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%
Provincial Sales Tax (PST or HST) (1)
Ontario 13% 13% 13% 13%
Quebec Sales Tax (QST) 9.975% 9.975% 9.975% 9.975%
Nova Scotia (2), Newfoundland and Labrador, New Brunswick and 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    
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)

6.73 8.03 4.62 $1.517/GJ

British Columbia – Vancouver Area (5)

25.5 26.0 2.7  

British Columbia – Victoria Area (5)

20.00 26.00 2.7  

British Columbia – Rest of province (5)

14.50 15.00 2.7  

British Columbia – Carbon Tax (5)

7.78 8.95 5.39 $1.7381/GJ (6.65cents/m3)
Yukon 6.2 7.2    
Northwest Territories (6) 10.7/6.4 9.1    
Nunavut (6) 6.4 9.1    

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 increased or reduced by varying amounts depending on location. An increased tax rate applies to gasoline delivered in the area of jurisdiction of the Autorité régionale de transport métropolitain (ARTM) and in the Gaspésie–Îles-de-la-Madeleine administrative region (RAGIM). A decreased tax rate applies 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, and the federal excise tax. More information is available on Revenu Quebec’s website at https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/ca-1-v/.

4. Alberta carbon tax effective Jan 1, 2017. Rates increased to $30/tonne on Jan. 1, 2018 (Natural Gas = $1.517/GJ.

5. British Columbia has varying taxes based on location. Taxes include dedicated motor fuel tax, provincial motor fuel tax, and a carbon tax. More information is available on the Government of British Columbia’s website at https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/motor-fuel-carbon-tax#motor-fuel-tax.

6. In the Northwest Territories, 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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