Canadian Government Suspends Fuel Tax Amid Rising Airline Costs
Will airlines pass on gas tax relief to consumers? Transport minister won’t say
Ctv News
Image: Ctv News
Transport Minister Steven MacKinnon stated that the Canadian government is monitoring whether airlines will pass savings from a suspended fuel excise tax to consumers. The tax suspension, effective until Labour Day, aims to alleviate the impact of rising fuel prices, but no guarantees were made about airlines' pricing adjustments.
- 01The Canadian government has suspended the federal fuel excise tax on aviation fuel until Labour Day.
- 02Transport Minister Steven MacKinnon could not confirm if airlines would pass savings to consumers.
- 03Airlines are adjusting flight capacities due to high jet fuel costs, with Air Transat and WestJet announcing reductions.
- 04Airfare costs have risen by 2.9% year-over-year as of March 2025.
- 05The government is monitoring airlines to ensure any savings from the tax suspension benefit consumers.
Advertisement
In-Article Ad
In response to soaring fuel prices influenced by geopolitical tensions, the Canadian government has suspended the federal fuel excise tax on aviation fuel until Labour Day. This suspension includes a four-cent per litre tax on aviation fuel and a ten-cent per litre tax on unleaded aviation gasoline. Transport Minister Steven MacKinnon indicated that while the government is closely monitoring airlines, he could not guarantee that these savings would be passed on to consumers. Airlines, facing increased costs, have begun adjusting their flight capacities; Air Transat announced a six percent capacity reduction from May to October, while WestJet is cutting capacity by one percent in April and nearly six percent in June. Additionally, airfare costs have risen by 2.9 percent compared to March 2025, raising concerns about the impact on travelers. The government has expressed its intention to ensure that any financial relief from the tax suspension reaches consumers.
Advertisement
In-Article Ad
The suspension of the fuel excise tax could potentially lower air travel costs if airlines pass on the savings to consumers, which would benefit travelers during the busy summer season.
Advertisement
In-Article Ad
Reader Poll
Do you think airlines should pass on fuel tax savings to consumers?
Connecting to poll...
Read the original article
Visit the source for the complete story.