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

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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.
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Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:25 p.m.

Conservative

Rhonda Kirkland Conservative Oshawa, ON

Mr. Speaker, I found it interesting yesterday during question period that the Minister of Energy and Natural Resources accused me, and Conservatives generally, of scaring Canadians. I would argue, and did yesterday, that the truth is what we are actually doing is hearing Canadians.

I would like to ask my colleague to give us a couple of examples of where he has heard from Canadians about the struggles they are going through and what extending a full relief of gas tax until next Canada Day could mean for them.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:25 p.m.

Conservative

Kerry Diotte Conservative Edmonton Griesbach, AB

Mr. Speaker, I hear that question all the time, just going into a grocery store. Every penny counts these days. People are so hard pressed.

As my other colleague was talking about, the wild spending by the Liberal government fuels inflation. It drives all the costs up. This little bit of a break is good, but it should go further. We should get it until Canada Day.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:25 p.m.

Eglinton—Lawrence Ontario

Liberal

Vince Gasparro LiberalParliamentary Secretary to the Secretary of State (Combatting Crime)

Mr. Speaker, I listened to the hon. member's remarks quite intently. At one point he mentioned that tariffs upon tariffs are not helpful. The fact of the matter is that countertariffs that we are placing on American goods are about protecting Canadian businesses and Canadian workers.

If the hon. member does not believe in our government's defending Canadian workers and businesses, what does he agree with?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:25 p.m.

Conservative

Kerry Diotte Conservative Edmonton Griesbach, AB

Mr. Speaker, we have already seen the result of the tit-for-tat tariffs, because Canadian businesses are being hurt. That is the great irony. The government goes after the U.S. and slaps on a tariff, but Canadian businesses are actually going out of business because of it.

We have to get back to the table and negotiate tariff-free access to the United States of America, our biggest trading partner. We are not going to replace it with Europe, despite the fact that the Prime Minister spends more time in Europe than he does here in the House of Commons.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:25 p.m.

Liberal

Tatiana Auguste Liberal Terrebonne, QC

Mr. Speaker, I would like to begin by saying that I will be sharing my time with the member for Bourassa.

The global economy is going through a period of considerable uncertainty. New unwarranted tariffs imposed by the United States are creating uncertainty for Canadian workers, families and businesses. At the same time, ongoing conflicts in the Middle East and Europe continue to put pressure on global markets and drive up prices. Although we have no control over decisions made elsewhere in the world, we can control how we respond to them.

As Canadians continue to face economic uncertainty and a rising cost of living, affordability remains a priority for families and businesses across the country. That is why our government continues to take action. I am therefore pleased to rise today to speak to Bill C-38, the Canadian fuel affordability act, which seeks to extend federal fuel excise tax relief with respect to gasoline, diesel fuel and aviation fuel.

Earlier this year, the Government of Canada temporarily suspended this tax to help Canadians cope with the rising cost of living and fuel prices. The day the pause took effect, gas prices dropped 11¢ a litre, proving that the savings were quickly passed on to consumers. This measure actually benefits all Canadians, even those who do not drive. When global energy prices go up, the consequences go far beyond the cost of a tank of gas. Transportation costs go up, delivery costs go up, operating costs go up and, ultimately, consumers end up paying more for the goods and services they need every day.

In light of this reality, our government decided to take action. The result is savings for millions of Canadians who drive to work, drive their kids to sports or otherwise have to get around on a daily basis. Another benefit is reducing transportation and operating costs for Canadian businesses. Extending this measure in the current context is a no-brainer. That is why we believe it is important to maintain that support.

Bill C-38 therefore proposes to extend the suspension of the federal excise tax on fuel until January 31, 2027. Then, in the months of February and March, rates will be restored to only half of their usual level before a full return to the regular rate on April 1, 2027. Thanks to Bill C-38, Canadians will continue to benefit until January 31, 2027, from tax relief of up to 10¢ a litre on gas and four cents a litre on diesel. During February and March, the relief will continue at a rate of five cents a litre on gas and two cents a litre on diesel. This is a balanced, gradual and responsible approach. It provides greater predictability for families and businesses, while facilitating a gradual return to the usual rates.

This bill is about affordability. Across the country, families are trying to make every dollar count. They have to pay their mortgage or rent, buy groceries, and cover the cost of daily commuting. In many parts of Canada, a car remains a necessity. For many Canadians, especially in rural areas and even in regions surrounding major urban centres, a car is not a luxury. It is a necessity. It is an essential tool for getting to work, accessing services and participating in the economy. Bill C-38 recognizes this reality and aims to provide additional relief to households that continue to feel the effects of the rising cost of living.

