Bill C-38

Canadian Fuel Affordability Act

An Act to amend the Excise Tax Act (extension of the federal fuel excise tax relief)

This enactment amends the Excise Tax Act to extend the temporary suspension of the federal fuel excise tax until January 31, 2027 and to temporarily set the excise tax rates on fuels to 50% of the regular rates for the period beginning on February 1, 2027 and ending on March 31, 2027.

Canadian Fuel Affordability Act

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the member has been interesting. What the Government of Canada has done is taken more of a holistic approach in dealing with affordability, because it is not new. It is something the Prime Minister has made a commitment to since the last federal election, and even prior to that. He has been Prime Minister for 18 months, and there have been a number of different measures. We can talk about getting rid of the carbon tax. We can talk about the income tax break for over 20 million Canadians. Today it is the excise tax on gas, which is important legislation. I am glad the Conservatives are going to support it.

What about other initiatives that are also helping out with the issue of affordability, such as the dental program, the pharmacare program and the national food program in our schools? Does the member support the whole package?

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Mr. Speaker, as I said in my speech, Conservatives welcome anything that saves Canadians money.

However, when the measure is a half-measure, not a full-fledged plan, then we must ask the government to do what is needed so that Canadians can keep more in their pockets and have an affordable life. The government is proposing to cut these taxes only until April. We are asking for relief to be given until Canada Day 2027, and to also get rid of the fuel standard tax as well as the industrial carbon tax, which are driving up the cost of fuel and which drive up the cost of everyday living.

[William Stevenson, Conservative, Yellowhead, AB]

Mr. Speaker, could my hon. colleague comment on whether he thinks that if we actually followed the Conservative plan and reduced all of the taxes it would actually benefit the citizens of Canada far more than the 25¢ a litre, so they could afford to get out, go to work and buy their groceries? Does the member think that would be better for the overall economy than this half-measure that the government is proposing?

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Mr. Speaker, my learned friend was a CPA by profession in his past life, and I believe no one knows numbers better than he does. I totally agree with him that the policies that the government has at least agreed to adopt are not going to help as it intends them to, or they are only going to help for a bit.

We are saying the government should get rid of these taxes, those that do not make sense and those that make life unaffordable for Canadians. I agree with what my friend has said, word for word, in his analogy.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member did not answer the aspect of the question dealing with affordability by providing supports. Let me give a specific example about a senior on a fixed income, collecting $20,000 a year. The government has a program for dental services for that particular senior, and that makes the dental services more affordable for the senior. Does the member support that aspect of governance? Does he believe the government has a role in programs of that nature with respect to affordability?

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Mr. Speaker, going back to the root cause, it is good that the government is providing those reliefs, but who is going to look after the real cost of those reliefs? Why do we not get rid of the anti-energy laws that are making life unaffordable? It is like the government is creating a problem and then providing a solution for it. We do not believe in putting bandages on wounds. We believe in providing real medicine, and in this context, the real medicine is to get rid of the taxes on fuel that are driving up costs, be it the standard fuel tax or the anti-energy laws.

[Jacques Ramsay, Liberal, Parliamentary Secretary to the Minister of Public Safety]

Mr. Speaker, I am very pleased to speak to the debate on the Canadian fuel affordability act. This measure is truly helping the people of my riding, La Prairie—Atateken, who sometimes have to travel long distances to get to work or as part of their job.

Our government is well aware of the pressures associated with the cost of living in Canada, specifically the rising cost of fuel as the world faces serious geopolitical tensions. Across the country, we have seen gas prices skyrocket. This is causing difficulties for many Canadians, so much so that filling up at the gas station has become a source of anxiety for many people.

