Canada Fuel & Aviation Status — Air Canada Route Cuts & Refinery Network

Update, 24 September. Canadian pump prices are rising with the global market: the CAA national average for regular gasoline was 181.2¢/L on 23 September, from 179.1¢ a week earlier and 171.5¢ a month ago, below the 190.4¢ peak of 6 May. Diesel is the sharper move, near C$2.72/L and up about 27% in three months (DailyFuels), in line with the global distillate squeeze. The federal fuel excise stays suspended until 31 January 2027, so none of this is tax. Air Canada’s JFK suspensions are scheduled to run to 25 October. There is still no rationing or supply interruption.

Canada's situation is fundamentally different from the UK or Australia: there is no physical fuel shortage. Per aviation management expert John Gradek (McGill University) cited by CBC News, approximately 85% of the jet fuel used in Canada is produced by domestic refineries. Canada has more than half a dozen kerosene-producing refineries — Irving Saint John (the largest in Canada at 320 kb/d), Suncor's Edmonton and Montréal facilities, Imperial Oil's Sarnia, Strathcona and Nanticoke plants, Co-op Regina, and Parkland's Burnaby refinery in BC. The retail fuel network has not seen the kind of station-level outages affecting Australia or the air-cargo cancellations affecting Europe.

What Canada has instead is a price exposure. Even though Canadian refineries produce most of the jet fuel Canadian carriers consume, the wholesale price at which they sell that fuel tracks the Platts Global Jet Fuel Index, which was up more than 70% since February 28 at the spring peak. Jet fuel has moved unevenly since: IATA's benchmark eased to a $116.63/bbl low in late June before rebuilding to $158.77/bbl (latest published read) (an August read, not re-sourced since) as the crisis remains unresolved; on 24 September (Day 208) Hormuz was still rated CRITICAL after Iran’s President rejected a reopening offer at the UN on 23 September. As Gradek put it, Canada is "still beholden to global price spikes." This is why Air Canada has suspended approximately 14 transborder/international routes since April — including the high-volume Toronto–JFK and Montréal–JFK pairs from June 1 through October 25, an INDEFINITE suspension of all Cuba flights from June 5, and Toronto–Salt Lake City from June 30 — citing "the current high cost of jet fuel." Full resumption of the seasonal US routes is deferred to Summer 2027; Cuba has no announced resumption date.

The cause profile is different from Spirit Airlines' May 2 wind-down. Spirit was structural: an ultra-low-cost carrier whose margin model could not absorb fuel-cost pass-through, and the company collapsed entirely. Air Canada is a hedged legacy operator using selective route exits to preserve overall network economics. The routes affected are seasonal transborder pairs where load factor is sensitive to fare elasticity — exactly the kind of marginal routes that become unfavourable first when jet fuel costs double.

WestJet has confirmed a stepped capacity reduction in response to the same fuel-cost pressure: approximately −1% in April, −3% in May, and −5.5% in June — the June step is now live, not planned (per CBC and Open Jaw). The reduction is being implemented by consolidating flights on lower-demand routes and shortening the travel period for seasonal services to several destinations. Earlier in the year WestJet had also removed 15 transborder routes from its summer schedule to mitigate a 32% spike in operational costs. Porter and Air Transat have not announced route suspensions or capacity cuts, but together with Air Canada and WestJet all four major Canadian airlines have introduced fare hikes or fuel surcharges between April and May 2026.

Air Canada has confirmed approximately 14 transborder/international route suspensions year-to-date, including an indefinite Cuba suspension (from Jun 5) and Toronto–Salt Lake City (from Jun 30); full resumption of the seasonal US routes is deferred to Summer 2027.

Canada suspended the federal fuel excise tax on 20 April 2026 in response to the war — 10¢/L on gasoline, 4¢/L on diesel and aviation fuel, set to zero. That suspension runs until and including 7 September 2026. Ottawa acted. On 8 September 2026 the government announced an extension of the suspension rather than letting it lapse: excise stays at zero on gasoline, diesel and aviation fuel through 31 January 2027; 50% of the regular rate applies from 1 February to 31 March 2027 (5¢/L gasoline, 2¢/L diesel); full rates resume 1 April 2027. This page carried the opposite claim from 8 to 19 September, stating that the excise had returned and that pump prices had stepped up by roughly 11¢/L. That was wrong, and the error is corrected here and noted at the top of the page rather than removed. The practical consequence is that the Canadian pump price through this autumn reflects crude and refining margins alone, with no tax step in it — which makes Canada a cleaner read on the global backdrop than most countries, not a noisier one. The Australian comparison below now reads differently too: Australia let its relief expire on 2–3 August and absorbed a real tax step, while Canada deferred. The two are no longer parallel cases, and the natural experiment this page previously described has not run.

The federal government confirmed this month that affordability concerns will factor into the decision, which is being weighed alongside Budget 2026 consultations. The political pressure runs one way: the Conservative leader has asked for the pause to be held until 1 July 2027, Ontario’s premier has called for it to be suspended into 2027 or scrapped entirely, and a Canadian Taxpayers Federation poll last week put opposition to reinstatement at 63%. The Parliamentary Budget Officer costed the holiday at roughly $2.1–2.4bn, with household savings ranging from about $59 in the lowest income quintile to $211 in the highest.

