Industry News · Taxes
Federal Fuel Excise Tax Suspension Extended to January 31, 2027
Restaurants Canada welcomed the extension on September 2, citing gas costs up an average of 46 percent since December 2025 and supplier fuel surcharges reported by 86 percent of restaurants.
September 4, 2026 · 2 min read
The federal government is extending its suspension of the federal fuel excise tax until January 31, 2027, and Restaurants Canada welcomed the move in a statement published September 2, 2026. The extension holds down a cost that reaches restaurant, delivery and logistics operators both at the pump and through supplier surcharges. For an owner, the operative detail is the date, because a relief with a known end puts the step-up after it on the budget calendar.
The cost pressure behind the extension
Restaurants Canada framed the extension as a response to fuel-cost pressure on operators and consumers. Gas costs have risen by an average of 46 percent since December 2025, per the association's September 2 statement, feeding higher food and transportation costs.
Eighty-six percent of restaurants report paying supplier fuel surcharges, according to the same statement. The statement places those surcharges alongside higher food and transportation costs, all traced to the same gas-cost increase.
Where operators are sitting when the relief arrives
The September 2 statement also reports what fuel costs have done on the demand side. Fifty-seven percent of restaurants report fewer customers, and 54 percent report reduced customer spending per visit, as a result of fuel cost increases.
Forty-one percent of restaurants are currently operating at a loss or just breaking even, per the September 2 statement. Those operators have "very limited capacity to absorb further increases in operating costs," the association wrote.
What Restaurants Canada said
The association framed the extension as recognition of ongoing pressure, not as a fix. It said it appreciates the government "recognizing the need to address these ongoing pressures in an uncertain economic environment," and that it will keep working with the federal government to reduce the cost burden on operators.
The same statement puts the foodservice sector at 4 percent of Canada's GDP and 1.2 million jobs. It ties the association's continued advocacy to the current trade conflict and to how tariffs and support measures are targeted.
PFG’s View
A dated relief is a financing calendar item. The suspension runs to January 31, 2027, so an operator can price the fuel and surcharge line twice, once with the suspension in place and once without it, and see what the step-up does to a monthly cash position. PFG's tax accounting work tracks dated federal measures for that reason.
A lender reads a margin squeeze differently than a demand drop. Surcharge pressure on supplier costs is an input story with a policy date attached and invoice detail behind it, so an operator can total twelve months of surcharge lines and know the figure before a lender asks for it. Fewer customers through the door is a revenue story, and it underwrites harder.
Timing matters more than the amount. Working capital is easier to arrange while the trailing twelve months still look ordinary, and harder once those statements carry the squeeze, because at that point the ask is to fund a decline. PFG's walkthrough of qualifying for a government-backed business loan in Canada covers what those trailing financials need to show a lender.
Budget the step-up now. Arrange the working capital while the statements still read ordinary.
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