Canadian Fuel Affordability Act

An Act to amend the Excise Tax Act (extension of the federal fuel excise tax relief)

Sponsor

Status

Report stage (House), as of Oct. 6, 2026

Subscribe to a feed (what's a feed?) of speeches and votes in the House related to Bill C-38.

Summary

This is from the published bill.

This enactment amends the Excise Tax Act to extend the temporary suspension of the federal fuel excise tax until January 31, 2027 and to temporarily set the excise tax rates on fuels to 50% of the regular rates for the period beginning on February 1, 2027 and ending on March 31, 2027.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.

Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-38s:

C-38 (2022) An Act to amend the Indian Act (new registration entitlements)
C-38 (2017) An Act to amend An Act to amend the Criminal Code (exploitation and trafficking in persons)
C-38 (2014) Law Appropriation Act No. 2, 2014-15
C-38 (2012) Law Jobs, Growth and Long-term Prosperity Act

Debate Summary

line drawing of robot

This is a computer-generated summary of the speeches below. Usually it’s accurate, but every now and then it’ll contain inaccuracies or total fabrications.

Bill C-38 extends the federal fuel excise tax suspension on gasoline, diesel, and aviation fuel until January 31, 2027. It proposes a 50% tax rate reduction through March 31, 2027, to provide cost relief to Canadians amidst global economic uncertainty and volatile fuel prices.

Liberal

  • Supports extending fuel tax relief: The Liberal party supports Bill C-38 to provide immediate financial relief at the pump, extending the suspension of the federal fuel excise tax to help families and businesses manage the rising cost of living.
  • Mitigating global economic instability: Members argue the bill is necessary to shield Canadians from volatile global fuel prices driven by international conflicts, supply chain disruptions, and new foreign tariffs that are beyond domestic control.
  • Relieving pressure on essential sectors: The party emphasizes that reduced fuel costs support vital industries like agriculture, trucking, and construction while providing essential relief to rural and northern residents who rely heavily on vehicles for daily life.
  • Implementing a gradual tax restoration: Liberals highlight the bill's responsible approach, which maintains a full tax suspension until early 2027 followed by a partial rate reduction to offer predictability and ease the transition for household budgets.

Conservative

  • Support for temporary relief: The party supports Bill C-38 because it provides immediate, temporary relief at the pumps for families and small businesses struggling with the high cost of living.
  • Criticism of phased tax hikes: Members criticize the bill as an insufficient half-measure, arguing that scheduling the return of the fuel tax in early 2027 fails to provide a long-term solution to the affordability crisis.
  • Demand for broader tax cuts: The party urges the government to extend the fuel tax holiday until at least Canada Day 2027 and completely remove all federal fuel taxes, including the GST, industrial carbon tax, and clean fuel regulations.

NDP

  • Opposes the fuel tax suspension: The party opposes Bill C-38, arguing that the fuel tax suspension fails to deliver promised savings to consumers and instead allows oil companies to absorb billions in taxpayer dollars.
  • Advocates for windfall profits tax: New Democrats propose a windfall profits tax on oil and gas giants, with the revenue returned to struggling Canadians as a more effective and targeted form of relief.
  • Calls for renewable energy investment: The party emphasizes that subsidizing fossil fuels creates an opportunity cost, urging the government to invest in cheaper, sustainable energy sources to lower long-term costs and meet climate targets.
  • Links energy to national sovereignty: Members argue that clean energy investments serve as vital security and industrial policies, reducing vulnerability to geopolitical energy manipulation and volatile global oil prices.

Bloc

  • Calls for committee study: Emphasizes the importance of studying the bill in committee to evaluate its effectiveness, hear from expert witnesses, and explore alternative measures.
  • Concerns over untargeted relief: Argues the measure provides broad relief to wealthy consumers who do not need it, rather than targeting support to the lowest-income households.
  • Skepticism on consumer savings: Warns that because fuel demand is inelastic, oil distributors and gas stations are likely to pocket the tax break instead of passing savings to consumers.
  • Prioritizing senior support: Criticizes the government for allocating $5.3 billion to this measure while previously claiming it could not afford to increase Old Age Security for seniors.

