Motor fuel tax and carbon tax

Motor fuel tax and carbon tax apply when you purchase or use fuel such as gasoline, diesel and propane, unless a specific exemption applies.

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 to 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 (PDF) 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 combustibles (specifically peat, tires, and asphalt shingles) when they are burned to produce heat or energy.

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 (PDF). In some cases, the tax rates are also different depending on where you purchase the fuel and how you use it.

Imported and manufactured fuel

If you import fuel into B.C. or manufacture fuel in B.C. to sell, you must register as a collector (PDF) and pay security. The security is equal to the motor fuel tax and carbon tax that will be collected from the end purchaser on retail sales of that fuel.

If you import fuel into B.C. or manufacture fuel in B.C. for your own use, you must pay motor fuel tax and carbon tax on the fuel you use (PDF).