n. — Agriculture, Western Canada, especially Saskatchewan
low-tax gasoline for farm use that is dyed purple for easy identification.
Type: 1. Origin — Several provincial governments implemented low-tax gasoline programs to support farmers beginning in the 1940s. The gasoline was meant to be used exclusively in tractors and other farm machinery; it was dyed purple to allow for easy identification of misuse, i.e. the power train and motor block of any vehicle using the gas remain purple indefinitely. In recent years, provincial legislators have switched from providing coloured gas to offering tax rebates based on an estimated amount of fuel use (see, e.g., the 2016 quotation).
Similar programs exist internationally, although the use of purple dye is less common than other colours, such as red, which is used in the US for low-tax fuels. Purple gas is most prevalent in Canada (see Chart 1). The term has a higher frequency in the Prairies (see Chart 2), where the agricultural sector is most important.
See also COD-2, s.v. "purple gas", which is marked "Cdn (Prairies)".
Images:

Chart 1: Internet Domain Search, 4 Oct. 2012 
Chart 2: Regional Domain Search, 13 Jun. 2013