Our government understands this situation well. That is why we have decided to extend a concrete measure that gives consumers a break. One day, all Canadians will have electric vehicles and will no longer be at the mercy of international events, such as closures of the Strait of Hormuz. However, that day has yet to arrive. That is why the Prime Minister announced in April that the government would suspend the federal excise tax on gasoline and diesel until Labour Day, September 7. Still, our approach has always been flexible. It became clear over the summer that geopolitical tensions were still elevated, which was keeping prices at the pump high. That is why the Minister of Finance announced this month that the full suspension would be extended until January 31, 2027, followed by a 50% reduction until March.

In my opinion, this decision demonstrates that our government is truly listening to Canadians, studying the facts and developing tangible measures to support Canadian families and businesses. With this announcement, we are suspending the federal excise tax of 10¢ per litre of gasoline and four cents per litre of diesel. We estimate that this suspension of the excise tax is saving Canadian consumers about $5.75 on filling a 50-litre tank using regular gasoline. This suspension comes on the heels of the cancellation of the federal consumer fuel charge that was enacted on April 1, 2025, which was already delivering direct savings to Canadians at the pump. That measure helped reduce overall inflation and lower costs for all Canadians. The suspension of the federal excise tax is a step in the same direction.

This is just one way our government is working to make life more affordable for all Canadians.

I want to mention the tax cut to lower the tax burden on Canadians, which came into effect on July 1, 2025. Canadians are paying less tax because our government lowered the first marginal personal income tax rate from 15% to 14%. Thanks to this change, 22 million Canadians now benefit from tax relief of up to $840 per year for a two-income family.

The government also cut the GST for first-time homebuyers of new homes valued up to $1 million and reduced it for new homes valued between $1 million and $1.5 million. This represents savings of up to $50,000.

Furthermore, we are helping 12 million low- and moderate-income Canadians pay for essential goods with the new Canada groceries and essentials benefit. Since the spring, we have been making regular, increased payments to the families and individuals who are eligible for this benefit. The amount has been increased by 25% for five years, starting in July 2026. These payments, made at the start of each quarter, will provide quick access to funds to help families cover their day-to-day expenses. In total, these measures mean that a family of four will receive up to $1,890 this year thanks to the new Canada groceries and essentials benefit. They will then receive $1,400 per year for the next four years. A single person, meanwhile, will receive $950 this year and $700 a year after that.

Our government also made the national school food program permanent. I am especially proud of this measure, which provides school meals to nearly 400,000 children every year, saving participating families with two children in school roughly $800 a year in grocery bills. Another equally fundamental but less publicized measure is our roll-out of automatic federal benefits. By the 2028 tax year, 5.5 million low-income Canadians will automatically get the benefits they are entitled to, including the Canada groceries and essentials benefit and the Canada child benefit. Automatic income tax filing for these Canadians ensures that they receive the benefits they are eligible for without having to apply.

Finally, I will close by also mentioning the ambitious measures we have implemented to foster competition in the telecommunications and financial services sectors in order to lower prices, allowing Canadians to change providers more easily and pay less in banking and service fees. At a time when disruptions in global supply chains and geopolitical tensions are pushing prices up, our government is taking action. Our government wants to build a stronger economy to create more job opportunities and higher wages. Simultaneously, we will lower costs to make life more affordable across the country. That's how we can ensure more certainty, security and prosperity for more Canadians, now and in the future. I hope this bill will provide Canadian consumers with some much-needed relief when it comes to gasoline and diesel.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Mr. Speaker, I would like my colleague to please emphasize the importance of lowering costs on Canadians. Could he actually lay out all of the measures taking place right now, as well as answer why they are not implementing the entire plan and eliminating all the federal tax on gas?

[Jacques Ramsay, Liberal, La Prairie—Atateken, QC]

Mr. Speaker, it is important to understand the timing of the tax suspension. Our Conservative friends will tell us they have been advocating for this measure for years. However, a measure is only effective when it is implemented at the right time. Right now, we are experiencing geopolitical tensions due to the war in Ukraine and especially to the war in Iran and the closure of the Strait of Hormuz. A measure is only effective when it is implemented for a specific reason, and we will be able to cancel it once this risk disappears, which I hope will be as soon as possible.