Green

  • Supports C-38 with misgivings: The party supports the bill but criticizes it as a temporary relief measure that adds to the federal deficit and risks destabilizing predictable funding for municipal public transit systems.
  • Advocates for tax fairness: May calls for systemic tax reform, including a wealth tax on billionaires and a financial transactions tax, to generate significant revenue for public services and provide relief to the middle class.
  • Imposing windfall profit taxes: The Green Party proposes taxing the excess profits of oil, gas, and grocery corporations to address corporate profiteering and help fund essential services like flood protection and firefighting.
  • Enhancing rural ground transportation: Emphasizing safety and equity, the party demands a reliable, affordable national bus and rail system to serve rural and remote Canadians who lack access to private vehicles.
Was this summary helpful and accurate?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Conservative

Kelly DeRidder Conservative Kitchener Centre, ON

Mr. Speaker, I want to set the record straight. I did not say the government was slow to react. I said that the Conservatives have applied pressure for 10 years advocating for that. We said the carbon tax was going to be detrimental to our economy. That is the debate that we won and the debate we are moving forward with. We are asking the government now to completely eliminate it, not just a half-measure or little pieces but completely eliminate it. It should not put in question the prices of oil or exponential circumstances that we have no control over.

We have control to reduce the cost of living for Canadians, and that is what we should be implementing today.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Conservative

Ellis Ross Conservative Skeena—Bulkley Valley, BC

Mr. Speaker, it was just mentioned by one of the Liberal government members that it does not matter where the idea comes from. Yes, it does for the Liberal government, because this idea was brought up in April, and previous to that other measures were presented by the Conservatives. They were all voted down by a majority of the House. This is exactly what we are talking about today.

To the member, if the Conservative proposal put on the floor back in April was actually approved in April, how much savings could that have brought to families and citizens across Canada?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Conservative

Kelly DeRidder Conservative Kitchener Centre, ON

Mr. Speaker, we have done the math, and if the full measure had been implemented right away, it would have saved the average Canadian $1,000 at the fuel pump over the course of the year.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Mr. Speaker, a permanent tax reduction is the Conservatives' go-to response in every situation. How would that improve affordability? How is that going to help people, when the reality is that if the Government of Canada permanently reduces taxes, the oil companies will jack up their prices?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Conservative

Kelly DeRidder Conservative Kitchener Centre, ON

Mr. Speaker, we never said that we want to completely cut the taxes across the board for all Canadians. We do want to cut the fuel standards tax and the industrial tax. They are just another version of the previous tax the Liberals that we have fought against for 10 years. They have an economic impact on our society, and it is time to completely get rid of these taxes so we can go back to an affordable life.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Conservative

Ellis Ross Conservative Skeena—Bulkley Valley, BC

Mr. Speaker, the Liberal government just cannot get it right. On one hand, its members say that affordability is the best it has been for 10 years. On the other side, they recognize the affordability crisis our constituents are facing in Canada.

To the member, where are these stories coming from of Canadians struggling to put food on the table or gas in their gas tank?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

Conservative

Kelly DeRidder Conservative Kitchener Centre, ON

Mr. Speaker, I do not think they are coming from the average Canadian. The average Canadian is really struggling right now. Canadians are struggling with everything. Their mental health is even being affected because they are having to choose between heat and food. These stories are not coming from the grassroots. They are not coming from people at their kitchen tables. They are coming from consultants or someone who thinks it is a better idea to do something different than give Canadians a little relief.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Mr. Speaker, I rise to speak to Bill C-38, the Canadian fuel affordability act, which would temporarily extend the government's fuel tax suspension at a further cost of $2.9 billion.

No party in the House has raised greater concern about the affordability crisis facing working Canadians and their families than the New Democrat Party. We know how expensive life has become with the sky-high costs of groceries, fuel and housing, and we know that Canadians need effective relief now. Unfortunately, the policy contained in this bill, which would ultimately cost over $5 billion, has failed to deliver the lower fuel prices Canadians were promised.

When this tax suspension was first implemented last April, New Democrats warned that its impact on prices at the pump would be limited because nothing in the legislation guaranteed that savings would actually reach consumers. We argued then that there was nothing to stop oil companies from absorbing some or all of the tax cuts themselves. We were right.

Canadians are now paying more for gasoline today than they did in April, and substantially more than they were paying before the latest global energy crisis began. On the day the tax suspension took effect, the national average price of gasoline was $1.69 per litre. Today it stands at $1.83 per litre. It is also more than 60¢ per litre higher than it was last Christmas, before the U.S.-Israeli invasion of Iran sent oil markets into turmoil.

The government has essentially given billions of taxpayer dollars directly to the oil companies, some of the most profitable corporations on the planet. While Canadians struggle with the cost of living, oil and gas giants are poised to collect $90 billion in profits this year alone, not because of innovation or increased productivity, but because they are gouging consumers. That is why New Democrats have opposed this policy from the outset, and why we continue to advocate for the future a better, more effective way to help struggling consumers, which is a windfall profits tax on oil and gas companies with the proceeds returned to Canadians who need relief.