The size of the step matters less than the timing of the offset. Fuel-price analyst Dan McTeague estimates pump prices would rise roughly 10–11¢/L as the tax returns — but the annual switch to cheaper winter-grade gasoline begins later in September and typically takes 8–9¢/L back out. So the likely shape is a sharp increase in the first ten days of September, then a partial and largely coincidental reversal through the second half of the month. Drivers will experience a spike; the monthly average will move far less.

Why it matters: Canada is the clearest case on this site of a country whose pump prices are being set by domestic tax policy rather than by the chokepoint. National average prices peaked at 198¢/L in mid-April, fell to 169.1¢/L within days of the suspension taking effect, spiked back to nearly 196¢/L by mid-May as crude climbed, and have since eased to 170.5¢/L. Across that entire range the physical supply position never changed: Canada produces its own crude, has domestic refining, and has recorded no confirmed fuel shortage at any point in the crisis. What moved was tax and global crude.

The Australian comparison is worth keeping, but it is now a contrast rather than a parallel. Australia unwound its own fuel excise relief on 2–3 August while Canada deferred its own, and the ACCC’s 14 August report found retail prices spiked initially and then eased slightly as international benchmarks fell — the tax step was real but was partly masked within a fortnight by movements in the underlying crude price. Canada is about to run the same experiment with a seasonal tailwind that Australia did not have. GEF holds Canada at WATCH rather than escalating: a tax-driven price step, in a country with no supply disruption, is a cost-of-living event rather than an energy-security one.

The proximate cause of every energy-flow story in 2026 is the closure of the Strait of Hormuz, the narrow waterway between Iran and Oman through which approximately 20% of global oil and a similarly material share of refined-product trade historically transits. The strait has been effectively closed since February 28, 2026. Per the IEA's May 2026 Oil Market Report, cumulative global supply losses since February exceed one billion barrels.

Canada is structurally insulated from the worst of this for one specific reason: domestic refining capacity is large relative to domestic demand. The Irving Oil refinery in Saint John, New Brunswick alone refines roughly 320,000 barrels per day — one of the largest in North America — and exports a meaningful share to the US Northeast. Suncor and Imperial Oil operate large refining clusters in Alberta and Ontario. The aggregate Canadian refining footprint is sufficient to cover the bulk of domestic jet fuel and road fuel demand, and the country is a net exporter of refined products to the US.

The exposure that remains is to price, set on global markets. Canadian crude (notably Western Canadian Select) trades at a discount to Brent and West Texas Intermediate, but Canadian refined-product pricing converges with global benchmarks because Canadian refiners can choose to export to higher-priced markets. When global jet fuel prices double, Canadian airlines pay near-global prices even if the fuel was refined in Sarnia or Saint John. The Platts Global Jet Fuel Index is up more than 70% since February 28; that increase is what drove the Air Canada route economics underwater.

Carbon pricing and provincial fuel-tax regimes mean Canadian retail prices have always been higher than US equivalents. The percentage rise versus pre-conflict baseline has been similar to the US rather than amplified by it — meaning Canadians feel the price increase but not a Canada-specific surcharge.

If you have transborder US summer travel booked with Air Canada, check whether your route is among the 10 suspended through Summer 2027. The Toronto–JFK and Montréal–JFK suspensions for June 1 through October 25 are the most impactful. Affected passengers will be re-routed by Air Canada at no charge under standard cancellation rules — typically onto American Airlines, Delta, or United via codeshare. If you booked through a US-side OTA the re-protection process may take longer to confirm.

If you are flying with WestJet, Porter or Air Transat, expect fare-level rather than schedule-level impact. All three have introduced fuel surcharges or fare hikes between April and May 2026 but no route suspensions yet. Your booked flights are likely to operate as scheduled; the price you paid at booking is what you pay (fuel surcharges apply to new bookings, not existing ones).

If you are flying to Europe, the relevant exposure is at the destination, not at your Canadian origin. EU airports are more exposed than Canadian or US ones; if your destination is the UK, France, Italy, Spain or Greece, monitor European jet fuel inventories — European jet fuel averaged about $207.57 a barrel in the week to 18 September, and smaller airports remain the most exposed.

If you are flying to Cuba, note that Air Canada has suspended all Cuba flights indefinitely since 5 June; check whether your carrier is still operating. Cuba is in the most acute energy crisis in its modern history: the grid collapsed nationwide again on 19 September, the sixth time in 2026, severe shortages of gasoline and diesel, intermittent water supply, and resort generators under heavy load. Canadian tour operators are not formally advising against travel but the Government of Canada travel advisory reflects the deteriorated conditions. Contact your tour operator for resort-level operational status before departure. If you have flexibility on destination, alternative Caribbean choices (Mexico, Dominican Republic, Jamaica) are not currently experiencing the same supply collapse.

If you are concerned about gasoline prices, the practical advice is: check GasBuddy or your provincial price tracker before filling up; prices vary by 10–20 cents per litre across stations even within the same city. There is no station availability problem in Canada. There is a price problem.