⚠ CORRECTION — August 2026. The federal consumer carbon tax (the pump-level fuel charge on diesel) was removed effective April 1, 2025. An earlier version of this article projected a 2027 escalator from 20.9¢ to 24.2¢ per litre and told carriers to put roughly $237,600 a year for a 100-truck fleet into their 2027 budgets and to bill customers a carbon-tax accessorial for it. That charge is not being collected at the pump, so do not budget it and do not bill it. The per-litre figures below are kept only as a record of the pre-2025 schedule and as arithmetic; they are not amounts anyone pays today. See Canada's 2026 fuel tax holiday for the current federal fuel-cost picture.
What does still sit in your diesel price: the Clean Fuel Regulations compliance cost (embedded, rising through 2030), Quebec's cap-and-trade (SPEDE), and federal/provincial industrial carbon pricing where it applies to your facilities. None of those are the consumer fuel charge, and none of them are billed as "the carbon tax" on a rate confirmation.
Canada's consumer fuel charge schedule was legislated through 2030 under the Greenhouse Gas Pollution Pricing Act, stepping up every April 1 by $15 per tonne of CO₂ equivalent. The consumer charge was removed on April 1, 2025 before those later steps took effect, so every row below from 2025 on describes a schedule that was never reached, not a cost you will pay.
Updated October 10, 2026: an earlier version of this article said British Columbia's provincial carbon tax still applied to diesel. British Columbia eliminated its carbon tax effective April 1, 2025, the same day the federal charge ended. Quebec, through cap-and-trade, is now the only province that collects a carbon tax on fuels.
How much was Canada's carbon tax on diesel going to be in 2027?
None of the figures in this section are being charged. They are the arithmetic of a schedule that stopped applying to consumers on April 1, 2025. Under that schedule, the rate would have risen from $110 to $125 per tonne on April 1, 2027, about 33.4¢ per litre of diesel.
The federal fuel charge applied to combustion fuels at a rate derived from their CO₂ emission factor. For diesel (light fuel oil in Finance Canada's rate tables), the formula below uses 2.670 kg CO₂e per litre, which lands within a tenth of a cent of the published per-litre rates.
Working through the math (price per tonne × 2.670 ÷ 1,000), with each rate set to take effect on April 1 of the year shown:
| Year | Carbon Price | Calculation | Per-Litre Fuel Charge |
|---|---|---|---|
| 2024 | $80/tonne | $80 × 2.670 ÷ 1,000 | ~21.4¢/L, the last rate charged (until the charge was removed April 1, 2025) |
| 2025 | $95/tonne | $95 × 2.670 ÷ 1,000 | ~25.4¢/L, never charged |
| 2026 | $110/tonne | $110 × 2.670 ÷ 1,000 | ~29.4¢/L, not charged |
| 2027 | $125/tonne | $125 × 2.670 ÷ 1,000 | ~33.4¢/L, not charged |
| 2030 | $170/tonne | $170 × 2.670 ÷ 1,000 | ~45.4¢/L, not charged |
⚠ An earlier version of this table printed 20.9¢ / 24.2¢ / 37.4¢ for 2026 / 2027 / 2030 and called 20.89¢/L a "published 2026 rate". Those numbers did not follow from the 2.670 factor printed beside them (they implied a factor near 2.2 kg CO₂e/L), and they produced the absurdity of the levy falling from 21.4¢ to 20.9¢ while the carbon price rose from $80 to $95. Both the arithmetic and the underlying premise have been corrected. The $80 row was, and remains, arithmetically correct. Earlier versions also labelled the $80, $95 and $110 rates one year late, as 2025, 2026 and 2027. Finance Canada's schedule set each rate to take effect on April 1 of the year listed: $80 in 2024, $95 in 2025, $110 in 2026 and $125 in 2027.
For context on how carbon and climate policy still reaches trucking economics after the consumer charge was removed, see our 2026 carbon tax impact on trucking analysis and the 2026 fuel tax holiday breakdown.
How does carbon pricing break down by province now?
With the federal consumer fuel charge removed, the answer is: not the way it used to. Canada still has a patchwork of systems, but the federal backstop layer that used to sit on diesel at the pump is gone.
Former federal Fuel Charge (backstop) provinces — no consumer fuel charge on diesel: Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. There is no 2027 per-litre step for these fleets to plan for.
British Columbia (carbon tax eliminated April 1, 2025): BC ran its own provincial carbon tax rather than the federal fuel charge. The province eliminated it effective April 1, 2025, the same date the federal consumer charge was removed, so there is no carbon tax on BC fuel purchases to price in.
Quebec — cap-and-trade (SPEDE): Quebec participates in the Western Climate Initiative cap-and-trade system with California. Carbon costs are embedded in fuel prices through allowance market pricing rather than a fixed per-litre levy. The effective per-litre cost floats with quarterly auction prices. It is unaffected by the removal of the federal consumer fuel charge, and it was never derivable from the federal schedule.
