OTTAWA – Transport Minister Steven MacKinnon says the government is closely following whether Canadian airlines will pass along savings to consumers from a gas tax suspension, but he could not guarantee they would.
In response to volatile oil prices amid U.S.-Iran tensions, the federal government is suspending the federal fuel excise tax on gas and diesel until Labour Day. This means an excise tax of four cents per litre on aviation fuel and 10 cents per litre on unleaded aviation gasoline will be temporarily paused.
Speaking to CTV’s Power Play with Vassy Kapelos on Wednesday, MacKinnon would not answer directly on whether the federal government secured any reassurances from airlines that any cost relief would be passed onto consumers.
He also said: “There’s just no way to sugarcoat or get around the fact that fuel prices are skyrocketing,” and “that’s why the government acted.”
“We have obviously let the airlines know that we’ll be watching to make sure that those savings get passed on,” he later added.
Pressed by Kapelos for clarity on the issue, MacKinnon said the federal government “accepted the argument” that increased revenues from the fuel tax “should be passed back to consumers in the form of these excise fuel cuts.”
In recent weeks, airlines have been adjusting their flight capacity during the critical summer travel season because of high jet fuel costs.
Air Transat announced on Wednesday that it will reduce its capacity by six per cent from May through October.
Earlier this week, Calgary-based WestJet said its reducing capacity by one per cent in April, three per cent in May and nearly six per cent in June.
Air Canada, meanwhile, announced last week it would suspend six routes, both domestic and cross-border, amid the war in the Middle East.
Most Canadian airlines have also added fuel surcharges to vacation packages or bookings made via loyalty points.
New data released by Statistics Canada on Monday showed airfare costs this March have climbed 2.9 per cent compared to March 2025.
The last time the consumer price index notched a year-over-year increase for air travel was June 2024.
With files from The Canadian Press
