Fuel taxes in Canada
Encyclopedia
In Canada
, motor vehicle
s are primarily powered by gasoline
or diesel fuel. Other energy sources include ethanol
, biodiesel
, propane
, compressed natural gas
(CNG), electric batteries
charged from an external source, and hydrogen
. Canada, like most countries, has excise taxes and other taxes on gasoline, diesel, and other liquid and gas motor fuels (collectively called fuel tax
es), and also taxes electricity
at various administrative levels. Most provinces and territories
in Canada also have taxes on these motor fuels, and some metropolitan area
s such as Montreal, Greater Vancouver, and Victoria
impose additional taxes.
Additionally, Canada's federal (national) government
collects sales tax
(GST
) across the country, and some provincial governments also collect a provincial sales tax (PST), which may be combined with the GST into a single harmonized sales tax
(HST). HST, GST, or GST + PST where applicable, are calculated on the retail price including the excise taxes.
Across Canada, motor fuel taxes can vary greatly between locales. On average, about one-third of the total price of gasoline at the pump is tax. Total minimum taxes (taxes before GST/HST/PST is added at the retail level, but including GST/HST/PST on the excise taxes themselves) vary from 17.0 ¢/liter (64.4 ¢/US gallon) in the Yukon
to 41.01 ¢/L ($1.552/US gallon) in Greater Vancouver.
Notes:
collects about $5 billion per year in excise taxes on gasoline, diesel, and aviation fuel as well as approximately $1.6 billion per year from GST revenues on gasoline and diesel (net of input tax credits). The Canada Revenue Agency
, a part of the government, collects these taxes.
Collectively, the provincial governments collect approximately $8 billion per year from excise taxes on gasoline and diesel.
The federal taxes go into general coffers and help to fund a range of programs: $2 billion of the approximately $5 billion collected from federal excise taxes goes into the now permanent annual Gas Tax Fund for municipal infrastructure. Provincial tax revenues usually go to fund road repair and construction, and additionally in some provinces a portion of revenues (for example, 2 cents/litre in Ontario) is also distributed directly to municipalities.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, motor vehicle
Motor vehicle
A motor vehicle or road vehicle is a self-propelled wheeled vehicle that does not operate on rails, such as trains or trolleys. The vehicle propulsion is provided by an engine or motor, usually by an internal combustion engine, or an electric motor, or some combination of the two, such as hybrid...
s are primarily powered by gasoline
Gasoline
Gasoline , or petrol , is a toxic, translucent, petroleum-derived liquid that is primarily used as a fuel in internal combustion engines. It consists mostly of organic compounds obtained by the fractional distillation of petroleum, enhanced with a variety of additives. Some gasolines also contain...
or diesel fuel. Other energy sources include ethanol
Ethanol fuel
Ethanol fuel is ethanol , the same type of alcohol found in alcoholic beverages. It is most often used as a motor fuel, mainly as a biofuel additive for gasoline. World ethanol production for transport fuel tripled between 2000 and 2007 from 17 billion to more than 52 billion litres...
, biodiesel
Biodiesel
Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl esters. Biodiesel is typically made by chemically reacting lipids with an alcohol....
, propane
Propane
Propane is a three-carbon alkane with the molecular formula , normally a gas, but compressible to a transportable liquid. A by-product of natural gas processing and petroleum refining, it is commonly used as a fuel for engines, oxy-gas torches, barbecues, portable stoves, and residential central...
, compressed natural gas
Compressed natural gas
Compressed natural gas is a fossil fuel substitute for gasoline , diesel, or propane/LPG. Although its combustion does produce greenhouse gases, it is a more environmentally clean alternative to those fuels, and it is much safer than other fuels in the event of a spill...
(CNG), electric batteries
Battery electric vehicle
A battery electric vehicle, or BEV, is a type of electric vehicle that uses chemical energy stored in rechargeable battery packs. BEVs use electric motors and motor controllers instead of, or in addition to, internal combustion engines for propulsion.A battery-only electric vehicle or...
charged from an external source, and hydrogen
Hydrogen vehicle
A hydrogen vehicle is a vehicle that uses hydrogen as its onboard fuel for motive power. Hydrogen vehicles include hydrogen fueled space rockets, as well as automobiles and other transportation vehicles...
