Alberta drivers will be spared the province’s 13-cent-per-litre fuel tax starting Oct. 1 and running through the end of the year, Premier Danielle Smith announced Tuesday during a speech to the Calgary Chamber of Commerce.
Smith framed the move as a cost-saving measure for Albertans facing rising fuel prices tied to global instability. She told the audience that a driver filling a 60-litre tank would save $38 more than someone doing the same fill-up in Labrador, calling it evidence of the province’s competitive advantage on costs.
Finance Minister Jason Nixon said the government will continue monitoring oil prices to set the fuel tax rate for the following quarter, suggesting a minimum waiver of nine cents off the tax could be in place after that. The suspension follows a provincial review of West Texas Intermediate crude prices, which averaged $90.54 in the third quarter. Under Alberta’s existing formula, the fuel tax is fully waived when WTI prices exceed $90 a barrel and partially waived once prices pass $80.
Alongside the tax suspension, the province said it will keep watch for price gouging by businesses, with penalties of up to $300,000 in fines and as much as two years in jail for violators.
Mixed Reaction From Business and Political Groups
Calgary Chamber of Commerce president Deborah Yedlin welcomed the announcement, saying it offers relief to businesses and consumers dealing with fuel costs that have climbed amid the ongoing U.S. war on Iran and renewed pressure from U.S. tariffs. She said lower fuel costs would help businesses manage expenses and stay competitive.
The Canadian Taxpayers Federation also praised the decision. Alberta director Kris Sims said cheaper fuel makes commuting more affordable and helps businesses move goods to stores, calling the tax suspension a win for both consumers and companies.
Not everyone was as supportive. Alberta NDP Leader Naheed Nenshi criticized the timing, noting the government had opposed waiving the fuel tax for months before reversing course. He linked the announcement to the governing party’s recent byelection loss in Calgary-Shaw, describing the move as a temporary measure rather than a long-term plan.
The UCP government had declined to suspend the fuel tax back in June, opting instead for a one-time, tax-free $100 rebate for Alberta households earning $225,000 or less annually.
Announcement Comes Ahead of Referendum Vote
Smith’s speech doubled as a pitch for her government’s economic record ahead of an Oct. 19 referendum in which Albertans will vote on the province’s place within the Canadian federation. She pointed to several investments she said demonstrate that her government’s push for concessions from Ottawa is paying off, including Meta’s planned data centre campus, the Greenlight Energy Centre, in Sturgeon County.
She also referenced Ottawa’s recent decision to exclude new oilsands facilities and gas-fired power plants from environmental assessment requirements under Bill C-69, a law that has drawn opposition from industry groups. Smith said her government has paired that with its own expedited 120-day approval process for major projects.
On the referendum itself, Smith said she understood public frustration but argued that provincial pressure on the federal government was producing results. She spoke against a binding referendum question aimed at boosting Alberta’s leverage with Ottawa, instead pointing to nine other ballot questions covering issues such as electing provincial judges, opting out of federal programs, and restricting certain provincially funded programs to citizens and permanent residents, which she said would give her government a stronger path to greater independence from Ottawa.
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