No plans to suspend provincial fuel tax until after July at earliest: Danielle Smith

Alberta Premier Danielle Smith answers questions at a news conference in Calgary, on Friday, Feb. 20, 2026. THE CANADIAN PRESS/Todd Korol

The federal gas tax is officially suspended as of Saturday but the provincial gas tax remains.

Last week, Prime Minister Mark Carney announced the federal excise tax on gas and diesel would be suspended until Sept. 7, which is expected to save drivers up to 10 cents a litre at the pumps.

But Premier Danielle Smith confirmed on her radio show Your Premier, Your Province Saturday that the province won’t drop its 13 cents a litre tax -- until at least July.

She noted that oil prices have been dropping and then climbing dramatically over the past week, and her government wants to wait until next month before they start looking at suspending the tax.

When asked if Carney’s decision to suspend the federal fuel tax through early September puts more pressure on her to do the same with the provincial fuel tax, she said it did -- but not yet.

“Yes, I’m waiting until July 1 and yesterday was a prime example (why),” she said.

“Prices dropped to $80 on WTI on news that they had come to an agreement on (opening the Straits of) Hormuz,” she said.

“We have to be mindful that just as quickly as prices escalated, they can come down that quickly again. So in the past six weeks as we’ve been monitoring it, prices have started off around $65, went as high as $115, came back down to $80 and I think now are trading at $85 – this is why we can’t make decisions based on a single point in time today."

Smith says most of the province’s $1.7 billion roads funding comes from the provincial fuel tax.

“We have a very strong connection between what the average person pays in fuel taxes and making sure we’re keeping our roads up to date,” she said.

“But we also know when we get windfalls, that some of those dollars should be returned to taxpayers – that’s how we operate as a conservative government –- but you have to realize the windfall before you spend it," she said.

“That’s why we wait for an entire (fiscal) quarter so we can assess did we get enough dollars in so that we can afford to rebate some back to taxpayers.

“So I would ask people to be patient,” she added.

“The window that we look at is between May 15th and June 16th, and if it’s trending above $90 at that point at that period of time, then the entire 13 cent tax will come off for the next quarter,” she said.

Suspend the tax: NDP and Taxpayers Federation

The NDP and the Canadian Taxpayers Federation have both called on the province to suspend the tax.

Alberta Opposition NDP Leader Naheed Nenshi has been calling on the UCP to drop the levy, since the military conflict in the Middle East sent energy costs soaring.

Nenshi says the province needs to be more nimble in the face of extraordinary price fluctuations but that it appears to be padding its pockets with royalty revenues while Albertans struggle.

The Canadian Taxpayers Federation says the temporary pause is a relief for many, but it needs to be made permanent.

“At least he’s (Carney) providing some relief. The Alberta government has to cut gas taxes as well,” said CTF President Franco Terrazzano.

Terrazzano adds that Alberta must now eliminate its portion of taxes on fuel instead of waiting for its formula to kick in.

“They are trying to use long division as a reason why they’re not cutting taxes. But, look, Albertans are struggling with how expensive everything is. Albertans want tax cuts, and the Alberta government needs to make that happen.”

With files from The Canadian Press, CTV’s Stephanie Ha and Tyson Fedor