TrendLine Saskatchewan

 

No Saskatchewan Fuel Tax - Impact on the Provincial Economy - September 2025

Expansion of Indigenous businesses could bring a total economic impact of nearly $26 billion in gross economic output.

The Saskatchewan fuel tax is a provincial excise tax applied to differing types of fuel. Currently, the tax rate is 15 cents per litre on clear gasoline and diesel fuel, 9 cents per litre on propane, 15 cents per litre on railway fuel, and 1.5 cents per litre on aviation or aviation turbo gas. Clear gasoline refers to unmarked gasoline. The tax has been stable at these rates since 2006. Marked fuel, which is dyed to indicate partial or full exemption from the tax, is sold only to authorized users with Fuel Tax Exemption Permits. 

The province offers a Farm Fuel Program allowing farmers, fishers, trappers, or loggers to purchase 80% of their diesel fuel tax-free and propane tax-free for certain uses, provided they have the appropriate exemption permits. The tax collected supports provincial revenues, with exemptions reflecting the agricultural sector's fuel needs and totalled $506.3 million in provincial revenues in 2024-2025 (source: 2025-2026 provincial budget). Saskatchewan's fuel tax is a significant part of fuel prices at the pump, contributing to roughly 30% of the pump price along with other levies.

Increases to household spending as a result of the elimination of the fuel tax seem positive initially, generating: 

  • $528 million in gross economic output
  • $323.5 million in gross domestic product
  • $125.9 million in labour income
  • 2,784 jobs 

However, in a purely economic sense, the benefit does not outweigh the cost, as the loss in revenue from the fuel tax would result in:

  • $1.01 billion in lost gross economic output
  • $631.7 million in lost gross domestic product
  • $385.2 million in lost labour income
  • 6,432 in lost jobs 

Resulting in total net impacts of:

  • Net gross economic output decline of $485 million
  • Net gross domestic product decline of $308.2 million
  • Net employment decline of 3,648
  • Net labour income decline of $259.4 million




TrendLine Saskatchewan is published monthly by Praxis Consulting.