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.

Taxation

[François-Philippe Champagne, Liberal, Minister of Finance and National Revenue]

Mr. Speaker, I want to thank my colleague for his question. I have been watching him for years. Why does he not do something for once? Instead of asking a question, he could convince his colleagues to vote in favour of Bill C‑38. The best way to provide immediate relief is to extend the suspension.

The Conservatives have a chance to do something to help people for once. They can vote in favour of Bill C‑38. Will they do that?

[Joanne Thompson, Liberal, Minister of Fisheries]

Mr. Speaker, off the top I will say to the member to support Bill C-38. I will remind her that I speak with residents in her riding and across Newfoundland and Labrador on a regular basis, and they support the $1 million for small craft harbours. They support the $81 million for wild Atlantic salmon, which is going to see real benefits in our province. They support Churchill Falls and what it is going to mean for our economy. They support 5 Wing Goose Bay and the millions of dollars that are going to move into that community and the province.

These are tangible results. She needs to speak to more of her residents.

[Joanne Thompson, Liberal, St. John's East, NL]

Mr. Speaker, if the member opposite wants to do something tangible for the residents of her riding, the first thing she can do is speak to them about how important it was to receive the food and essentials benefit yesterday. Second to that, she could support Bill C-38, which will see the extension of the excise tax relief on diesel. These are tangible benefits for Canadians, not rhetoric.

[Tim Hodgson, Liberal, Minister of Energy and Natural Resources]

Mr. Speaker, this is how the member opposite can help his concerned member: vote for Bill C-38 and extend the exemption on the diesel tax. Why do they not do something that will actually make a difference?

Opposition Motion—Diesel Prices

[Marilyn Gladu, Liberal, Sarnia—Lambton—Bkejwanong, ON]

Mr. Speaker, I want to thank the parliamentary secretary to the government House leader for his passion for Canadian farmers and Canadian agriculture, and then I want to add to that.

He has reiterated that our government is clearly willing to bring affordability measures to help Canadians at this crisis time. Twice, we have exempted the fuel tax, with Bill C-30 and Bill C-38. However, let us not forget that some of those fuel taxes actually go back to municipalities to help with critical infrastructure.

We cannot predict what the situation is going to be in the Strait of Hormuz and whether that is going to be resolved soon. It would be irresponsible to extend past the time frame that we can predict, what the revenues would be and what the benefits for Canadians would be. Would the member agree?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it was our current Prime Minister who actually got rid of it.

The member opposite wants to challenge me and ask whose idea it was. Let me tell him something. At one time, the Conservatives were against it. They then became in favour of it and then they were against it. That is the Conservatives' track record on it.

The current Liberal leader, today's Prime Minister, who was elected in the last federal election, made a commitment to Canadians on the issue of affordability and he is delivering on the issue of affordability in many different ways. He is not just dealing with the tax on gas, whether it is the carbon tax or the levy that has been applied.

We constantly hear from members opposite, and even from my colleagues, about the importance of affordability. It has not stopped there. When we talk about affordability, this is affordability that benefits farmers. The tax break that was given, shifting from 15% to 14%, helped 22 million Canadians. To my Conservative friends, many of those people are farmers.

Understanding that there are ways in which we can directly help Canadians with the price of food, we not only converted the GST rebate but, significantly, put up front literally hundreds of millions of dollars and converted it into the Canada groceries and essentials benefit. Again, we are dealing with the issue of affordability. Once again, our farmers will benefit from that program.

I put it in that form because I want members to recognize that one does not have to be in the opposition to value and appreciate what our farmers do for our nation. They are the ones who provide the food on our table.

I have travelled on the highway in the Prairies, where we see four, five and more combines forming a row and harvesting wheat from the fields. It is an impressive sight. In the province of Manitoba, when I think of farmers and producers, it goes beyond just the crops. I have talked about how important the pork industry is to my home province of Manitoba, from those who process it to those who have the barns and get the pork ready to be put in places like HyLife, Maple Leaf Foods and Winkler Meats. These are important people who play a critical role in food security.

Food security is important to every member of the government caucus. For this reason, we often talk about why it is so important to support expanding the year-round production of things like vegetables and fruits so that we are less dependent on countries like the United States in dealing with food security. These are some of the measures the government has put in place to support our farmers and Canadians as a whole.

Today, we have the Conservatives saying, “Here is our idea”, because they want to one-up, in the best way they can, what the current government is proposing, even though when they had a chance to do things like this when they were in government, they did not. Now they are in opposition and they see a government actually taking some of these initiatives, they want to say they can one-up them.

