Finance Minister François-Philippe Champagne is expected to announce an extension of the gas tax holiday at a press conference in Ottawa on Wednesday.
The Liberals temporarily suspended the federal 10-cent-per-litre excise tax on gas in April when the United States' war on Iran caused global fuel prices to spike.
Gas prices are rising again as the conflict between the U.S. and Iran intensifies and as the Strait of Hormuz remains a supply line choke point.
The excise tax suspension was supposed to end after Labour Day but a government official confirmed for The Canadian Press that the tax will not be reimposed next week.
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The federal government first paused the fuel excise tax on April 14. Statistics Canada reported the national average price for a litre of gas that month was about $1.79.
The Canadian Automobile Association, better known as CAA, reports the national average gas price was $1.729 per litre on Sept. 2. The fuel excise tax would increase that price to $1.829 per litre, which would add $5 to the cost of filling a 50 L tank.
Carney told reporters in April the government expected the four-month gas tax holiday to cost about $2.4 billion in lost government revenue.
The Conservatives had been calling for an extension of the gas tax pause to the end of the year, as well additional GST relief, which they say would reduce fuel prices by 25 cents per litre.
Conservative Leader Pierre Poilievre issued a statement Wednesday saying his party "won another battle for Canadian families."
He said Conservatives now want the government to drop all federal fuel taxes, including clean fuel regulations, until Canada Day 2027 and to permanently cancel the industrial carbon price.
“Canadians need real relief that brings lower prices, not another Liberal half measure. Conservatives are proud of our role in securing today’s win, but we will never stop fighting for a more affordable Canada," Poilievre said in a media statement.
Ontario Premier Doug Ford welcomed the extended pause in a statement on social media and called for it to be made "permanent."
NDP Leader Avi Lewis called on Wednesday for a "windfall tax" on energy companies.
"People are getting gouged at the pumps, but another costly handout of public money to oil and gas companies is no solution," Lewis said in a media release.
"Even after the Carney government’s $2.4 billion giveaway, gas prices continue to soar. Instead of more corporate welfare, it’s time for a windfall tax on the big oil giants that are set to make $100 billion in profits this year because of (U.S. President Donald) Trump’s illegal war in Iran.
"Doing so will generate billions in new revenue that we can use to give Canadians real relief at gas stations and grocery checkouts."
This report by The Canadian Press was first published Sept. 2, 2026.
