Fuel Consumption Levies 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 direct or indirect government levies. Depending on where you live, you may pay a federal, provincial and a municipal tax on these products, as well as a federal fuel charge.
How are fuels taxed?
There are different types of taxes on transportation and heating fuel:
The federal government charges an excise tax at a flat rate of 10 cents per litre on gasoline (in effect at that rate since 1995) and 4 cents per litre on diesel (in effect at that rate since 1987). Furnace oil is exempt from this tax and there is no federal excise tax on natural gas or propane.
Provincial governments also collect gasoline and diesel taxes and these vary considerably by province. Lastly, three municipalities in Canada (Vancouver, Victoria and Montreal) also apply taxes on gasoline.
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, applicable federal and provincial carbon levies, 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).
|Federal and Provincial Consumption Taxes on Petroleum Products|
|Furnace Oil/ Natural Gas (for heating)|
|Excise Tax (Cents/Litre)||10.0||4.0||-||-|
|Goods and Services Tax||5%||5%||5%||5%|
|Provincial Sales Tax (PST or HST) (1)|
|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 (Cents/Litre)|
|Newfoundland and Labrador||16.5||16.5||7.0|
|Prince Edward Island||8.47||14.15|
|British Columbia – Vancouver Area (4)||27.00||27.50||2.7|
|British Columbia – Victoria Area (4)||20.00||20.50||2.7|
|British Columbia – Rest of province (4)||14.50||15.00||2.7|
|Northwest Territories (5)||10.7/6.4||9.1|
|Federal and Provincial Carbon Levies|
|Alberta||6.63||8.05||4.64||$1.5342/GJ (5.87 - cents/m3)|
|British Columbia||8.89||10.23||6.16||$1.9864/GJ (7.60- cents/m3)|
|Manitoba||6.63||8.05||4.64||$1.5342/GJ (5.87 - cents/m3)|
|New Brunswick||6.63||8.05||4.64||$1.0219/GJ (3.91 - cents/m3)|
|Newfoundland and Labrador||4.42||5.37||3.1||$1.0219/GJ (3.91 - cents/m3)|
|Nova Scotia (6)||0.94||1.2||1||$0.3136/GJ (1.2 - cents/m3)|
|Ontario||6.63||8.05||4.64||$1.5342/GJ (5.87 - cents/m3)|
|Prince Edward Island||6.63||8.05||0||0|
|Quebec (7)||4.92||6.26||2.3||$1.487195/GJ (5.69 - cents/m3)|
|Saskatchewan||6.63||8.05||4.64||$1.5342/GJ (5.87 - cents/m3)|
|Northwest Territories (8)||4.7||5.5||3.1||$0.9932/GJ (3.8 - cents/m3)|
|Nunavut (8)||6.63||8.05||4.64||$1.5342/GJ (5.87 - cents/m3)|
|Yukon (8)||6.63||8.05||4.64||$1.5342/GJ (5.87 - cents/m3)|
Rates in the above table were last updated on April 1, 2020
- Where the HST is in place, the federal portion of the tax is 5%.
- Nova Scotia has a point of sale tax rebate of the provincial portion of the HST (10%) on furnace oil.
- 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 Région administrative de la Gaspésie-Îles-de-la-Madeleine (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.
- 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.
- In the Northwest Territories, gasoline is taxed at 6.4 cents per litre in communities not served by a highway system.
Federal Fuel Charge
In addition to the taxes described above, a federal fuel charge applies in some provinces and territories.
As of April 1st, 2019, the federal fuel charge has applied in Saskatchewan, Ontario, and Manitoba. It also applied in New Brunswick from April 1, 2019 to March 31, 2020.
In addition, the federal fuel charge began applying in Yukon and Nunavut on July 1, 2019 and in Alberta on January 1, 2020.
The fuel charge rates reflect a carbon pollution price of $20 per tonne of carbon dioxide equivalent (CO2e) in 2019, rising by $10 per tonne annually to $50 per tonne in 2022. For more information on fuel charge rates, please visit the Canada Revenue Agency webpage at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/fcrates/fuel-charge-rates.html
Taxes and the fuel charge are applied in the following order:
- consumption and excise taxes (municipal, provincial and federal),
- federal fuel charge and provincial carbon taxes, and
- the GST/HST are calculated and added onto the sum from steps 1 and 2.
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