No one can accurately predict what the price of fuel is going to be six months from now. We might like to think we can. This is a measure that was put in place on April 20, I believe, as part of the spring budget update. It was meant to provide temporary support, with a suspension until the Labour Day weekend. That was in Bill C-30, if members want to look it up. We are grateful that the Conservatives supported that legislation. That was great.

Over the summer, going into August, a decision was made that we needed to be able to extend that tax break, which is somewhat similar to what the Province of Manitoba did when it brought in its initial price reduction on gasoline. That is exactly what Bill C-38 would do. It would allow for that extension, which incorporates diesel and gasoline. I can say it makes a very tangible difference for consumers.

I am very much aware of the Bloc's concern with respect to the issue. How can we ensure that the tax break, whether it is given by the Province of Manitoba or the federal government, is being passed on to consumers? I believe we have some of the best civil servants and independent officers of Parliament, along with different stakeholders, who can ensure that those oil companies have a sense of accountability so that, in fact, that tax break goes directly into the pockets of the consumer. That is something we take very seriously. It is the reason why we are doing it in the first place.

This is a government that is not only focused on short-term relief. It is trying to resolve the problem and secure our future so that Canada can be more independent in issues of this nature. It is the reason why we had the Pacific link announcement. It is the reason why we had the LNG Canada phase two announcement. These are multi-billion-dollar announcements that are going to increase Canada's capacity.

The leader of the Green Party talked about refineries. If we want more refineries in Canada, we have to continue to do what the government is doing, which is working collaboratively with other jurisdictions. We have to create the climate that will allow for the expansion of our refineries. I think we have 16 now. Maybe it is 17. I am not 100% sure. I know Manitoba is one of the only provinces that does not have one. I would like to see private businesses, private enterprises and the provincial governments, in particular, working with the federal government on ways we can do that. This government, headed by this Prime Minister, has made it very clear that we are a government that will work collaboratively with other jurisdictions, the private sector and, in particular, investors to build a stronger and healthier Canada for all and an economy that is there for all Canadians. That is what we are all about.

[Marilyn Gladu, Liberal, Sarnia—Lambton—Bkejwanong, ON]

Mr. Speaker, of course, our government is committed to reducing taxes for Canadians. We brought forward Bill C-38 to take the tax off all fuel. I think, and hope, the member opposite would agree that it is very difficult to predict the situation globally in terms of the Strait of Hormuz and the various wars that are coming.

Would he not agree that the prudent thing is to continue to monitor the situation and introduce responsive affordability measures as we know more about the global situation?

[Jean-Yves Duclos, Liberal, Québec Centre, QC]

Mr. Speaker, I will be sharing my time with the member for Prince George—Peace River—Northern Rockies.

I am fortunate to rise today to speak to an important concern for the good and well-being of my constituents. I am obviously talking about the high cost of living.

However, before I do that, I would like to highlight the election of three important MLAs who will play a major role for my constituents in the coming years: Patrick Paquet, Étienne Grandmont and Julie White. These are three members from different provincial parties with whom I very much look forward to working to invest in our community and support middle-class families and those who need it most.

I would also like to express my great esteem for two members who have left office, either because they retired from politics or because they were defeated last night: Mario Asselin and Pascal Paradis. Mr. Asselin and Mr. Paradis did a tremendous amount of work for the well-being of their constituents, and I wanted to acknowledge that. Of course, I would also like to acknowledge the work of the volunteers on all the election campaign teams and mention how much is going to change for the riding teams of former members of Parliament. I wish those members and all the teams that supported them all the best, good health, happiness and success in the future.

Let us come back to the cost of living. We recognize that many Canadians, including many in my riding, are struggling to make ends meet. Many are struggling to pay for groceries, gas, rent, which is also very expensive, and other expenses. We also understand that the very high price of diesel is causing problems for many Quebeckers and Canadians. This is something that is happening around the world, and we need to understand, as everyone does already, that many factors are beyond the control of Canada and the Canadian government. That said, I want to point out that diesel prices here in Canada remain lower than in most of the other G7 countries.

The cost of living remains a significant concern for the Government of Canada. We have already introduced many measures to help Canadians in these hard times, and we will continue to do so. For example, we cut taxes for 22 million middle-class Canadians, and we eliminated the federal consumer carbon tax. The Government of Canada also removed or reduced the GST on eligible new homes for first-time home buyers. Just a few months ago, we introduced the Canada groceries and essentials benefit to provide direct support to households that need it most. I will come back to that in a moment.

