News / Air & Airports

Fuel tax holiday “a meaningful first step,” says WestJet, but surcharges will remain

Michael Pihach

04-15-2026 9:07 am

Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and DailyXtra.ca. Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

This story was updated on Wednesday, April 15 at 5:08 p.m. EST

A day after securing a majority in the House of Commons by winning three byelections in Ontario and Quebec, Prime Minister Mark Carney announced a temporary suspension of the federal excise tax on gasoline and diesel.

The pause, expected to cost around $2.4 billion, will lower gasoline prices by 10 cents per litre and diesel by four cents per litre, beginning Monday and remaining in effect until Labour Day.

"We all know that because of the war with Iran fuel prices have increased sharply around the world including right here in Canada," Carney told media in Ottawa on Tuesday (April 14).

"Today's cut to the fuel excise tax is a responsible temporary measure consistent with what it takes to build a stronger economy, a more affordable economy combined with sound fiscal management."

The move will also impact Canada’s airlines, removing a four cent per litre tax on aviation fuel.

Carriers worldwide are raising ticket prices, reducing select routes and implementing fuel surcharges in response to soaring oil costs triggered by the conflict in Iran – and Canada is no exception.

Jet fuel typically accounts for approximately 20 per cent of an airline’s costs, and as previously reported, companies have warned that a surge in fuel prices could cost the aviation industry hundreds of millions of dollars.

“A meaningful first step,” says WestJet

WestJet, yesterday, was the first Canadian airline to publicly applaud Ottawa’s decision to lift the national excise tax on gas and aviation fuel.

“It is a meaningful first step that will help support Canada’s aviation industry during this challenging time,” the airline wrote on its LinkedIn page. “Aviation plays a critical role in Canada’s economy and in connecting a vast and geographically diverse nation, supporting the essential connectivity that keeps Canadians linked to their communities, businesses, and loved ones across the country and beyond.”

“Having the support of our government partners enables our industry to continue doing what it does best — keeping Canadians connected.”

Does it affect fuel surcharges?

But the question remains: does Carney’s tax holiday eliminate the fuel surcharges that airlines and tour operators have introduced in recent weeks?

As previously reported, WestJet Rewards, on April 8, introduced a temporary fuel surcharge of $60 on all bookings made with a companion voucher.

The WestJet Group is also applying a fuel surcharge of $50 per person to bookings with Sunwing Vacations and Vacances WestJet Québec that are made as of April 14.

In a statement to PAX, WestJet implied that its fuel surcharges are here to stay.

“We greatly appreciate the federal government’s decision to lift the national excise tax on gas and jet fuel to mitigate pressures for the sector and travellers,” the company wrote in an email on Tuesday.

(WestJet)

However: the tax relief represents “less than five per cent of the amount by which the jet fuel cost increased on domestic flights since the beginning of the Middle East crisis.”

“While this measure is both welcome and an important first step, additional efforts will be needed to deliver more meaningful relief and support a broader shift in costs,” the airline said.

No changes to VIPorter

Porter Airlines has also introduced a temporary fuel surcharge. However, as reported, it applies only to VIPorter flight redemptions (as opposed to regular purchases).

In an email to PAX on Wednesday (April 15), the airline stated that flight redemptions account for “a very small percentage of purchases” and confirmed that its fuel surcharge will remain in effect until overall fuel costs return to prior levels.

(Porter Airlines)

“The government's attention to the pressing issue of rising fuel costs is greatly appreciated as this represents the highest cost of airline operations,” the Toronto-based airline wrote. “Temporarily removing the four cents per litre aviation fuel tax will factor into overall operating costs and be represented as part of the total airfare passengers see. Base fares adjust for variable fuel prices on a route-by-route basis.”

Porter says it will continue to monitor the situation closely.

In a statement to PAX, Flair Airlines said it welcomes the federal government’s decision to temporarily suspend the national excise tax on gas and aviation fuel.

"It’s a positive step in supporting Canada’s aviation sector," wrote Kim Bowie, director of communications at Flair, in an email Wednesday. "While this helps, fuel costs remain volatile. Our current approach remains unchanged as we continue to assess market conditions.”

PAX also reached out to Air Transat, with a spokesperson saying that the airline won’t benefit from the fuel tax cut.

"International flights are not subject to the federal excise tax, and Air Transat only operates international flights – with a few exceptions for connection purposes. Therefore, Air Transat will not benefit from this measure," the airline said.

PAX has also reached out to Air Canada Vacations to determine whether any adjustments have been made in response to the tax break.

Disruptions could persist for months

Jet fuel disruptions could persist for months, even if the Strait of Hormuz fully reopens, officials say, underscoring ongoing pressure on airline operations and pricing.

"If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East," said Willie Walsh, director general of the International Air Transport Association (IATA), in recent comments.

As reported by Reuters, a temporary ceasefire in the Middle East has raised hopes for improved oil flows, but aviation leaders say the impact on jet fuel availability will take longer to resolve.

The issue is not just access to crude oil, but damage to refining infrastructure across the Middle East, which continues to constrain jet fuel production.

U.S. blockade having little impact

On Tuesday, the first full day of a U.S. blockade on vessels heading to Iranian ports appeared to have little immediate impact on shipping through the Strait of Hormuz, with tracking data indicating that at least eight ships continued to pass through the key waterway, Reuters reports.

The move followed an announcement by U.S. President Donald Trump on Sunday, after weekend negotiations in Islamabad between the U.S. and Iran failed to produce an agreement.

According to Reuters, industry sources say the measures have added to growing uncertainty for shipping companies, oil firms, and war-risk insurers.

However, traffic levels remain sharply reduced compared with the more than 130 daily crossings recorded before the conflict involving the United States and Israel against Iran began on February 28.

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