[Mario Simard, Bloc, Jonquière, QC]

Mr. Speaker, I understand that there is a right time for implementing such a measure, but we also need indicators to prove that it will have the desired effect on the most vulnerable. That part is a bit more difficult.

We are in favour of helping people who are struggling to afford housing, clothing and food in these difficult times. Gas is an essential consumer good. However, it is still important to make sure that this measure will not help the greedy oil and gas companies rack up even bigger profits. There is already a dedicated policy of giving those companies billions of dollars in support. I, for one, think that the government could make an effort to support seniors as well and increase old age security by ending its support for oil and gas companies. Perhaps my colleague is in favour of that.

[Jacques Ramsay, Liberal, La Prairie—Atateken, QC]

Mr. Speaker, my colleague is glossing over the fact that this measure is temporary, whereas he is proposing a measure that will be permanent and may not be appropriate. That said, his concerns are valid. I think we do need to monitor the situation. I have no indications and have not heard anything to suggest that the tax suspension has benefited the oil companies. Obviously, the cost of gas has continued to rise, but I think that can mostly be attributed to the closure of the Strait of Hormuz. I think that, without the tax suspension, the price at the pumps would be even higher today, probably above $2 per litre.

[Louis Villeneuve, Liberal, Brome—Missisquoi, QC]

Mr. Speaker, as a family doctor, my colleague treated thousands of patients during his career. I would like to know why affordability is so important to him.

[Jacques Ramsay, Liberal, La Prairie—Atateken, QC]

Mr. Speaker, I thank my colleague from Brome—Missisquoi for that excellent question.

As we know, affordability means economic security, income, employment, food security, and healthy food to eat. These are all key determinants of health that enable Canadians to be productive and enjoy life. This is what I saw every day in my office. Our job is not just to heal all ills. We must also advocate for quality of life, and that starts by looking at the key determinants of health, economic security being probably the most fundamental one.

I am very pleased to say that my government is constantly thinking about this issue.

[Amarjeet Gill, Conservative, Brampton West, ON]

Mr. Speaker, today I rise to speak, on behalf of the great people of Brampton West, to Bill C-38, an act to amend the Excise Tax Act, also known as the Canadian fuel affordability act, and the impact of high prices on Canadian businesses and families.

After visiting and talking to the residents of Brampton West this summer, I can say that this is an incredibly important issue affecting Canadians. For months, Conservatives have delivered a simple message: Stop raising costs, cut taxes, lower the cost of fuel and let Canadians keep more of the money they earn. Now, after months of Conservative pressure, the government would be extending the fuel tax relief. That is good news for Canadians, but let us be clear. This would not be permanent tax relief. It would be a temporary extension. The tax is still scheduled to come back, and Canadians deserve better than a temporary break from high prices.

Conservatives have been fighting for lower fuel taxes because we understand something the government has been slow to recognize: Fuel taxes do not stop at the gas pump. They travel through the entire economy. When it costs more for fuel, it costs more to produce our food, build our homes and supply our businesses, and eventually we all end up paying higher prices.

The government itself now acknowledges that the fuel tax relief benefits truckers. It also benefits agriculture, construction and housing. Conservatives agree. In fact, we have been making the argument for years. That is why we fought against higher fuel prices. That is why we demanded relief. That is why the government should go further. If lower fuel taxes help Canadians today, why bring those back tomorrow? That is the question the government needs to answer.

Under the current plan, the regular federal excise tax is 10¢ per litre on gasoline and four cents per litre on diesel. The suspension would be extended through January. Then the tax would come back again at half the regular rate in February and March, and the full rate is scheduled to return in April 2027. Let us think about that. Canadians would get relief today, but the government has scheduled the tax to come back. That is not a long-term affordability plan. Conservatives believe that Canadians need long-lasting relief because the affordability crisis will not disappear in February. The grocery bills and mortgage payments will not disappear in February. The family that needs its vehicle to get to work will need gasoline in February and beyond. Why should the tax break disappear?

