Gas tax: Why Canadians are paying more at the pump in some provinces

Gas prices are displayed at the corner of Wellington and Exeter Roads in London, Ont., on Monday, July 27, 2026. Photo by Geoff Robins /Postmedia

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As gas prices remain stubbornly high across Canada, gas taxes at both the federal and provincial level vary from high to non-existent, as groups like the Canadian Taxpayers Federation (CTF) call for relief.

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A Nova Scotia flashpoint

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The CTF is calling on Nova Scotia Premier Tim Houston to suspend the province’s gas tax amid continued high prices at the pumps. This comes as several other provinces as well as the federal government have enacted full or partial rollbacks on gasoline taxes.

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The CTF notes that the Nova Scotia gas tax amounts to 15.5 cents per litre on gasoline, the highest in Atlantic Canada. “Houston has never cut it,” Devin Drover, CTF’s Atlantic Director and General Counsel, told National Post by email.

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He added: “The government has never given a real reason. When affordability comes up, the Houston government points to its one-point HST cut, but it has never touched the 15.5-cent-per-litre provincial gas tax.”

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National Post has reached out to the premier’s office for comment.

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Suspending the provincial gas tax would save Nova Scotians almost $10 on a 64-litre minivan fill-up, according to the CTF.

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Drover said the fuel tax brings in about $297 million a year, per the province’s own budget estimates  “A four-month suspension like P.E.I.’s would run roughly a third of that, about $100 million.”

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Alberta takes a three-month break

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Last month, Alberta Premier Danielle Smith announced that her government would eliminate its fuel tax for three months to help fight costs. The cut took effect yesterday, Oct. 1, and amounts to a 13-cent-a-litre savings on gasoline and diesel fuel.

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“Every fill-up will cost Alberta families and businesses less,” Smith said last week at a speech to the Calgary Chamber of Commerce.

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In June she opted to keep the tax but instead invited Albertans to apply for a $100 affordability cheque, available for households making less than $225,000. But Smith admitted the program was not well received, noting: “We have to be willing to take criticism and adjust and change course.”

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Ontario, Newfoundland make change permanent

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Newfoundland and Labrador had cut its provincial gas tax by 8.05 cents per litre in June 2022, and this year passed legislation to make that decrease permanent, a move applauded by the Retail Council of Canada. It keeps the province’s gasoline taxes at 7.5 cents per litre of gas and 9.5 cents for diesel.

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Ontario made a similar move in the same timeframe, cutting taxes on a gas by 5.7 cents and on diesel by 5.3. The rate is now nine cents per litre for both.

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P.E.I.’s temporary rollback

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Prince Edward Island, meanwhile, has announced a four-month hiatus on gasoline taxes. The cut took effect Sept. 26 and lasts until Jan. 31, 2027. The change saves Islanders 8.47 cents per litre on gasoline and 14.15 cents per litre on diesel until then.