Excise fuel tax suspension providing ‘minimal’ relief to Canadian air travellers, Senate committee hears

Ottawa – Air travellers are seeing little relief on airfares despite the federal government’s suspension of the federal fuel excise tax on April 20, 2026, the Senate Committee on Transport and Communications heard during recent committee testimony.

Airline representatives welcomed the government’s decision to suspend the federal excise tax on aviation fuels from April 20 to September 7, 2026. But witnesses noted this measure represents only a small proportion of aviation fuel costs and said that the exemption applies only to fuel used on domestic flights; Air Canada executive David Rheault said the value of the reduction represents just 0.5% of the carrier’s total fuel costs from 2025.

Witnesses explained that the Canadian air transport sector operates under a user-pay system and that many of the fees and taxes are passed on to passengers. Depending on the route, airfare may include security fees, airport improvement fees, navigation fees, fuel surcharges, taxes, and other types of surcharges — in addition to the base fare. Witnesses also stressed that airfare costs are also influenced by other factors, such as supply and demand, fuel prices, labour, maintenance, and regulatory requirements.

Jeff Morrison, CEO of National Airlines Council of Canada — a trade association representing Canada’s largest passenger airlines — noted that jet fuel prices more than doubled in March and April 2026 and that the costs of refining it have tripled. While the council welcomed the temporary removal of the fuel excise tax, “its impact on fares is minimal,” he said. Savings to customers, he added, amount to $1.50 to $2 per domestic passenger.

WestJet executive John Weatherill said domestic flights generate “a profit per passenger in line with what some pay for a cup of coffee at Starbucks.” With fuel costs increasing by about $40 per passenger, airlines cannot absorb the shock. He told the committee that, in real terms, average domestic airfares paid to airlines declined by 50% between 1994 and 2004, but that third-party fees and taxes increased by 65% over that time period.

The committee accepts the submissions from industry and will continue to monitor this issue.

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For more information:

Chelsea DeFazio
Communications Officer | Senate of Canada
343-576-1481| chelsea.defazio@sen.parl.gc.ca