Authority: Fuel Tax Act, R.S.O. 1990, c. F.35, esp. ss. 2(7), 2(7.1), 3.9, 4.18, 4.19; R.R.O. 1990, Reg. 464; Ontario Ministry of Finance Tax Bulletin "Coloured Fuel" (https://www.fin.gov.on.ca/en/bulletins/ft/1_2001.html) and consolidated guidance at https://www.ontario.ca/document/fuel-tax/coloured-fuel.
Coloured fuel is diesel (or similar middle distillate) dyed red at 170–190 ppm by a registered dyer in accordance with the Act and Reg. 464. Per the Ministry: "Coloured fuel may be used for any reason other than to generate power in a licensed motor vehicle or when a motor vehicle or vessel … is operated principally for pleasure or recreation." Permitted uses include home heating, lighting, cooking, and powering unlicensed off-road construction or farm equipment.
Two narrow exceptions: (a) First Nations individuals registered under the Indian Act (Canada) and First Nations bands may use coloured fuel in licensed vehicles where the fuel is acquired on a reserve; and (b) railway operators registered with the Ministry of Finance may use coloured or clear fuel in locomotives at a 4.5 ¢/L tax rate. A "practice of the ministry" also permits coloured fuel "for any purpose in remote Northern locations" (north of the 51st parallel, with specified highway-radius exclusions).
Fuel Tax Act s. 2(7.1): "No person shall place or cause to be placed any unauthorized fuel in a fuel tank of a motor vehicle to which a number plate is attached as required under the Highway Traffic Act." The prohibition applies even when the vehicle is operated primarily for farming, construction, forestry, or mining. See op-farm-plated-coloured-fuel-rule for the farm-plated truck application.
Per Ministry guidance, "Receipts and other records must be kept for 7 years." Bulk purchases must show product, quantity, price, date, vendor identity, the purchaser's name and address, and the amount of Ontario fuel tax paid. The burden of proof on a tax assessment is on the purchaser.
Per Ministry Tax Bulletin "Coloured Fuel" and the Provincial Offences Act set-fine schedule, plus Act ss. 3.9(2) and 4.19(1):
| Offence | Authority | Amount |
|---|---|---|
| First-offence improper use of coloured fuel (set fine, POA Certificate of Offence) | POA Set Fines schedule; Fuel Tax Act regulatory offence | see set-fine note below |
| Refusal to permit inspection | Fuel Tax Act | up to $1,000 per refusal |
| Tampering with coloured fuel, or seals/labels; selling coloured fuel as clear; unauthorized colouring | Fuel Tax Act s. 4.19(1) and adjacent | up to $1,000,000 and/or 2 years imprisonment |
| Sale of fuel as coloured when not properly dyed (collector/distributor/dyer) | Fuel Tax Act s. 3.9(2) | not less than $200, not more than $10,000, plus 3× the tax that would be payable if sold as clear |
| Subsequent penalty for improper use | Fuel Tax Act, per "Coloured Fuel" bulletin | 10× the tax that would be payable if the fuel were clear |
| Assessed penalty for improper use or tampering (administrative, on audit) | Fuel Tax Act | up to 13× the tax |
| Plate / driver-licence suspension under the Fuel Tax Act | no Fuel Tax Act authority | see reg-fuel-tax-act-ontario; suspension can arise indirectly through POA s. 69 / HTA default-fine pathway only |
Payment of any fine or penalty does not extinguish the underlying tax liability.
Ontario's own two published pages disagree on the first-offence set fine. The "Attention Truckers" pamphlet (fin.gov.on.ca/en/bulletins/ft/pamphlet_truckersdyeddiesel.html and the mirror at ontario.ca/document/fuel-tax/attention-truckers-no-dyed-diesel-highway) states $440. The "Coloured Fuel" overview page (ontario.ca/document/fuel-tax/coloured-fuel) lists $465. The Ontario Court of Justice Set Fines schedule is the authoritative source and prevails over either Ministry page in isolation. B&J's customer-facing copy should not assert a specific dollar number sourced to either Ministry page; either cite the OCJ schedule directly or omit the dollar amount and frame the exposure around the 3×/10× tax-back-charge ladder. The 3×-tax / 10×-tax penalty ladder is consistent across both Ministry pages and is the meaningful exposure.
Coloured-fuel storage and dispensing equipment must carry the Ministry of Finance-issued labels and tags. Order via the Ministry's general line — 1-866-ONT-TAXS (1-866-668-8297). The label/tag requirement is statutory under the Fuel Tax Act and Reg. 464; the colour-symbol scheme on the tank exterior comes separately via the Ontario Fire Code reference to the CFA Colour-Symbol System (see op-tank-labelling-colour-scheme).