This is not a radical idea. We have done it before in times of crisis. Canada imposed excess profits taxes during both world wars. The Liberals themselves imposed an excess profits tax on banks during the pandemic. It is an approach that makes sense. A windfall profits tax avoids the pitfalls we have just seen from the flawed policy contained in this legislation. It cannot be captured as corporate profits. It allows support to be targeted to those who need it the most. It does not encourage greater fossil fuel consumption at a time when the world is facing a climate emergency.

The irony of this fuel tax suspension is hard to ignore. Canadians who have chosen to reduce their emissions by purchasing electric vehicles, taking public transit, cycling or making other environmentally responsible choices are being forced to pay for another fossil fuel subsidy while receiving none of the benefits.

We cannot ignore the opportunity cost of delaying our transition to the sustainable energy sources of the future. Every dollar spent propping up an industry that is already enormously profitable is a dollar not invested in the technologies that could lower energy costs, strengthen our economy and free Canadians from the endless roller coaster of oil and gas prices.

The world is changing far faster than many people realize. In the early 2020s, we crossed an important threshold. For the first time, solar power became cheaper than fossil fuels and cheaper than coal, making it the lowest cost source of electricity available. Wind power followed closely behind as the second cheapest source. By 2024, over 92% of all new electricity generation added globally came from renewable sources. Solar power is now being installed at a staggering pace around the world, with more than a gigawatt of capacity being added every single day. That is equivalent to the output of a large, coal-fired power plant or a nuclear reactor.

The world now possesses the manufacturing capacity to produce as many solar panels as climate scientists say we need. The old arguments that clean energy is too expensive, too unreliable or incapable of meeting our energy needs simply do not withstand scrutiny. The global energy transition is no longer a question of possibility. It is already under way. While the Liberal government spends billions subsidizing fossil fuels, other countries, from Europe to China, are investing in the industries that will create the jobs, exports, productivity gains and economic opportunities of the future.

This transformation is not limited to only wealthy countries. According to the Rocky Mountain Institute, renewable energy capacity is growing twice as fast in countries of the global south as it is in developed countries. Communities that have historically lacked reliable access to energy are increasingly leapfrogging directly to clean electricity. These examples matter because they show that the transition is about far more than reducing emissions. It is about freedom, freedom from volatile energy prices, freedom from domination by oil and gas monopolies and freedom from the dangerous geopolitics that have always accompanied fossil fuels, where access to energy can be manipulated, restricted and weaponized.

We can see the consequences of that reality unfolding right now in Cuba. For more than 60 years, Cuba has lived under an illegal U.S. economic blockade that has been repeatedly condemned by the overwhelming majority of countries at the United Nations. Today, that pressure is intensified into an American effort to choke off Cuba's energy supply altogether. When fuel is cut off, hospitals struggle to operate, water systems fail, food spoils and ordinary people suffer. Let us be clear, this is not an unintended consequence. Humanitarian catastrophe is the objective.

Canada has a long tradition of pursuing an independent relationship with Cuba. We have maintained diplomatic relations since 1945, consistently opposed the U.S. economic blockade and built deep cultural and commercial ties between our peoples, yet, as humanitarian conditions worsen and the Trump administration cruelly and illegally blockades Cuba's fuel supplies, the Liberal government has refused to speak out.

That silence is difficult to reconcile with the principles articulated by the Prime Minister in his speech in Davos. There, he argued that middle powers like Canada have a responsibility to defend sovereignty, human rights and solidarity rather than bowing to the exercise of power by stronger states. He cautioned against the temptation to “go along to get along” in the face of coercion and intimidation from superpowers. Those are admirable principles, but if they mean anything, they must apply to Canada and Cuba as well.

Canada should speak out strongly and demand that Donald Trump rescind his illegal blockade. We should stand with the Cuban people by providing immediate energy support to keep essential services running while helping the country rapidly build the renewable energy capacity needed to free itself from imported fossil fuels and the threat of future energy blockades. This is ultimately the lesson before us today.

