Alberta is slashing the provincial gasoline tax beginning Oct. 1, reversing course on an energy rebate program introduced in June that provided a one-time $100 payment instead of a fuel-tax cut.
Until the end of the year, Albertans can expect the 13 cent-per-litre levy to be dropped from their bill at the pumps.
“We did also hear from Albertans that they’d rather get relief directly at the pumps, and so that’s what we’re going to do,” said Premier Danielle Smith at a Calgary Chamber of Commerce event Tuesday.
Alberta has a legislated tax relief program that enables fuel taxes to be reduced should oil prices remain above a certain threshold across a review period at the start of each quarter.
High resource revenues turned the province’s financial futures around this year, converting a projected $9.4-billion deficit into a $2-billion surplus as of the first quarter fiscal update in August.
Over the latest review period, the price of oil averaged $90.54, just above the $90 threshold required to drop the fuel tax entirely for the next fiscal quarter. Under the policy, the following quarter can also post fuel taxes no higher than nine cents per litre.
Despite prices above $90 per barrel last quarter, the Alberta government chose to maintain the tax and issue a one-time $100 rebate program instead.
When the government rejected the tax break in June, Smith said the replacement rebate program would deliver 50 per cent more savings than the federal fuel tax suspension introduced in April.
“When the federal government suspended its 10 cents a litre fuel excise tax earlier this year, those savings were seemingly erased at the pumps within days,” she said at a press conference in June.
“Rather than relying on retailers to pass on the fuel tax relief, this approach will ensure elevated oil revenues deliver real benefits to Albertans — benefits that don’t disappear at the pumps.”
To receive the rebate, eligible Albertans were asked to apply through an online portal. However, only 1.2 million of 3.4 million eligible Albertans received the money.
Talking to reporters Tuesday, Finance Minister Jason Nixon blamed the online application system for the rebate program’s failure.
Smith says the total relief from the tax break is expected to be $475 million, a substantial increase from the roughly $120 million distributed under the rebate program.
The average price of fuel in Alberta was 175.5 cents per litre as of Sept. 21, below the national average of 189.8 cents per litre.
Still, Nixon says his government remains concerned that consumers may not notice the tax cut.
“Last time we did this, there were a lot of challenges making sure that this was passed on to the people of Alberta,” he said at Tuesday’s media availability. “We’re still in a spot where I’m not sure we can guarantee it will be passed on.”
September 23rd 2026
