What exactly are you paying for at the pump? Sure, there’s the cost of gasoline or diesel, and the sales tax is pretty clear, but other taxes also make up a large portion of your fuel costs. These embedded costs can make it hard to understand the full cost of fueling your vehicle.
This guide will help you understand the additional fees embedded in your next fuel up.
Federal Taxes
Federal Excise Tax
The Federal Excise Tax on gasoline is 10 cents per litre and 4 cents per litre on diesel. This flat rate has stayed consistent since it was introduced (1995 for gasoline; 1987 for diesel).
Federal Fuel Tax (aka. Federal Carbon Tax)
On April 1, 2024, the federal carbon tax increased from $65 to $80 per tonne of CO2 equivalent, which translates to approximately 17.61 cents per litre of gasoline and 21.39 cents per litre of diesel. This rate is scheduled to increase by $15 per tonne of CO2e each year until 2030.
Provinces and territories are allowed to implement their own carbon pricing system as long as they comply with the minimum requirements of the federal program.
Sources: (Canadian Gov) (Canadian Fuels Association)
GST/HST
The 5% Goods and Services Tax (GST) is a federal tax added to the cost of fuel. Sales tax is added after all other taxes are applied, resulting in a “tax-on-tax,” because you pay taxes on the price of fuel and all the other per-litre taxes governments add to the price.
Provincial sales taxes (PST) do not normally apply to fuels such as gasoline or diesel, except in provinces with a harmonized sales tax (HST) and in Quebec (QST).
Note: Though GST is a federal tax, we’ve included it among the provincial fuel tax breakdown (below) to help illustrate the differences in sales taxes across different provinces.
Sources: (Canadian Gov) (Annual Gas Tax Honesty Report)
Provincial Fuel Taxes Breakdown
Alberta
- Gasoline: 13 cents per litre
- Diesel: 13 cents per litre
- GST: 5%
Alberta generally enjoys some of the lowest provincial fuel taxes and their oil-price-based fuel tax relief program gives additional relief from provincial fuel taxes when oil prices are high. Fuel taxes are revised quarterly and can be as high as 13 cents per litre or as low as zero, depending on international crude oil prices.
Note: Alberta temporarily paused the fuel tax for the full 2023 year and applied a reduced rate for the first three months of 2024.
Sources: (Alberta Gov)
British Columbia
- Gasoline:
- Vancouver area: 27 cents per litre
- Victoria area: 20 cents per litre
- Rest of BC: 14.5 cents per litre
- Diesel:
- Vancouver area: 27.5 cents per litre
- Victoria area: 20.5 cents per litre
- Rest of BC: 15 cents per litre
- GST: 5%
In Vancouver and the surrounding area, fuel taxes are significantly higher due to an additional 18.5 cents per litre transit tax. The Victoria area has a dedicated 5.5 cents per litre transit tax.
Carbon tax: British Columbia has a slightly lower fuel charge rate for diesel at 20.74 cents per litre due to its assumption of a higher volume of biodiesel.
Sources: (BC Gov)
Manitoba
Provincial tax breakdown:
- Gasoline: 14 cents per litre*
- Diesel: 14 cents per litre*
- GST: 5%
- PST: Not applied to fuel
*As part of a “fuel tax holiday,” Manitoba suspended the collection of the provincial fuel tax on gasoline and diesel for the public and farmers through to the end of September 2024. Due to this, Manitoba currently has the lowest pump costs in the country.
Sources: (Manitoba Gov)
New Brunswick
- Gasoline: 10.87 + 8 cents (clean fuel adjuster charge) per litre
- Diesel: 15.45 + 8 cents (clean fuel adjuster charge) per litre
- HST: 15%
On paper, New Brunswickers are paying less than other provinces, but all maritime provinces have a 15% HST that usually results in higher prices at the pump.
What is the clean fuel adjuster charge? The clean fuel adjuster is a mechanism put into place by Maritime provinces that allows the Energy and Utilities Board (EUB) to pass a portion of refiner’s cost of complying with federal clean fuel standards on to consumers.
This was necessary because in these provinces, the maximum price is regulated and previously there was no mechanism that would allow the government to recover these costs.
Sources: (New Brunswick Gov)
Newfoundland and Labrador
- Gasoline: 7.5* + 3.74 cents (clean fuel adjuster charge) per litre
- Diesel: 9.5* + 4.17 cents (clean fuel adjuster charge) per litre
- HST: 15%
*To address affordability concerns, the Newfoundland and Labrador provincial government implemented a tax reduction on gasoline and diesel in 2022. This tax reduction, which subtracts 8.05 cents per litre (including HST) at the pump, was recently extended until March 31, 2025.