Practical implication for cross-border fleets: on a Toronto–Calgary or Winnipeg–Montreal lane, your diesel cost base now carries no federal consumer fuel charge in Ontario or the former backstop provinces, while Quebec fuel prices still embed the cap-and-trade cost. Blending these in your cost model still matters — but the thing to stop doing is applying a federal per-litre carbon rate uniformly across all fuel purchases, because there isn't one.
What does this cost a typical fleet?
Nothing, from the federal consumer fuel charge. It is not levied on diesel at the pump, so there is no 2026→2027 step to budget and no per-truck delta to scale across a fleet.
The fleet-cost table that used to sit here — $7,524 to $21,780 per truck per year, scaling to +$237,600/year for 100 trucks — has been removed. It priced a charge that is not collected, and it was attached to an instruction to lock that number into 2027 budgets before rate negotiations. Acting on it would have meant over-costing every lane and over-billing every customer who accepted a carbon-tax accessorial.
What to put in a 2027 fuel budget instead: base diesel, the federal excise tax (suspended until January 31, 2027, then scheduled at 2¢ per litre on diesel for February and March and the full 4¢ from April 1, 2027), provincial fuel taxes, HST/GST, the Clean Fuel Regulations compliance cost embedded in the rack price, and, for Quebec fuel purchases, the cap-and-trade cost. Take each of those from a current source, not from the federal schedule above. Leave out any BC carbon tax line: the province eliminated that tax effective April 1, 2025.
For fuel price forecasting context, the Canadian diesel price forecast covers current diesel prices by province, the fuel taxes that change before spring 2027, and the base diesel pricing trends to build that budget on.
How should carriers structure carbon-tax recovery?
⚠ Not by billing a federal carbon-tax accessorial. With no consumer fuel charge on diesel, a line item labelled "carbon tax" on a rate confirmation recovers a cost you are not incurring — which is a billing-dispute and credibility problem, not a recovery strategy. Remove any standing carbon-tax accessorial that was set from the federal schedule.
The general principle below still holds for the policy costs that are real and embedded (Clean Fuel Regulations, Quebec cap-and-trade): price them into base rate or into your fuel surcharge, and if you break them out, label them for what they actually are.
If you break a policy cost out as its own line, quote it in cents per litre or as a flat fee per load based on estimated kilometres, and name the actual programme. Done accurately, that does three things:
- Transparency: Customers understand they are paying a cost created by government policy, not a carrier margin play. This materially reduces billing disputes when the cost changes.
- Passthrough clarity: If the rate changes — in either direction — you can adjust the accessorial without renegotiating the base freight rate.
- Audit trail: In the event of a CRA audit or customer dispute, you have a documented, policy-linked cost line rather than an unexplained rate variance.
Customer communication cadence:
- If you notified customers of an April 1, 2027 federal carbon levy increase on the strength of the earlier version of this article, retract it in writing before contract season. There is no such increase.
- If you have been billing a federal carbon-tax accessorial since April 2025, review what was collected with your accountant. Recovering a charge that is not being levied is a credit-note conversation, not a rate conversation.
- Any future policy-cost line should be announced with the programme named and a current source cited, so it can be checked.
For the mechanics of calculating and presenting fuel-related surcharges, the fuel surcharge guide covers the per-kilometre and per-load calculation frameworks. A fuel surcharge indexed to Canadian retail diesel prices already moves with the policy costs embedded in those prices, such as Quebec's cap-and-trade cost, so a separate carbon line on top of it can bill the same cost twice.
Will the carbon-tax-on-tax issue change?
This was a live grievance while the consumer fuel charge existed: GST/HST applied on top of it, so carriers paid tax on a levy. With the consumer fuel charge removed from diesel, the federal carbon-charge-plus-GST stack no longer arises at the pump. GST/HST of course still applies to the diesel price itself, and registered businesses recover it through input tax credits as normal.
What to plan for: do not carry a federal fuel charge, or GST on it, into any 2027 model, whether the 24.2¢/L an earlier version of this article projected or the 33.4¢/L the old schedule set for April 2027. If you operate in Quebec, check how the cap-and-trade cost is treated for GST and QST there rather than assuming the old federal treatment.
Set up policy-cost lines in TruckerPro
Managing any policy-cost accessorial manually across hundreds of loads is error-prone. In TruckerPro you can create your own accessorial types, each with a name and a default rate, so a policy cost carries a label that is actually accurate for your lanes. Each accessorial you bill on a load prints as its own line on the customer invoice, separate from the freight charge and the fuel surcharge.
When a rate does change, update the type's default rate once; accessorials you add after that start from the new rate. ⚠ If you set up an accessorial type as a federal carbon tax surcharge, review it: the federal consumer fuel charge on diesel was removed on April 1, 2025.
Use the fuel surcharge calculator to work out a per-load fuel surcharge from your base fuel price, the current diesel price, fleet MPG and trip miles before 2027 contract season.