Taxation

Propane is treated favourably against gasoline and diesel when it comes to taxation in Canada.

Federal Tax Treatment

The federal excise tax, which is a tax on non-essential consumer goods, is a flat rate of 10 cents per litre for gasoline and 4 cents per litre for diesel fuel.
Propane is exempt from this tax.

Provincial Tax Treatment

Provincial automobile fuel taxes for propane are also lower than both gasoline and diesel in every Canadian province and territory¹:

* Gasoline, diesel and propane taxes are reduced by varying amounts in certain remote areas and within 20 kilometres of the provincial and U.S. borders. The Quebec provincial retail sales tax (QST) applies to all products. In Montreal and surrounding municipalities an urban tax of 1.5 cents per litre is also added to gasoline.
** Gasoline is taxed 6.4 cents per litre in communities not served by a highway system.

Municipal Tax Treatment

In addition to the provincial and federal tax advantages noted above, the cities of Montreal, Vancouver and Victoria also charge a “Transportation Tax” on gasoline and diesel, and again, propane is exempt from this tax.

Other Taxes

There have been recent developments towards a carbon tax in some provincial and municipal jurisdictions. Please check back, as we will have more information on these carbon taxes soon.

Rebates and Incentives

In addition to these tax advantages for Propane-use as a transportation fuel, several rebates and incentives exist to encourage the use of clean-burning propane. Learn More…

¹ Source: NRCan Fuel Focus, Energy Facts, Taxes on Petroleum Products, January 2008
http://nrcan.gc.ca/eneene/sources/pripri/taxpet-eng.php 
  

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