What is the clean fuel adjuster charge? The clean fuel adjuster is a mechanism put into place by Maritime provinces that allows the Energy and Utilities Board (EUB) to pass a portion of the refiner’s cost of complying with federal clean fuel standards onto consumers.
This was necessary because in these provinces, the maximum price is regulated and previously there was no mechanism that would allow the government to recover these costs.
Sources: (Newfoundland Gov)
Nova Scotia
- Gasoline: 15.5 + 3.74 cents (clean fuel adjuster charge) per litre
- Diesel: 15.4 + 4.17 cents (clean fuel adjuster charge) per litre
- HST: 15%
Nova Scotia, like all maritime provinces have a 15% HST tax-on-tax, that results in higher prices at the pump than most other provinces.
What is the clean fuel adjuster charge? The clean fuel adjuster is a mechanism put into place by Maritime provinces that allows the Energy and Utilities Board (EUB) to pass a portion of the refiner’s cost of complying with federal clean fuel standards onto consumers.
Sources: (Nova Scotia Gov)
Northwest Territories (NWT)
- Gasoline: 10.7 cents per litre
- Diesel: 9.1 cents per litre
- GST: 5%
Carbon tax: As of 2024, the carbon tax rates in the Northwest Territories are set according to federal guidelines with a few specific adjustments for the region, notably a slightly lower fuel charge rate for diesel at 20.94 cents per litre. The NWT government also provides various offsets to minimize the impact of carbon taxes on residents and businesses, including a Cost of Living Offset (COLO) rebate for large emitters in the resource sector.
Sources: (NWT Gov)
Nunavut
- Gasoline: 6.4 cents per litre
- Diesel: 9.1 cents per litre
- GST: 5%
Sources: (Nunavut Gov)
Ontario
- Gasoline: 9 cents per litre
- Diesel: 9 cents per litre
- HST: 13%
Effective July 1, 2022, the Ontario government reduced the tax rate on unleaded gasoline and diesel was reduced to 9 cents per litre. On December 31, 2024, the tax rate will revert back to 14.7 cents per litre.
Sources: (Ontario Gov)
Prince Edward Island
- Gasoline: 8.47 + 4 cents (clean fuel adjuster charge) per litre
- Diesel: 14.15 + 3.3 cents (clean fuel adjuster charge) per litre
- HST: 15%
What is the clean fuel adjuster charge? The clean fuel adjuster is a mechanism put into place by Maritime provinces that allows the Energy and Utilities Board (EUB) to pass a portion of the refiner’s cost of complying with federal clean fuel standards onto consumers.
This was necessary because in these provinces, the maximum price is regulated and previously there was no mechanism that would allow the government to recover these costs.
Sources: (PEI Gov)
Quebec
- Gasoline:
- Montreal: 22.2 cents per litre
- Rest of Quebec: 19.2 cents per litre
- Diesel:
- Montreal: 23.2 cents per litre
- Rest of Quebec: 20.2 cents per litre
- GST: 5%
- QST: 9.975%
In addition to the fuel tax, both GST and QST (Quebec Sales Tax) apply to sales of fuel. Quebec also imposed a reduced fuel tax rate in certain regions, such as those bordering another Canadian province or a U.S. State.
Carbon tax: Quebec operates under a special cap-and-trade carbon tax. The current cost of the carbon tax is roughly 13 cents per litre of gasoline and 17 cents per litre of diesel. Notice that these are lower than the carbon tax applied in other provinces.
Sources: (Quebec Gov)
Saskatchewan
- Gasoline: 15 cents per litre
- Diesel: 15 cents per litre
- GST: 5%
- PST: Not applied to fuel
Sources: (Saskatchewan Gov)
Yukon
- Gasoline: 6.2 cents per litre
- Diesel: 7.2 cents per litre
- GST: 5%
Sources: (Yukon Gov)
Average percentage of tax vs. fuel (as of the end of 2023)
Source: (Annual Gas Tax Honesty Report)
In summary
Fuel taxes in Canada vary significantly by province, reflecting regional policies and transportation funding needs. While the federal tax remains constant, provincial taxes can add a substantial amount to the final price at the pump. Cities like Vancouver and Montreal see higher fuel taxes due to additional regional taxes, whereas provinces like Alberta maintain lower tax rates overall. For the most accurate and up-to-date fuel tax rates, check your local government’s website.