. Canada, like most countries, has excise taxes and other taxes on gasoline, diesel, and other liquid and gas motor fuels (collectively called fuel tax
Fuel tax
A fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation...
es), and also taxes electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
at various administrative levels. Most provinces and territories
Provinces and territories of Canada
The provinces and territories of Canada combine to make up the world's second-largest country by area. There are ten provinces and three territories...
in Canada also have taxes on these motor fuels, and some metropolitan area
Metropolitan area
The term metropolitan area refers to a region consisting of a densely populated urban core and its less-populated surrounding territories, sharing industry, infrastructure, and housing. A metropolitan area usually encompasses multiple jurisdictions and municipalities: neighborhoods, townships,...
s such as Montreal, Greater Vancouver, and Victoria
Victoria, British Columbia
Victoria is the capital city of British Columbia, Canada and is located on the southern tip of Vancouver Island off Canada's Pacific coast. The city has a population of about 78,000 within the metropolitan area of Greater Victoria, which has a population of 360,063, the 15th most populous Canadian...
impose additional taxes.
Additionally, Canada's federal (national) government
Government of Canada
The Government of Canada, formally Her Majesty's Government, is the system whereby the federation of Canada is administered by a common authority; in Canadian English, the term can mean either the collective set of institutions or specifically the Queen-in-Council...
collects sales tax
Sales taxes in Canada
In Canada, three types of sales taxes are levied. These are as follows:*Provincial sales taxes , levied by the provinces*Goods and Services Tax , a value-added tax levied by the federal government...
(GST
Goods and Services Tax (Canada)
The Goods and Services Tax is a multi-level value added tax introduced in Canada on January 1, 1991, by then Prime Minister Brian Mulroney and his finance minister Michael Wilson. The GST replaced a hidden 13.5% Manufacturers' Sales Tax ; Mulroney claimed the GST was implemented because the MST...
) across the country, and some provincial governments also collect a provincial sales tax (PST), which may be combined with the GST into a single harmonized sales tax
Harmonized Sales Tax
The Harmonized Sales Tax is the name used in Canada to describe the combination of the federal Goods and Services Tax and the regional Provincial Sales Tax into a single value added sales tax in five of the ten Canadian provinces: Ontario, New Brunswick, Newfoundland and Labrador, British...
(HST). HST, GST, or GST + PST where applicable, are calculated on the retail price including the excise taxes.
Across Canada, motor fuel taxes can vary greatly between locales. On average, about one-third of the total price of gasoline at the pump is tax. Total minimum taxes (taxes before GST/HST/PST is added at the retail level, but including GST/HST/PST on the excise taxes themselves) vary from 17.0 ¢/liter (64.4 ¢/US gallon) in the Yukon
Yukon
Yukon is the westernmost and smallest of Canada's three federal territories. It was named after the Yukon River. The word Yukon means "Great River" in Gwich’in....
to 41.01 ¢/L ($1.552/US gallon) in Greater Vancouver.
Gasoline tax rates across Canada
| Government | Federal excise tax (CAD¢ Canadian dollar The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies... /L Litre pic|200px|right|thumb|One litre is equivalent to this cubeEach side is 10 cm1 litre water = 1 kilogram water The litre is a metric system unit of volume equal to 1 cubic decimetre , to 1,000 cubic centimetres , and to 1/1,000 cubic metre... ) |
Prov/terr excise tax (CAD¢/L) | Local excise tax (CAD¢/L) | Total excise tax (CAD¢/L) | HST Harmonized Sales Tax The Harmonized Sales Tax is the name used in Canada to describe the combination of the federal Goods and Services Tax and the regional Provincial Sales Tax into a single value added sales tax in five of the ten Canadian provinces: Ontario, New Brunswick, Newfoundland and Labrador, British... , GST Goods and Services Tax (Canada) The Goods and Services Tax is a multi-level value added tax introduced in Canada on January 1, 1991, by then Prime Minister Brian Mulroney and his finance minister Michael Wilson. The GST replaced a hidden 13.5% Manufacturers' Sales Tax ; Mulroney claimed the GST was implemented because the MST... , or GST + PST/QST (%) |
Minimum tax incl. sales taxes (CAD¢/L) |
Min. tax (CAD¢/US gal) |
|---|---|---|---|---|---|---|---|
| Canada Canada Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean... (average) |
10 | 14.5 | 24.5 | - | 25.3 | 95.8 | |
| Newfoundland and Labrador Newfoundland and Labrador Newfoundland and Labrador is the easternmost province of Canada. Situated in the country's Atlantic region, it incorporates the island of Newfoundland and mainland Labrador with a combined area of . As of April 2011, the province's estimated population is 508,400... |
10 | 16.5 | 26.5 | 13% | 29.9 | 113.2 | |
