.2    
Quebec Sales Tax (QST) 9.975% 9.975% 9.975% 9.975%
Ontario 14.7 14.3 4.3  
Manitoba 14.0 14.0 3.0  
Saskatchewan 15.0 15.0 9.0  
Alberta 13.0 13.0 9.4  

Alberta Carbon Tax (4)

4.49 5.35 3.08 $1.011

British Columbia plus Carbon Tax (5)

14.5 15.0 2.7  
6.67 7.67 4.62 7.67/5.70*
Yukon 6.2 7.2    
Northwest Territories (6) 10.7/6.4 9.1    
Nunavut (6) 10.7/6.4 9.1    
Transportation Taxes
(in addition to federal and provincial taxes)
Montréal (3) 3.0      
Vancouver (5) 11.0 11.0    
Victoria (5) 3.5 3.5    

Notes:

1. Where the HST is in place, the federal portion of the tax is 5%. GST or HST applies to the retail price before GST/HST.

2. Nova Scotia has a point of sale tax rebate of the provincial portion of the HST (8%) on furnace oil.

3. In Quebec, gasoline, diesel and propane taxes are reduced by varying amounts in certain remote areas and within 20 kilometres of the provincial and U.S. borders. The Quebec provincial sales tax (QST) applies to all petroleum products at a rate of 9.975%. The QST is calculated on the retail price, which includes the Quebec per litre tax, federal excise tax and an urban tax of 3.0 cents per litre that is also added to gasoline sold in Montréal and surrounding municipalities.

4. Alberta carbon tax effective Jan 1, 2017. Carbon tax rate on Natural Gas is $1.011/GJ

5. British Columbia applies a carbon tax on all fuels. In the Greater Vancouver and Victoria areas, there are additional transportation taxes of 11.0 and 3.5 cents per litre, respectively, on gasoline and diesel. More information is available on the Government of British Columbia’s website at http://www.sbr.gov.bc.ca/business/Consumer_Taxes/consumer_taxes.htm.
* Carbon tax rate on Natural Gas is 5.70 cents per cubic meter

6. In the Northwest Territories and Nunavut, gasoline is taxed at 6.4 cents per litre in communities not served by a highway system.

Notes:

The order in which taxes are applied is as follows: a) consumption and excise taxes (municipal, provincial and federal) are added to the ex-tax price, then b) the GST/HST are calculated and added onto the sum from a).

 

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