Motor Fuel & Carbon Tax

Motor Fuel Tax & Carbon Tax

Tax Rates

The tax rates for motor fuel tax and carbon tax vary depending on the type of fuel and if the fuel is clear or coloured. In some cases, the tax rates are also different depending on where you purchase the fuel and how you use it.

Motor Fuel Tax

Motor fuel tax applies to fuel sold for use or used to power internal combustion engines (e.g. cars, boats, airplanes, stationary engines etc.) and propane for any use, unless a specific exemption applies.

If fuel (except propane) is sold for use other than in an internal combustion engine, motor fuel tax doesn't apply so long as specific invoicing and other requirements are met.

When the tax is charged on clear gasoline and clear diesel fuel there are also dedicated taxes (see below) added to the tax that apply in certain regions of the province and go to:

  • South Coast British Columbia Transportation Authority (TransLink)
  • British Columbia Transit Authority (BC Transit)
  • British Columbia Transportation Financing Authority (BCTFA)

Carbon Tax

Carbon tax applies to the purchase or use of fuels such as gasoline, diesel, natural gas, heating fuel, propane and coal, unless a specific exemption applies. The use of fuel includes all uses, even if the fuel isn't combusted. Carbon tax also applies to the use of combustibles, such as peat and tires, when used to produce energy or heat.

Exemptions from Motor Fuel & Carbon Taxes

The following fuel is exempt from both motor fuel tax and carbon tax:

  • Fuel sold and exported outside B.C. under certain conditions
  • Locomotive fuel purchased by an inter-jurisdictional rail service that is a registered consumer
  • Fuel purchased on First Nations land by an eligible First Nations individual or band
  • Coloured fuel purchased by a qualifying farmer that is delivered to their farm land
  • Fuel purchased by a visiting force or member of the diplomatic and consular corps

Federal Gas Excise Rates

On top of these taxes the Federal government also requires taxes on fuel (see below)


GST also applies to your final gas receipt