| Prince Edward Island Prince Edward Island Prince Edward Island is a Canadian province consisting of an island of the same name, as well as other islands. The maritime province is the smallest in the nation in both land area and population... |
10 | 15.8PEI's fuel tax is adjusted monthly and includes an amount equivalent to PEI's PST. The fuel tax is capped at 15.8¢/L. | 25.8 | 5%PEI's PST does not apply to gasoline or diesel fuel. | 27 | 102.2 | |
| Nova Scotia Nova Scotia Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the... |
10 | 15.5 | 25.5 | 15% | 29.3 | 110.9 | |
| New Brunswick New Brunswick New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area... |
10 | 13.6 | 23.6 | 13% | 26.7 | 101.1 | |
| Quebec Quebec Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level.... Excluding Montreal. |
10 | 15.2 | 25.2 | 13.925%Quebec's QST of 13.5% is applied on top of sales amounts after the GST has been added. | 28.7 | 108.6 | |
| Ontario Ontario Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa.... |
10 | 14.7 | 24.7 | 13% | 27.9 | 105.7 | |
| Manitoba Manitoba Manitoba is a Canadian prairie province with an area of . The province has over 110,000 lakes and has a largely continental climate because of its flat topography. Agriculture, mostly concentrated in the fertile southern and western parts of the province, is vital to the province's economy; other... |
10 | 11.5 | 21.5 | 5%Manitoba's PST does not apply to gasoline or diesel fuel. | 22.6 | 85.6 | |
| Saskatchewan Saskatchewan Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota.... |
10 | 15.0 | 25.0 | 5%Saskatchewan's PST does not apply to gasoline or diesel fuel. | 26.2 | 99.2 | |
| Alberta Alberta Alberta is a province of Canada. It had an estimated population of 3.7 million in 2010 making it the most populous of Canada's three prairie provinces... |
10 | 9.0 | 19.0 | 5% | 20 | 75.7 | |
| British Columbia British Columbia British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858... Excluding Vancouver and Victoria. |
10 | 20.06Includes carbon tax of 5.56 ¢/L as of July 1, 2011 (scheduled to rise to 6.95 ¢/L on July 1, 2012). | 30.06 | 5%HST of 12% applies to gasoline and diesel fuel, but the 7% provincial portion is refunded at the point of sale. However, the full 12% is charged on propane (whether for a vehicle or not) and for diesel fuel marketed as home heating fuel. | 31.56 | 119.5 | |
| Yukon Yukon Yukon is the westernmost and smallest of Canada's three federal territories. It was named after the Yukon River. The word Yukon means "Great River" in Gwich’in.... |
10 | 6.2 | 16.2 | 5% | 17 | 64.4 | |
| Northwest Territories Northwest Territories The Northwest Territories is a federal territory of Canada.Located in northern Canada, the territory borders Canada's two other territories, Yukon to the west and Nunavut to the east, and three provinces: British Columbia to the southwest, and Alberta and Saskatchewan to the south... |
10 | 10.7 | 20.7 | 5% | 21.7 | 82.1 | |
| Nunavut Nunavut Nunavut is the largest and newest federal territory of Canada; it was separated officially from the Northwest Territories on April 1, 1999, via the Nunavut Act and the Nunavut Land Claims Agreement Act, though the actual boundaries had been established in 1993... |
10 | 10.7 | 20.7 | 5% | 21.7 | 82.1 | |
| Montreal, QC | 10 | 15.2 | 1.5 | 26.7 | 13.925% | 30.4 | 115.1 |
| Vancouver, BC | 10 | 14.06 | 15.0 | 39.06 | 5% | 41.01 | 155.2 |
| Victoria, BC Victoria, British Columbia Victoria is the capital city of British Columbia, Canada and is located on the southern tip of Vancouver Island off Canada's Pacific coast. The city has a population of about 78,000 within the metropolitan area of Greater Victoria, which has a population of 360,063, the 15th most populous Canadian... |
10 | 20.06 | 3.5 | 33.56 | 5% | 35.24 | 133.4 |
Notes:
Tax revenues
The Government of CanadaGovernment of Canada
The Government of Canada, formally Her Majesty's Government, is the system whereby the federation of Canada is administered by a common authority; in Canadian English, the term can mean either the collective set of institutions or specifically the Queen-in-Council...
collects about $5 billion per year in excise taxes on gasoline, diesel, and aviation fuel as well as approximately $1.6 billion per year from GST revenues on gasoline and diesel (net of input tax credits). The Canada Revenue Agency
Canada Revenue Agency
The Canada Revenue Agency is a federal agency that administers tax laws for the Government of Canada and for most provinces and territories, international trade legislation, and various social and economic benefit and incentive programs delivered through the tax system...
, a part of the government, collects these taxes.
Collectively, the provincial governments collect approximately $8 billion per year from excise taxes on gasoline and diesel.
The federal taxes go into general coffers and help to fund a range of programs: $2 billion of the approximately $5 billion collected from federal excise taxes goes into the now permanent annual Gas Tax Fund for municipal infrastructure. Provincial tax revenues usually go to fund road repair and construction, and additionally in some provinces a portion of revenues (for example, 2 cents/litre in Ontario) is also distributed directly to municipalities.