I represent the wonderful riding of Brampton West. This issue is very real for the people I represent. Brampton is a working city. It is a trucking, manufacturing and small business city. Every morning, people get up early, get into their car or truck and go to work. They are not driving because it is a luxury. They are driving because they have a business to run, a construction site to reach or children to take to school. These Canadians work hard. Increasingly, they feel like the government is taking more, while their paycheques buy less. They see it at the grocery store, in their housing costs and every time they fill their tank. That is why Conservatives have been demanding affordability measures that put money in people's pockets.

Canadians do not need more bureaucracy or another complicated program. Canada is competing for jobs. We are competing for investments. We are competing for manufacturing. Communities such as Brampton know what happens when those jobs leave. Recently, Brampton has experienced the devastating uncertainty surrounding the Stellantis assembly plant. Thousands of workers and their families have been affected. Those workers do not need more speeches about competitiveness. They need Canada to become competitive, affordable, and a land of opportunity. That means lowering the cost of doing business, and it means encouraging businesses to hire here.

Conservatives believe Canada should compete by making our economy stronger with lower taxes, faster approvals, more investments, more productions and more Canadian jobs. We should make Canada the best place in the world to invest, build and hire, because every investment represents something more important than a government announcement. It represents a paycheque. It represents a worker. It represents a family. The government estimates that extending the fuel tax suspension would provide billions of dollars in additional relief. That is good, but it raises another question: If keeping that money in the economy helps Canadians now, why should the government be in such a hurry to take it back?

Conservatives believe that the money Canadians earn belongs to Canadians. The government must justify taking it. Families know where their money is needed. Maybe it is a mortgage, groceries, the hydro bill, hockey registration or keeping a small business alive. Canadians do not need government telling them how to spend every additional dollar. Conservatives also understand who ultimately carries the burden when government raises the costs. It is the trucker leaving Brampton before sunrise, the contractor trying to keep a project on budget, the small business owners wondering whether there will be enough left at the end of the month, and the parents sitting at their kitchen table deciding which bills get paid first. Government policy should make their life easier, not harder.

Conservatives will support meaningful tax relief. We will support measures that make life more affordable. However, we will also continue pushing the government to go further, because one temporary tax measure cannot undo years of rising costs. Canada needs an economic plan based on growth that rewards work, investment and entrepreneurship. We need to build homes, infrastructure and energy projects that create jobs, and we need to bring down the cost of doing business. That is how Canada becomes competitive, that is how wages grow, that is how opportunities are created and that is how we give young Canadians the hope that working hard will get them ahead.

Bill C-38 presents the government with an opportunity. It can acknowledge what Conservatives have been saying: Canadians are overtaxed, families need relief, businesses need lower taxes and our economy needs to become more competitive. Therefore, extend the relief, make affordability the priority, keep fuel prices down, lower taxes on work and investment, get Canadian projects built, bring investment back to Canada, protect Canadian manufacturing and create powerful paycheques for Canadian workers.

Conservatives believe in the Canadian worker. We believe in our farmers, our truckers, our tradespeople and our entrepreneurs. We believe that Canadians should be rewarded for working hard, so our message with respect to Bill C-38 is simple: Any relief is welcome, but temporary relief is not enough. Keep taxes down, bring costs down, make Canada competitive, protect Canadians' jobs and let Canadians keep more of what they earn, because Canadians do not need another band-aid solution. They need everlasting affordability. They need good jobs, better opportunity and an economy where hard work pays again.

A government cannot run from a fundamental responsibility to protect and help citizens. Canadians deserve safety, security and affordability. That is what families in Brampton West and across Canada are asking for, and that is what Conservatives will continue fighting for.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I am glad to hear the hon. member recognize the importance of affordability at this particular time with regard to this particular measure, but I would like to know more. How come the member has refused to support so many other affordability measures that have come before Parliament, where he had an opportunity to support them but he chose each time not to?