However, as I explained earlier, its importance extends far beyond motorists. Think of the truck drivers who transport goods from one end of the country to the other. Think of the farmers who supply Canadians with food. Think of the entrepreneurs in the construction industry. Think of the school buses that take our children to school. When fuel costs rise, it has a ripple effect throughout the economy. It has an impact on the cost of food, building materials and consumer goods. Bill C-38 helps alleviate these pressures and supports the sectors that drive the Canadian economy.

The government estimates that this extension will deliver approximately $2.9 billion in additional tax relief to Canadians, bringing the total relief to approximately $5.3 billion in the 2026-27 fiscal year. That is a significant investment, an investment in families, workers, Canadian businesses and the resilience of our economy.

In a global climate of uncertainty, Canadians expect their government to act, they expect us to take concrete action to cut costs where it is warranted and they expect us to support the workers, families and businesses that drive our economy. That is exactly what Bill C‑38 does. It offers genuine relief for families, supports workers, supports businesses and helps make life more affordable in what remains a challenging situation.

I know that this extension will give families in Terrebonne a bit of breathing room. For all these reasons, I encourage all members of the House to support Bill C‑38 and vote in favour of it.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:30 p.m.

Taiaiako'n—Parkdale—High Park Ontario

Liberal

Karim Bardeesy LiberalParliamentary Secretary to the Minister of Industry

Mr. Speaker, my colleague did a very good job of explaining the context that gave rise to this bill. Can she tell us more about what this bill will do for the people of Terrebonne?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:30 p.m.

Liberal

Tatiana Auguste Liberal Terrebonne, QC

Mr. Speaker, this kind of measure will help families, especially in Terrebonne. The riding I represent is outside the urban core, but it has ties to major centres. There is a lot of room for improvement in public transit, which is why every household has at least one car. Bringing gas prices down for those struggling with the cost of living will help a lot of families in my riding. That is relief they need right now.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:35 p.m.

Liberal

Bardish Chagger Liberal Waterloo, ON

Mr. Speaker, I appreciate hearing the comments the member was able to share. Today I have been listening to the debate in this place, and it has been interesting to hear the different perspectives on what this legislation does.

I would just like to hear, in simple terms for Canadians who are watching, what the value of this legislation is. What does it do? How will it benefit Canadians?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:35 p.m.

Liberal

Tatiana Auguste Liberal Terrebonne, QC

Mr. Speaker, in practical terms, this is about reducing costs not only for households, but also for businesses. There are seven industrial parks in my riding, Terrebonne. Businesses move their goods in and out every day. I recently read an article about school buses, which are struggling because of the price of diesel. The point is that this measure to bring costs down will help all sectors of the economy.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:35 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, it is important that we reflect on exactly what this bill does. It provides a 10¢-a-litre break, extending it until the end of January, and then, once we get to the end of January, it becomes a five-cent-a-litre break until the end of March. It is one of many initiatives the government has taken to support Canadians on the issue of affordability.

I wonder if the member could provide her thoughts on why it is important that this is just one of the initiatives, because we could also talk about the Canada grocery benefit program. We could talk about the tax break for 22 million Canadians. Can she just give her perspective on that?

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:35 p.m.

Liberal

Tatiana Auguste Liberal Terrebonne, QC

Mr. Speaker, we have indeed done a great deal to address the cost of living. We cut taxes for 22 million Canadians. We invested in the national school food program and made it permanent, which is very important. In concrete terms, our approach is providing Canadians with stability. A gradual return to a normal rate also helps Canadians plan their spending during difficult times. Stability is what they need right now.

The House resumed consideration of the motion that Bill C-38, An Act to amend the Excise Tax Act (extension of the federal fuel excise tax relief), be read the second time and referred to a committee.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:40 p.m.

Conservative

Arnold Viersen Conservative Peace River—Westlock, AB

Mr. Speaker, I noticed that the Liberals have been implementing the Conservative agenda, maybe at half speed, but this particular bill was definitely our idea. We are glad to see that maybe a year later after the fact, they are actually doing it.

I am just wondering what other great ideas the Conservatives have had that the Liberals will be implementing soon.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:40 p.m.

Liberal

Tatiana Auguste Liberal Terrebonne, QC

Mr. Speaker, I think our colleague needs to start voting with us on the good ideas we are coming up with on this side of the House. That would be a good place to start.

Canadian Fuel Affordability ActGovernment Orders

September 22nd, 2026 / 1:40 p.m.

Liberal

Abdelhaq Sari Liberal Bourassa, QC

Mr. Speaker, before I begin my speech, allow me to welcome everyone back to the House. It is a privilege for me to serve in this place and represent the people of my riding, Bourassa.

As I said earlier, it is an honour for me to rise on behalf of the people of Bourassa to speak to Bill C-38, the Canadian fuel affordability act.