We also introduced Bill C-38, the Canadian fuel affordability act, to help with the cost of living. Bill C-38 will extend the temporary suspension of the federal fuel excise tax until January 31, 2027. In practical terms, that means that Canadians will continue to save about $5 every time they fill up their gas tank.

As members have surely noticed, when this measure was implemented in April, it had an immediate effect. The price at the pump immediately dropped by an average of approximately 11¢ a litre across Canada. By extending this rebate through to January, we will be able to continue to support Canadians and businesses that are suffering because of high fuel prices in general. The excise tax will be gradually reinstated. Following the current temporary suspension, the excise tax will be applied at only 50% of the regular rate for two months, which means savings of approximately five cents a litre on gas and two cents a litre on diesel in February and March 2027.

The motion we are debating today focuses mainly on energy prices, but we obviously need to analyze all of this in a broader context, namely, affordability for Canadians. We have already introduced many measures to help Canadians make ends meet. A good example, as mentioned earlier, is the new Canada groceries and essentials benefit. It is a significantly enhanced version of what was previously known as the GST credit.

The big difference is that, with this enhancement, Canadians will receive 25% more money this year and over the next four years of benefits. These tax-free payments are helping more than 12 million low- and modest-income Canadians, including tens of thousands of people in my own riding. If we look at the one-time top-up to the benefit that was paid this summer, a family of four will receive up to $1,900 this year and about $1,400 in each of the next four years. Eligible Canadian families received a payment just yesterday, on October 5, and the next payment will be made in three months.

I will end with a very quick summary of four very significant affordability measures for people in my riding.

First, there is the Canada child benefit, which reduces poverty by 50%, especially in neighbourhoods in my riding where families are struggling to make ends meet. Nine out of 10 families receive this benefit.

Second, there is the Canadian dental care plan, where 88% of participants, including tens of thousands of people in my riding, say they are very satisfied. Six million people are enrolled in the Canadian dental care plan, including a very large number in Quebec. It also reduces pressure on Quebec's health care system, which really needs it, and it improves not only oral health, but overall health. Third, there is Canada's national school food program, which helps 100,000 children in Quebec alone go to school on a full stomach. Le Pignon Bleu, in my riding, is doing incredible work partnering with this important program. It is not just any food; it is healthy, locally produced and consumed, and contributes to children's overall development. Fourth is the national child care program. Some 900,000 children in Canada benefit from it. Eight provinces have reduced child care costs to $10 a day across the country, and the remaining provinces and territories have reduced child care costs by more than 50%. In Quebec, that amounts to $2 billion in federal transfers to the provincial government, which is equivalent to funding 150,000 child care spaces in Quebec alone.

In closing, I know that there is still much work to be done, but we will always be there to help Canadians, particularly those who need it most.

[David Bexte, Conservative, Bow River, AB]

Mr. Speaker, I thank my colleague, the member for Long Range Mountains, for sharing her time with me. I truly appreciated the words she had to share with the House. They were fantastic.

It is always an honour to rise on behalf of the people of Bow River. During the debate on Bill C-38, I invited the Prime Minister to Bow River. I asked him to stand in a field in southern Alberta at 10 o'clock at night, beside a farmer and his son facing the rain. That invitation still stands, even though the harvest is wrapping up in southern Alberta. It is probably the most expensive harvest these farmers have faced in their entire lifetime.

At this time of year, the work on our farms does not end when the sun goes down. The crop still has to come off, trucks still have to run and the livestock still has to be fed. The harvest is when a family finds out what a year of work will bring. The seed has been paid for, the fertilizer has gone on the ground and the machinery payments keep coming, and now the family has to bring the crop home. They cannot leave the crop standing until diesel gets cheaper. They cannot ask the weather to wait while Ottawa makes up its mind. It is the harvest.

A modern combine burns 60 to 80 litres of diesel an hour. Harvest days run 12 hours or more. That is 800 litres a day for one machine on one farm in one day. Diesel in this country now averages about $2.60 a litre, and it has hit record highs for weeks. It should not cost this much to fuel the country with the fourth-largest oil reserves on earth. Canada should have the most affordable diesel in the world. The government will point overseas, at the geopolitical and the Strait of Hormuz. Oh my. Wars and global turmoil affect fuel prices everywhere, but they do not explain the extra costs Canadians have to bear.

Canadian diesel is now 24¢ a litre more than the American average and 31¢ a litre more than the global average. A wheat farmer in Montana, just a short drive south of Taber, Alberta, sells into the same world market as my neighbours, but an Alberta farmer is paying 24¢ a litre more for diesel. Before any seed is in the ground, our farmers are already starting the season at a competitive disadvantage. Canadian farmers are paying more for fuel than their competitors in the United States and other markets for three main reasons. These are high taxes, a weak Canadian dollar and an overreliance on American refineries. That is why I support this motion and our emergency fuel relief action plan.