Investments in clean energy are not simply climate policy. They are affordable policy. They are industrial policy. They are security policy. They are investments in a future where communities are less vulnerable to geopolitical conflict, less dependent on scarce resources and more capable of determining their own destiny. The technology exists. The costs have fallen. The solutions are available, so let us stop the destructive and senseless expansion of fossil fuel infrastructure and consumption on a planet crying out for relief. Let us stop subsidizing the oil and gas industry, which does not need the money. Canadians do. Let us start investing in the energy supplies of the future that will lower costs, create jobs, build our economy and protect our planet.

Canadians can count on New Democrats to support positive and constructive policies in this place that will actually help them with the affordability crisis they are facing. We will continue to oppose corporate giveaways by the Liberal government, which are supported by the Conservative Party, that simply enrich corporations while Canadians struggle every day.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:10 p.m.

Calgary Confederation Alberta

Liberal

Corey Hogan LiberalParliamentary Secretary to the Minister of Energy and Natural Resources

Mr. Speaker, I agree with my colleague that energy consumption is changing globally. Perhaps I do not see it happening as rapidly as he hopes, but I agree that the world is in the process of electrifying and greening, and cost curves are clear for renewables and storage. However, that does not provide relief today to Canadians affected by price spikes driven from global uncertainty or Canadians who own combustion engine vehicles. It seems to me that postponing the excise tax is a practical and prudent response in the short term.

I would ask my colleague if he sees a place for short-term affordability measures, such as the suspension of the excise tax.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:10 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Mr. Speaker, I think what my hon. colleague and I agree on is that Canadians need immediate relief and need help with the affordability crisis. I pointed out, and quoted statistics on this, that the policy of the Liberal government to cut the excise tax on oil and gas has not resulted in that. That is not just my opinion. It is the numbers; it is the math.

I quoted that the price of gas the day before the Liberals dropped the excise tax back in April was lower than it is today. The prices are much higher today at the pump, and there was no mechanism whatsoever to ensure that oil companies did not just raise prices when the excise tax came down. That was a criticism we raised at the time, and it is probably a mechanism that should be put in this legislation as well to make sure that every penny of this tax relief goes to consumers. That might actually help Canadians, but this legislation does not require it.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:15 p.m.

Conservative

William Stevenson Conservative Yellowhead, AB

Mr. Speaker, I am a little confused by the NDP member's comments about rounding the math. I do not want to criticize him for going off topic so much, because I will probably do a bit of that in three hours when I have to speak, but in some of his comments, he said that taking this tax off would somehow subsidize the oil companies. I do not see how he can say that when it is going to help take taxes off the consumer at the pump. Could he explain how he rounds that math?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:15 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Mr. Speaker, it is very easy math. In fact, it is not just math. It is what has actually happened in the last five months.

When the tax was cut at the pump, nothing stopped oil companies from bumping up prices, so the consumer ended up paying more anyway. That is what we are talking about, and there is no price control on the oil companies whatsoever. Here are the statistics taken from the Statistics Canada website. This is what the government says. On the day the tax suspension took effect, the national average price of gasoline was $1.69 per litre. Today, it stands at $1.83 per litre. I think it is pretty obvious that if we are paying $1.83 a litre today and were paying $1.69 a litre before this policy came in, we are paying more for gas today. The policy has failed.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:15 p.m.

Bloc

Mario Simard Bloc Jonquière, QC

Mr. Speaker, I agree with my colleague entirely. While the intention may be commendable, the indicators suggest that the assistance may not reach the people who are struggling the most. As legislators, the last thing we want is to help greedy oil and gas companies make bigger profits.

We definitely need a mechanism to ensure that the tax relief goes directly to the most vulnerable. I have a solution, and I wonder if my colleague would agree with me. Instead of sending oil and gas companies billions of dollars in tax credits and support, would it not be better to increase old age security for the most vulnerable, for seniors struggling to put food on the table with nothing but the GIS and OAS to rely on?

That might be a better solution.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:15 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Mr. Speaker, my hon. colleague is absolutely right. The intentions of this policy may have been good, but the execution has failed miserably. People are paying 14¢ per litre more today for gas than they were before the government decided to give $5 billion in a cut to the fuel excise tax. That is because oil companies pocketed the difference.

Here is another piece of math, and it is a matter of public record. Oil and gas companies are on course to making $90 billion in profit this year. Where did the $5 billion go? It did not go into the pockets of people who were filling their tanks. They are paying more today. Oil companies are making more. It is clear where the money went, and that is why the NDP is pushing for a windfall profits tax to take a piece of those profits from the oil and gas industry and then direct that money to the Canadians who really need it.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 7:15 p.m.

