Gas prices rise in Canada despite fuel tax relief

By Tahani Elghazaly
Published May 3, 2026

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Gas prices are continuing to climb in Canada despite the federal government’s temporary suspension of the fuel excise tax, showing how global energy pressures are outweighing domestic relief measures at the pump.

In Metro Vancouver, prices reached about 224.9 cents per litre on Friday, the highest level reported in the region since prices hit 241.9 cents in 2022, according to Global News. The increase came even after Ottawa moved to temporarily suspend the federal fuel excise tax on gasoline and diesel.

Prime Minister Mark Carney announced that the federal fuel excise tax would be suspended from April 20, 2026, until September 7, 2026. The federal government said the measure was expected to reduce prices by about 10 cents per litre for regular gasoline and 4 cents per litre for diesel.

But the relief has been weakened by rising global oil prices. Ongoing tensions around the Strait of Hormuz, one of the world’s most important energy routes, have continued to disrupt markets. Reuters reported that OPEC+ agreed to a modest production increase for June, but the move is limited while supply pressures linked to the Hormuz crisis continue.

For Canadian households, higher gas prices mean more than a bigger bill at the pump. Fuel costs affect transportation, delivery, grocery supply chains, travel, and small businesses. That can feed into broader cost-of-living pressures at a time when many families are already watching every dollar.

The key message for drivers is clear: a tax break can help, but it cannot fully protect consumers from a global oil shock. If the Strait of Hormuz crisis continues, fuel prices in Canada could remain volatile in the weeks ahead.