Avgas Tax Holiday Extends Through January in Canada

Leaded avgas remains exempt from an 11-cent-per-liter federal excise tax before rates begin returning in February.

Avgas Tax Holiday Extends Through January in Canada
[Credit: ANDY_GK | Shutterstock]
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Key Takeaways:

  • Canada has extended its temporary federal fuel excise tax suspension on aviation fuels until January 31, 2027, maintaining a zero tax rate.
  • This suspension provides savings of 10-11 cents per liter on avgas and 4 cents per liter on other aviation fuels, contributing to an estimated $2.9 billion in additional tax relief.
  • The tax will gradually return, starting with half its normal rate on February 1, 2027, and full rates are scheduled to resume on April 1, 2027.
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Canada has extended its temporary federal fuel excise tax suspension through Jan. 31, 2027, keeping the tax at zero on leaded and unleaded aviation gasoline as well as other aviation fuels. Under a government announcement Thursday, the suspension saves 11 Canadian cents per liter on leaded avgas, 10 cents per liter on unleaded avgas and 4 cents per liter on other aviation fuel.

Rates Return in February

The tax will begin returning Feb. 1 at half of its normal rate. Through March 31, Canada will collect 5.5 cents per liter on leaded avgas, 5 cents on unleaded aviation gasoline and 2 cents on other aviation fuel. Full rates are scheduled to return April 1 under the government’s draft amendments.

The aviation fuel exemption is part of a broader tax holiday covering gasoline and diesel. Canada estimates the latest extension will add about $2.9 billion in tax relief and bring the program’s total estimated relief during the 2026-27 fiscal year to $5.3 billion.

Tax Holiday Began in April

Canada originally announced the suspension in April after disruptions related to the Middle East conflict drove up global oil prices. The initial tax plan took effect April 20 and was scheduled to expire Sept. 7. Federal excise taxes are generally collected from manufacturers or wholesalers and incorporated into the retail price of fuel.

The suspension was later incorporated into Bill C-30, which implements measures from Canada’s Spring Economic Update. The measure received Royal Assent June 19 and temporarily eliminated the federal excise tax on aviation fuels alongside the gasoline and diesel reductions, according to the Finance Department.

Matt Ryan

Matt is AVweb's lead editor. His eyes have been turned to the sky for as long as he can remember. Now a fixed-wing pilot, instructor and aviation writer, Matt also leads and teaches a high school aviation program in the Dallas area. Beyond his lifelong obsession with aviation, Matt loves to travel and has lived in Greece, Czechia and Germany for studies and for work.
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