Fuel Tax Holiday and EV rebates

Bill C-30 puts the government's Spring 2026 economic update into law. It does three main things. First, it temporarily suspends the federal excise tax on gasoline and diesel. Second, it introduces new affordability measures for electric vehicles, aimed at lowering upfront costs for buyers. Third, it expands the Labour Mobility Deduction, which lets tradespeople write off certain travel and lodging costs when they work far from home.

Drivers see the most immediate change through lower pump prices during the excise tax holiday. New vehicle buyers considering an EV get more support at purchase. Skilled tradespeople who travel for jobs, such as electricians and pipefitters, can deduct more on their taxes. Every taxpayer ultimately shares the cost of the lost revenue through the federal budget.

The federal excise tax on gasoline and diesel is paused for a set period, reducing the per-litre price at the pump. EV affordability provisions adjust how federal supports are delivered to buyers and, in some cases, dealers. The Labour Mobility Deduction ceiling is raised, letting eligible tradespeople claim a larger amount for temporary relocation expenses when filing income tax.

The bill received Royal Assent on June 18, 2026, so it is now law. Measures roll out on the timelines set in the Act. The Canada Revenue Agency and Finance Canada will publish guidance on how to claim the expanded deduction and how the fuel tax pause is applied.