Conservative

Jagsharan Singh Mahal Conservative Edmonton Southeast, AB

Mr. Speaker, it is always an honour to rise on behalf of my community of Edmonton Southeast. As Parliament returns for the fall sitting, I am proud to stand in the House with my Conservative colleagues as we fight for a more affordable life for all Canadians.

This evening, I have the privilege of debating legislation that not only is Conservative in principle, but reflects a policy that Conservatives have been pushing for months. The tabling of Bill C-38 by the government represents a successful policy push by Conservatives that would help ease the strain on the wallets of millions of Canadians, but while this legislation is a step in the right direction, it does not go far enough.

Earlier this year, the federal government temporarily suspended the fuel excise tax, reducing the tax on gasoline by 10¢ per litre and on diesel by four cents per litre. That relief was supposed to expire after Labour Day. Conservatives fought that tax increase and called on the government to extend the relief. Now the government has changed course. Under Bill C-38, the excise tax would remain suspended until the end of January, and half of the tax would return in February and March, before the full tax would return in April.

Any relief for working Canadians is good news, but Canadians should understand what this legislation would actually do. It would not eliminate the tax. It would delay its return, and it would leave in place other federal taxes and regulatory costs that continue to affect the price Canadians pay for fuel. That matters because fuel is not simply another household expense. Fuel moves our economy. It gets workers to their jobs. It powers farm equipment. It moves building materials to construction sites. It delivers food to grocery stores and products to businesses across this vast country. When the cost of fuel increases, those costs do not remain at the gas station. Those costs move through our supply chains and eventually land on the bills paid by Canadian families.

We are already seeing the pressures. In July, gasoline prices were up over 25% compared with the year before. Energy costs were up over 16%. Transportation costs increased by over 7%, while grocery prices rose another 3%. Canadian households now carry about $1.76 in debt for every dollar of disposable income. At the same time, consumer insolvencies are up over 5% from the year before. These are not simply numbers on a spreadsheet. They represent real Canadians trying to make their paycheques stretch further.

Just this Sunday on my way to the Edmonton airport, my ride-share driver shared some of the struggles he faces every day. This hard-working man from south Edmonton is named Peter. Peter came to Canada 25 years ago and built a life for himself and his family. He owned and operated a small business in our community, employed local residents and contributed to Canada's economic engine. After almost three decades of working hard and providing for his family on a single income, it was finally time for him to retire, but there was a problem. The rapidly increasing cost of living meant that his retirement savings could no longer keep up with the price of everyday essentials.

After decades of contributing to Canada's economic base and providing for his family, Peter's wife is now forced to work a retail job. At the same time, Peter cannot enjoy his well-deserved retirement years. Instead, he drives for a ride-share service five days a week just to keep his head above water. Unfortunately, Peter's story is all too common among Canadians.

We used to have a simple bargain in this country: work hard, earn a decent paycheque, provide for one's family, buy a home in a safe neighbourhood and, after decades of work, enjoy a secure retirement. After 11 years of Liberal government, that bargain has been torn apart. Canadians like Peter can no longer enjoy the fruits of their labour because the cost of basics continues to eat away at their paycheques and savings.

That is why Bill C-38 cannot be where this conversation ends. The government itself recognizes that fuel tax relief benefits truckers, agriculture, housing, construction and delivery businesses. If lower fuel taxes help those sectors today, then Canadians should not be satisfied watching those taxes being returned in only a few months.

Conservatives are proposing something more substantial. We have called on the government to remove all federal taxes on gasoline and diesel until at least Canada Day 2027. That means going beyond the excise tax suspension and addressing costs attributed to the clean fuel regulations and the industrial carbon tax. The common-sense Conservative proposal would save drivers up to 25¢ per litre and put as much as $1,000 back into the pockets of Canadian families. That is the difference between temporary relief and meaningful relief.

Conservatives fought the return of the fuel excise tax after Labour Day. The government changed course, and Canadians will save money because of it. That is a positive development, but we should not confuse a temporary extension with a solution to Canada's affordability crisis. Canadians still face high fuel prices, rising grocery bills and household budgets stretched too thin.

Conservatives will always fight for measures that leave more money in Canadians' pockets while continuing to push for greater and longer-lasting relief, because Canadians like Peter did everything we asked of them. They worked hard, built businesses, raised their families, paid their taxes and contributed to their communities. They deserve more than another temporary relief. They deserve a Canada where hard work once again provides the opportunity to get ahead, build a good life and retire with security. That can only be done by extending government tax relief until at least July 1, 2027, and permanently removing the clean fuel standard and industrial carbon tax.