After months of calls to do so, the Alberta government announced Tuesday it will pause the provincial fuel tax on gasoline and diesel.
The tax is 13 cents a litre on gasoline and diesel, the province said. The suspension begins Oct. 1 and will last until the end of the year.
Under Alberta’s relief program, quarterly reductions to the provincial fuel tax are introduced when the price of the American benchmark crude oil, West Texas Intermediate, averages at least US$80 per barrel over a review period of 20 trading days.
The average price of WTI during the last review period from Aug. 18 to Sept. 15 was $90.54, the Alberta Ministry of Finance said.
Global oil prices have been volatile for much of 2026, after jumped in the weeks after war broke out at the end of February between the United States and Israel with Iran, and when the Strait of Hormuz — a critical passageway for oil transports — was mostly blocked.
The province’s announcement comes the same day Ottawa also said its suspension of the federal fuel excise tax would be extended until the end of January 2027 under proposed new legislation.
When it was first suspended in April, Prime Minister Mark Carney said the suspension would remove up to $0.10 per liter on gasoline and $0.04 per liter on diesel fuel.
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Average gas prices across Canada recently have been around $1.82 per litre.
They reached that level last weekend in Alberta, where drivers normally enjoy lower prices than the rest of the country due to the province’s proximity to resource extraction and refining. As of Sept. 21, the province said the retail gas prices in Alberta had averaged at 175.5 cents/litre.
Albertans have been calling on the UCP government to suspend the fuel tax for half a year but until now, the province has resisted doing so.
“The premier refused to follow her own legislation,” said Naheed Nenshi, leader of the Opposition NDP, who was amongst those calling for the suspension since the spring. “She refused to give Alberta families a break and help them get to work and take their kids to soccer practice. She said her own legislation was flawed.”
Instead in June, Premier Danielle Smith announced a $100 cash rebate in lieu of the province reducing its tax on gasoline at the pumps.
SO far, provincial numbers show about 1.4 million people have either applied or received their $100, out of 3.4 million eligible Albertans.
“It just didn’t work for a lot of people,” said Kris Sims with the Canadian Taxpayers Federation. “Plus some people have to drive more, or they have to commute, or they have a business or something so a $100 rebate wasn’t cutting it.”
Alberta Finance Minister Jason Nixon admits fault with the program, when speaking about making the switch to trigger the tax suspension.
“(It) did not work the way I was satisfied with and I know our government was not satisfied with, “Nixon said on Tuesday. “We heard from Albertans that it was quite a challenge to interact with that system, so this is the direction we’re going to go.”
The opposition accused the government of timing the tax relief to their political advantage.
“Now that the UCP has lost a by-election in Calgary, and Danielle Smith’s party is splintering because it’s overrun with separatists, the premier is desperately backtracking,” Nenshi said in a statement on Wednesday.
“Gas tax relief is a good thing, but it should have been done months ago when families needed it, not when the premier needs it.”
Alberta last suspended its fuel tax for six months at the beginning of 2023 to help residents with costs due to pandemic-related inflation. The discount was extended to the end of that year before being reinstated Jan. 1, 2024, as energy prices softened.
The province said Tuesday it will continue monitoring oil prices throughout the next quarterly review period and if the average WTI oil prices exceed the threshold, “will determine the best options to ensure relief reaches Albertans.”
The province’s fuel tax rates for gas and diesel are reviewed every three months on Jan. 1, April 1, July 1 and Oct. 1.
To ensure fuel tax savings are passed onto drivers, the province said it will be monitoring pump prices for any wrongdoing and “will take action against businesses that price gouge at the pumps.”
Businesses found guilty of price gouging can be fined by the courts up to $300,000 or receive up to two years of jail time, the government said.
Fat Nenshi and his NDP clowns never like seeing taxes suspended. They believe it is a requirement for all peasants to always pay and pay. Except party members and union leaders, of course
Well one thing about Smith she does listen to the people, they demanded a gas tax cut and she gave it to them. Even though according to Stats Canada average driver the $100 was a better deal.
I fill up my gas tank every two weeks. 100 litres at 13 cents is $13 a tank full. I am going to be rich. I think I will splurge and buy the expensive macaroni and cheese!
UCP vote buying, plain and simple.
Another attempt to “buy” votes.
Oh look more vote buying that will accomplish much of nothing. For this that drive a lot yes they will see a minimal benefit and for those that don’t drive much will see no benefit. Mean while food price will continue to go up and inflation will continue to rise.
How about a 2 percent decrease in personal income tax and a 2 percent decrease in the provincial part of property taxes that stay for a few years instead of vote buying scheme that this is!
The prices at the pumps change every 10 minutes. Will anyone notice?