At the end of September, the national diesel price was around $2.60 a litre. For a farmer, this is a bill that grows with every hour the combine runs. The Grain Growers of Canada has put that cost into terms this House should understand. One large combine burning 70 litres an hour and working eight hours a day for 30 days, with bulk diesel rising from $1.10 to $2 a litre, has added to the harvest a bill of more than $15,000. This is the increase for one machine. It is not the increase for the tractor pulling the grain cart, it is not for the trucks hauling to the elevator and it is not for the truck delivering fuel.

That money could pay down the operating loan. It could replace worn tires. It could help carry the farm through the winter. Instead, it goes into the fuel tank. From the fuel tank, it goes into government coffers. A farmer can work longer hours, but a farmer cannot bargain with an empty tank.

This motion is not just for our farmers. It is for every Canadian family that sits down at the dinner table each night. Think about a loaf of bread. Before it reaches the shelf, someone has to grow the wheat, someone has to harvest it, someone has to haul it to be milled, the flour must reach the bakery and the bread must reach the store. Each of those trips requires fuel. The same is true of potatoes, corn, vegetables, meat and the feed that keeps livestock growing. Every step carries tax. The last stop is the family at the till. By the time that food reaches the checkout, the family buying it is paying the compounded cost of every tax along the way.

The government cannot claim to care about food affordability and grocery prices by sending Canadians a few hundred dollars each year and ignoring what is driving those prices higher. It is the fuel for the farmers, truckers and businesses that produce and deliver our food. Parents feel it every week. They put groceries back at the till. They buy less meat. They skip fresh fruit.

The Conservatives are not asking for anything complicated. Our emergency fuel relief plan has two parts.

The first part would save Canadians money today. We would take every federal tax off diesel sales until at least Canada Day. That means extending the full excise tax cut until July 1, 2027, and taking off the GST.

The government announced plans to keep the excise tax off only until January 31, 2027, and half the tax would return in February. The full tax would return on April 1, April Fool's Day, just as farmers are preparing for another growing season. Why bring the tax back just as the seeding bills start to arrive? It only goes to show that the government does not keep farmers in mind when it drafts policy and, by extension, it does not keep Canadians in mind.

Farmers plan their year in the winter. They sit down with their families and then with their bank and work through the numbers before a single seed goes into the ground. They need to know what fuel will cost, because uncertainty at the pump becomes uncertainty on the entire farm.

We would also take the tax out of making diesel, permanently scrap the federal industrial carbon tax and permanently scrap the clean fuel regulations. According to Environment and Climate Change Canada's projections, and as reported by the Parliamentary Budget Officer, the clean fuel regulations are projected to add up to 16¢ per litre to diesel and 17¢ per litre to gasoline by 2030. That is not small. Natural Resources Canada's agriculture sector energy use analysis indicates that 2023 fuel use on Canadian farms was roughly 3.8 billion litres of diesel and 1.5 billion litres of gasoline. That consumption would mean $613 million in additional diesel costs and another $254 million in gasoline costs for the agriculture sector alone. Altogether, that is nearly $870 million added in annual fuel costs. These are costs that farmers cannot simply absorb and that ultimately work their way through the entire food supply chain. That alone more than wipes out the $600-million benefit seen by increased canola sales.

The second part of our motion today is about fuelling our country at home. Canadian workers should be turning Canadian oil into Canadian fuel. Instead, we rely too much on American refineries. We pay for that diesel in American dollars, and with a low Canadian dollar, every one of those litres costs more. We need to create shovel-ready zones and prepermit land for refineries, pipelines, rail and storage. A company that follows every safety and environmental rule should know it can build before even applying. We should let companies deduct 100% of their investment in the first year in new refineries, refinery expansions, pipelines, rail, diesel and crude storage and the equipment to run the oil through those plants.

The Conservatives call on the government to build a strategic reserve for refined fuel. Today, Canada keeps no national emergency reserve. That is a problem, especially in a global crisis. The goal is clear. Boost Canadian diesel production to one million barrels a day, give every Canadian business and every Canadian family access to affordable Canadian diesel and close the price gap with the United States within five years.

