Canada to extend gas tax break on Iran war energy costs - Bloomberg

The Canadian government is set to prolong the suspension of the fuel excise tax until early 2027 due to escalating energy costs resulting from the ongoing war in Iran, according to Bloomberg. The tax break announcement is expected later on Wednesday, according to a senior government source.

Initially introduced in April, the reduction in gasoline prices by approximately 10 Canadian cents per liter and diesel by around 4 Canadian cents was initially slated to expire on September 7. The measure also encompasses aircraft fuel. The tax break was anticipated to incur a fiscal cost of roughly C$2.4 billion ($1.7 billion) for the federal treasury.

In Canada, gasoline is subject to an additional 5% goods and services tax. The conflict has led to a surge in crude oil prices, which are currently around 30% higher than they were prior to the war's commencement this year. The war has disrupted maritime traffic in the Strait of Hormuz, a critical waterway through which about a fifth of the world's oil and liquefied natural gas once passed.