I want to describe a scene that we see every morning. Before work, a mother stops at a gas station, looks up at the posted gas price, does a quick mental calculation and decides to spend $20. She does not spend a penny more because the rest of the money has to go toward feeding her children that week. No one sees it or hears about it, but this is something that happens thousands of times a day across the country. I see this scene playing out in my riding, whether it be with a personal support worker who leaves work at dawn after their night shift, a delivery person who crisscrosses the city from morning until night, a taxi driver who is calculating how many litres they will need that day or a small business owner whose pickup truck is their livelihood. For them, the price of gas is not an economic indicator, a statistic or a quantitative indicator. It is much more than that. It is a concern that they have from the time they get into their car every morning until the end of the day.

We are living in a time of global instability. Supply disruptions in the Middle East are sending shockwaves to energy markets around the world, and it is our families who are paying the price at the pump. We cannot put an end to global conflicts, but we can choose not to let Canadians deal with the consequences of those conflicts alone. That is the choice that our government is making today.

Bill C-38, introduced by the Minister of Finance and National Revenue, temporarily extends the federal fuel excise tax until January 31, 2027. Then from Februrary 1 to March 31, 2027, a half-rate will apply.

This tax is 10¢ per litre of gasoline and 4¢ per litre of diesel. Suspending it will save up to about $5.75 on a 50-litre fill-up of regular gasoline and up to $2.30 on a fill-up of diesel. Some members across the way might say that is not much. However, we must consider what a few extra dollars each week mean to a mother, a delivery driver who fills up three times or more a week, or a small business that relies on several vehicles for its livelihood. For these people, it is not a small amount. It is a breath of fresh air. For someone who is out of breath, a bit of breathing room makes all the difference.

The gradual return to the mid-range rate also offers something valuable: predictability. Families and businesses deserve to be able to plan ahead rather than face a sudden shock overnight. I am focusing on diesel because, when diesel is cheaper, it means the trucks that deliver food, fruits and vegetables cost less to operate. It means construction sites make progress faster. It means the agricultural sector can breathe a sigh of relief. Whether we are talking about trucking, food, agriculture, housing, construction, or delivery, this measure affects what we eat, where we live, and what we receive day after day. It is one of many steps we are taking. This is not the only step the government has taken to help Canadians.

Bill C-38 does not stand alone, because affordability is not something can simply be declared; it must be built, one step at a time.

Since July 1, 2025, nearly 22 million Canadians have been paying less tax thanks to the reduction of the first marginal rate from 15% to 14%. That means up to $420 per person, and up to $840 for a two-income family.

We have eliminated the GST for first-time homebuyers purchasing a newly built home valued at up to $1 million and reduced it for new homes between $1 million and $1.5 million, because the dream of home ownership should not disappear within a single generation.

We created the Canada groceries and essentials benefit. In the spring, a one-time top-up of $3.1 billion was paid to 12 million Canadians. Since July 2026, the benefit has been increased by 25% for five years and is paid quarterly so that the benefit arrives when the bills do. A family of four will receive up to $1,890 this year. It will receive $1,890 this year. I am repeating that because it is very important for the Canadians listening to us today. We want them to see this as some breathing room that can help them manage under the current circumstances. A single person, meanwhile, may receive up to $950.

Upon taking office, the Prime Minister eliminated consumer carbon pricing in the provinces and territories where it applied, lowering the cost of gas by about 18¢ a litre in those regions and helping to curb inflation.

We have made the national school food program permanent, feeding nearly 400,000 children every year and saving a family with two children about $800 a year. Children with full bellies in the morning are freed up to learn, stay in school and have the peace of mind they need to get the most out of their school day. There is no better investment for the country's future than to invest in our young people and children, especially when it comes to helping them go to school with full bellies.

With automatic benefit payments, up to 5.5 million low-income Canadians will finally receive what they are entitled to. In a neighbourhood like mine, Bourassa, so many families are losing out on their rights because of a lack of information or missing paperwork. This is not an administrative measure; it is a matter of dignity.

Finally, we are strengthening competition in telecommunications and financial services so that Canadians can switch providers more easily.

In conclusion, our vision is clear: We are building a stronger economy, diversifying our trade partnerships around the world, capitalizing on our strengths and creating better jobs and higher wages. However, building for tomorrow must never make us forget the challenges we face today. No one should be left behind. It is very important to include all Canadians in our strategy and to truly keep them in mind at all times when we develop measures like the one before us today.

Let us come back to the mother gassing up at the pump. Thanks to Bill C-38, maybe she will no longer have to stop at $20. Maybe she can fill the tank. Maybe she can keep a few dollars for a pair of winter boots for her children or for a family outing she has been putting off for months.

This bill will not fix everything. We know that. No one here is saying that. However, it is telling millions of Canadians something essential: We see them, we hear them and we are here for them.

Relief only works if it is timely, so I invite all my colleagues from all parties to quickly support this bill.