The Ministry of Finance publishes a Voluntary Disclosure bulletin permitting taxpayers to come forward and correct Fuel Tax Act non-compliance before the Ministry initiates an audit, in exchange for waiver or reduction of penalties (the underlying tax still owes). The pathway applies to fuel-tax shortfalls discovered post-fact — for example, dye in a licensed-vehicle tank discovered after the fact, or unrecorded coloured-fuel sales. Conditions: voluntary (not under audit notice), complete (full disclosure of the issue), and the disclosure must be of an issue not already known to the Ministry. See op-coloured-fuel-enforcement-reality-ontario for the broader enforcement frame.
Confidence: verified (primary source confirmed 2026-05-13; the $440 vs $465 inconsistency is itself a verified discrepancy between two Ontario-published pages).
Authority: Fuel Tax Act, R.S.O. 1990, c. F.35, esp. ss. 2(7), 2(7.1), 3.9, 4.18, 4.19; R.R.O. 1990, Reg. 464; Ontario Ministry of Finance Tax Bulletin "Coloured Fuel" (https://www.fin.gov.on.ca/en/bulletins/ft/1_2001.html) and consolidated guidance at https://www.ontario.ca/document/fuel-tax/coloured-fuel.
Coloured fuel is diesel (or similar middle distillate) dyed red at 170–190 ppm by a registered dyer in accordance with the Act and Reg. 464. Per the Ministry: "Coloured fuel may be used for any reason other than to generate power in a licensed motor vehicle or when a motor vehicle or vessel … is operated principally for pleasure or recreation." Permitted uses include home heating, lighting, cooking, and powering unlicensed off-road construction or farm equipment.
Two narrow exceptions: (a) First Nations individuals registered under the Indian Act (Canada) and First Nations bands may use coloured fuel in licensed vehicles where the fuel is acquired on a reserve; and (b) railway operators registered with the Ministry of Finance may use coloured or clear fuel in locomotives at a 4.5 ¢/L tax rate. A "practice of the ministry" also permits coloured fuel "for any purpose in remote Northern locations" (north of the 51st parallel, with specified highway-radius exclusions).
Fuel Tax Act s. 2(7.1): "No person shall place or cause to be placed any unauthorized fuel in a fuel tank of a motor vehicle to which a number plate is attached as required under the Highway Traffic Act." The prohibition applies even when the vehicle is operated primarily for farming, construction, forestry, or mining. See op-farm-plated-coloured-fuel-rule for the farm-plated truck application.
Per Ministry guidance, "Receipts and other records must be kept for 7 years." Bulk purchases must show product, quantity, price, date, vendor identity, the purchaser's name and address, and the amount of Ontario fuel tax paid. The burden of proof on a tax assessment is on the purchaser.
Per Ministry Tax Bulletin "Coloured Fuel" and the Provincial Offences Act set-fine schedule, plus Act ss. 3.9(2) and 4.19(1):
| Offence | Authority | Amount |
|---|---|---|
| First-offence improper use of coloured fuel (set fine, POA Certificate of Offence) | POA Set Fines schedule; Fuel Tax Act regulatory offence | $440 |
| Refusal to permit inspection | Fuel Tax Act | up to $1,000 per refusal |
| Tampering with coloured fuel, or seals/labels; selling coloured fuel as clear; unauthorized colouring | Fuel Tax Act s. 4.19(1) and adjacent | up to $1,000,000 and/or 2 years imprisonment |
| Sale of fuel as coloured when not properly dyed (collector/distributor/dyer) | Fuel Tax Act s. 3.9(2) | not less than $200, not more than $10,000, plus 3× the tax that would be payable if sold as clear |
| Subsequent penalty for improper use | Fuel Tax Act, per "Coloured Fuel" bulletin | 10× the tax that would be payable if the fuel were clear |
| Assessed penalty for improper use or tampering (administrative, on audit) | Fuel Tax Act | up to 13× the tax |
| Plate / driver-licence suspension under the Fuel Tax Act | no Fuel Tax Act authority | see reg-fuel-tax-act-ontario; suspension can arise indirectly through POA s. 69 / HTA default-fine pathway only |
Payment of any fine or penalty does not extinguish the underlying tax liability.
Confidence: verified (primary source confirmed 2026-05-13).
Eligible uses (Ontario): non-licensed (no plate) farm equipment, unlicensed construction equipment, stationary engines, marine commercial use (not pleasure), reefer/auxiliary equipment from a separate non-vehicle tank, home heating.
Prohibited: any motor vehicle licensed under the Highway Traffic Act, even if used "primarily for farming or construction." Pleasure boats are also prohibited.
Penalties: First-offence fine $440. Up to $1,000,000 fine and/or 2 years imprisonment for tampering. Penalty assessment can be up to 13× the tax.
Records: Bulk fuel receipts (product, volume, price, purchaser name/address, fuel tax paid) must be kept 7 years. Roadside inspections by Ministry of Finance inspectors are authorized.
Reefer rule: Dyed diesel allowed in a reefer unit IF the reefer has its own separate fuel tank not connected to the truck's drive engine.