As of 2026, a typical self-employed tradesperson pays no federal carbon charge on the fuel they buy. The federal consumer fuel charge, the levy most people called the carbon tax, was set to zero on 1 April 2025 and is gone from the price of diesel, gasoline, propane and natural gas across Canada. The industrial carbon pricing system continues, but it only applies to very large emitters. Your truck, your generator and your propane supply are not in scope.
The consumer fuel charge is gone
On 14 March 2025 the federal government announced it would remove the consumer fuel charge, and regulations set the rate to zero for all fuel types effective 1 April 2025. The practical results for a plumber, electrician, landscaper, renovator or HVAC tech are simple:
- No federal carbon levy is embedded in diesel, gasoline, propane or natural gas bought anywhere in Canada from 1 April 2025 onward.
- Filing obligations for the fuel charge ended for all periods after 31 March 2025.
- Existing fuel-charge accounts were automatically cancelled on 1 November 2025. You did not need to do anything.
- You must still keep fuel-charge records for six years, and the CRA can still audit periods before April 2025. If you had outstanding returns or amounts owing for those earlier periods, they still have to be settled.
The Canada Carbon Rebate has ended
The Canada Carbon Rebate for individuals issued its final payment starting 22 April 2025. To receive it you needed to have filed your 2024 personal tax return. The Canada Carbon Rebate for Small Businesses also made its final payment for the 2024 to 2025 fuel-charge year. There are no further payments, because there are no new fuel-charge proceeds to return. If you have still not filed your 2024 return, file it, because the final individual rebate is assessed from that return.
Industrial carbon pricing still exists
Removing the consumer charge did not end all carbon pricing. The federal Output-Based Pricing System (OBPS), under Part 2 of the Greenhouse Gas Pollution Pricing Act, continues. It applies to industrial facilities emitting at least 50,000 tonnes of carbon dioxide equivalent a year, with a voluntary opt-in for facilities between 10,000 and 50,000 tonnes. A one-or-two-vehicle trades business with a shop and some job-site equipment emits nowhere near that. You have no direct OBPS obligations. The OBPS headline price rose to $110 a tonne on 1 April 2026, but that affects oil sands, steel mills and cement plants, not contractors.
What this looks like province by province
- British Columbia eliminated its consumer carbon tax on the same day, 1 April 2025. What remains is the BC OBPS for industrial operations, which is not relevant to a small contractor.
- Alberta dropped the consumer fuel charge when the federal charge was removed, and runs its industrial TIER system for large facilities only. A small contractor is not covered by TIER.
- Quebec is the one province where carbon cost is still embedded in the fuel you buy. Its cap-and-trade system, the SPEDE, applies at the level of fuel distributors, so the cost is built into the wholesale price and passed through at the pump. There is no separate carbon line on your receipt, no registration and no reporting for a small trades business. Quebec fuel is simply priced marginally higher than, say, Ontario fuel because of it.
- Ontario and the rest of Canada: no provincial consumer carbon levy applies to contractor fuel after 1 April 2025. The provinces that relied on the old federal backstop have no replacement consumer charge.
What it means for your pricing
If you built a carbon-charge line into your fuel cost or your travel rate before April 2025, take it out. The cost is no longer there for road fuel, propane or natural gas. The exception is Quebec, where the cap-and-trade cost is baked into the wholesale fuel price rather than charged to you directly, so there is nothing separate to pass on either way.
Common mistakes
- Still quoting a carbon surcharge. The consumer charge ended in April 2025. A separate carbon line on a 2026 quote is wrong and looks dated.
- Assuming all carbon pricing is gone. It is not. Industrial pricing continues, it just does not touch a small contractor.
- Binning your old records early. Keep fuel-charge records for six years. The CRA can still review pre-April-2025 periods.
- Treating Quebec like the rest of Canada. Quebec's cap-and-trade carries on, embedded in the pump price.
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