Conservatives call for boost in Canadian diesel production, cut to diesel taxes

Canada should boost diesel production to one million barrels per day as fuel prices continue to soar, Conservative members of Parliament said Tuesday.

The wars in Iran and Ukraine have driven up fuel prices, including for diesel, in recent month. Natural Resources Canada reports the average retail price of diesel across the country on Tuesday was almost $2.60, up more than $1.06 from where it was a year ago.

At a news conference outside the House of Commons Tuesday morning, Conservative energy critic Carol Anstey said Canadians are paying 31 cents more per litre of diesel fuel than the global average.

"Fuel costs do not stop at the pump," Anstey said.

"Every increase drives the cost of producing our food, transporting our goods and building homes, with every increase being felt in household budgets."

A Conservative motion put before the House of Commons Tuesday called for the government to act.

The party wants an end to federal taxes on diesel fuel until Canada Day, as well as tax relief for building diesel infrastructure such as pipelines, refineries, rail and storage.

"Canada has the resources, skilled workers and expertise to build a stronger, more reliable fuel supply," Anstey said. 

"We should be putting those advantages to work to create jobs, reduce our dependence on outside suppliers and protect Canadians from supply disruptions."

The motion says the government should set a goal of boosting Canadian diesel production to one million barrels a day.

Canada's refineries, however, are already running at near-capacity. A report in March from the Canada Energy Regulator said crude oil refineries were using 1.6 million barrels per day, which was 90 per cent of their capacity.

"The government is in continuous contact with refiners who are maximizing their diesel production capacity to meet circumstances," said John Fragos, the press secretary to Finance Minister François-Philippe Champagne.

"Canada produces approximately the exact amount of diesel we consume, which affords us domestic market security. We are currently a net exporter of diesel, meaning any additional production goes towards servicing export markets.”

In an interview with The Canadian Press following the press conference, Anstey pointed to a statement from Natural Resources Minister Tim Hodgson from March in which he said more Canadian energy exports around the world "will support global market supply, which should help alleviate price increases Canadians are feeling at the pump."

Anstey also said the refineries being near capacity "strengthens" her party's calls for increased production.

"Another part of this is to build up a strategic energy reserve so that we've got that insulation there whenever there's a disruption," Anstey told The Canadian Press. 

"Just to provide an environment where we can have more investment and potentially grow production in that space," Anstey said.

Conservative Leader Pierre Poilievre renewed calls for an energy reserve when the House of Commons returned on Monday, but that call wasn't part of the Conservative energy motion on Tuesday.

"This is a serious concern to Canadians and we know that's driving up the cost of everything. So I suspect that we want to make sure we offer some sound policy positions on this, so I would suspect that's probably why it didn't get put into this motion," Anstey said.

"But certainly we take the position that this is something that we think we should be doing, as we are the only G7 country right now that doesn't have a strategic oil reserve. And just especially given the environment that we're in right now with global forces, I think this is something that we want to look at probably a little bit more carefully and come up with some good policy positions on."

The International Energy Agency requires its members to maintain a strategic oil reserve. Canada, as a net exporter of oil, is exempt from that requirement.

This report by The Canadian Press was first published Oct. 6, 2026.

By Nick Murray | Copyright 2026, The Canadian Press. All rights reserved.