Fuel Consumption Taxes and 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 taxes and levies. Depending on where you live, you pay a federal, provincial and, in some cases, a municipal tax on these products.
How are fuels taxed and levied?
There are different types of taxes and levies 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 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.
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).
On April 1st, 2019, the federal government implemented a carbon pricing system in provincial jurisdictions that do not have a carbon pricing system that aligns with the federal benchmark. The federal government fuel levy will apply in Saskatchewan, Ontario, Manitoba, and New Brunswick. The fuel charge levies 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.
Fuel levy rates will also begin to apply in Yukon and Nunavut in July 2019. For more information on fuel charge rates, please visit the Department of Finance webpage.
Current Fuel Taxes and Levies (Last updated April 1, 2020)
|Federal and Provincial Consumption Taxes on Petroleum Products
(In Cents/Litre or in %, as indicated)
|Furnace Oil/ Natural Gas (for heating)|
|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|
|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)|
- 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.
- 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 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.
- 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.
- Nova Scotia operates under a provincial Cap-and-Trade program, the figures listed in the table are estimated costs
- Quebec operates under a provincial Cap-and-Trade program, the figures listed in the table are estimated costs
- A charge applied to fossil fuels, generally paid by registered distributors (fuel producers and distributors), as set out in the Greenhouse Gas Pollution Pricing Act, Part 1, will start applying in July 2019.
The order in which taxes are applied is as follows:
- consumption and excise taxes (municipal, provincial and federal) are added to the ex-tax price, and
- the GST/HST are calculated and added onto the sum from step 1.
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