This comes back to two kitchen tables. At one table, a farm family is working through the bills. The farmers have had a long day in the field and the numbers are bigger than they have ever been before. At the other table, a family is working through a grocery receipt. That family is deciding what needs to be left off next week's list because the bills are higher than they have ever been before. The families might live hundreds of kilometres apart, but the relationship between the two cannot be ignored. The cost of fuel hits both of them. We should not ask either family to accept another speech about affordability without action to follow it. The Liberal government's actions have fallen short. They have made matters worse for Canadian families.

Today, members have a choice. They can call on the government to extend tax relief. They can support making fuel easier to produce, store and move. They can stand with the people who grow our food and the people trying to afford it. The crop will not wait and the bills will not wait, and neither should this House.

I urge all members to support this motion.

[Marilyn Gladu, Liberal, Sarnia—Lambton—Bkejwanong, ON]

Mr. Speaker, I would like to thank the member opposite for her advocacy for the citizens of Long Range Mountains.

As she may know, I worked in the refining business for decades. Although there have been some supply chain increases, on the whole, the price of fuel is, as she said, greatly impacted by global situations, which we do not have a lot of control over and are sometimes hard to predict. Our government has introduced measures recognizing the affordability issues that Canadians are facing, and Bill C-38 would take the tax off fuels until next year. Can the member comment on whether the Conservatives will support these measures?

Finance

[Karina Gould, Liberal, Burlington, ON]

Mr. Speaker, I have the honour to present, in both official languages, the fifth report of the Standing Committee on Finance in relation to Bill C-38, an act to amend the Excise Tax Act on the extension of the federal fuel excise tax relief.

The committee has studied the bill and has decided to report the bill back to the House without amendment.

Taxation

[Pauline Rochefort, Liberal, Parliamentary Secretary to the Secretary of State (Rural Development)]

Mr. Speaker, I would like to take this opportunity to wish my colleague a happy Franco-Ontarian Day. In answer to his question, I would also like to make two points.

This week, our government introduced two very important bills that go hand in hand. We introduced Bill C-38, which comprehensively addresses affordability issues, and I could name others, considering the numerous initiatives introduced over the past few months. We also introduced Bill C-39, which is going to create good jobs and strengthen our economy. That is what Canadians in our ridings want.

The Economy

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Mr. Speaker, I appreciate some of the member's responses. He and I will debate another day how many times he voted in favour of the consumer carbon tax and how he was one of the main cheerleaders for the consumer carbon tax until he found it not to be beneficial to his election options. He realized that it was very unpopular, so then instead of being for it, he was against it.

I also agree with the cutting of the gas tax. We talked about that for years and years, but last session, the member voted four or five times against cutting the gas tax, when the Conservatives brought a motion forward that resembles Bill C-38, which the Liberals just brought forward, so he also voted against that not so long ago.

The member is the Parliamentary Secretary to the Minister of Finance. I do like to have this debate back and forth because he did talk about a whole suite of programs. How much would it cost the Liberals to cut taxes so people had more money in their pockets and not have some of those programs?

Business of the House

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, the long summertime drought of Thursday questions finally comes to an end. I know much relief is felt not just in the parliamentary precinct but across the land.

I would like to take this opportunity to welcome the government House leader back after what I am sure was a very busy summer for us all as we were out in our constituencies meeting with Canadians, hearing directly about their concerns and now bringing their issues back here to Parliament.

I would like to ask the government House leader if during his travels this summer, he heard from Canadians who want to move past the rhetoric to results and who want the government to actually save them money. We know the government has conceded that gas taxes take a big bite out of the economy and hurt affordability.

In order to save Canadians money, will he finally agree to the Conservative plan and not just have a temporary reprieve of the gas tax until January, as we saw with Bill C-38? Are there any plans for the government to make that last longer, all the way to Canada Day? Now that the government has conceded the principle that gas taxes hurt the economy, will it abandon the fuel standard tax and bring in legislation to repeal it?

Finally, after all the photo ops, rhetoric and bluster, will there be a single new project that has gone through the Major Projects Office or benefited from the unprecedented powers of Bill C-5? Will we finally get to see things built, or was this summer of press conferences and MOUs just a bunch of political theatre?

Taxation

[François-Philippe Champagne, Liberal, Minister of Finance and National Revenue]

Mr. Speaker, the Conservatives are still enthusiastic about Bill C-38, which is a good thing, because in fact, farmers know that we stand with them. The government, under the Prime Minister, has suspended the fuel excise tax, which will reduce the tax on diesel. These are facts. This is not a parallel reality. This is going to help our farmers. This is going to help logistics across the country. This is going to reduce the pressure on food prices across the nation.

I am happy to see the Conservatives so enthusiastic to support Bill C-38.