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

[Mark Carney, Liberal, Prime Minister]

Mr. Speaker, this House will have an opportunity to pass Bill C-38, which will lower the tax on diesel. This House will have an opportunity to vote on the building Canada strong act, which will move this country forward.

Let me make sure Hansard is correct. The government passed the act last year, and Contrecoeur, the Mackenzie Valley pipeline, Darlington, the north coast transmission line and the Matawinie mine are all major projects now being built thanks to this government.

The Economy

[Madeleine Chenette, Liberal, Parliamentary Secretary to the Minister of Canadian Identity and Culture and Minister responsible for Official Languages and to the Secretary of State (Sport)]

Mr. Speaker, the global economy is undergoing a rupture. Geopolitical threats are mounting, and countries around the world are grappling with severe trade disruptions and significant economic risks. This includes the ongoing conflict in the Middle East, which continues to disrupt global energy supplies, drive up energy prices and increase uncertainty worldwide. Canada, as we all know, is not immune to this turbulence. That is why we tabled Bill C-38 to extend the temporary suspension of the federal fuel excise tax.

As members of the House will remember, last spring our government temporarily reduced federal fuel excise tax rates to zero cents per litre. While that measure was set to expire on Labour Day, Bill C-38 proposes to extend it until January 31, 2027. Fifty per cent of the regular excise tax rate would then apply from February 1 to March 31, 2027. This means that Canadians would continue to benefit from lower taxes, saving 10¢ per litre on gasoline and four cents per litre on diesel, helping households and businesses manage transportation and operating costs.

For many small businesses, transportation and fuel costs remain a significant expense. Extending this relief measure will help businesses manage their costs while continuing to invest and create jobs.

However, supporting Canadians through the current challenges is not just about providing immediate relief. It is also about ensuring that our economy remains strong, competitive and resilient in an uncertain world. While new U.S. tariffs add uncertainty for Canadian businesses and workers, Canada is starting from a position of strength.

With a robust economy and a clear growth strategy focused on driving investment, increasing productivity, strengthening domestic industries and expanding access to global markets, Canada is well placed to respond to external pressures.

Domestic activity has remained strong and our continental supply chains have been more resilient than expected, thanks to the adaptability of Canadian businesses and the fact that CUSMA protections shielded approximately 85% of Canadian merchandise exports from recent U.S. actions.

The business climate in Canada has recovered, and companies are diversifying both their suppliers and their markets. The figures show that Canada has what the world is looking for. Canada leads the G7 in terms of per capita foreign direct investment inflows. Overall, real GDP grew by 1.9% in 2025, despite persistent global uncertainty.

The outlook for the future remains encouraging. A Statistics Canada survey shows that businesses plan to increase their capital expenditures this year, while the International Monetary Fund forecasts that Canada will post the second-fastest growth in the G7 in 2026 and 2027.

Since the start of 2025, Canada has created more than twice as many jobs per capita as the United States, with the majority of these jobs in the private sector. Things have really taken off since the start of 2025. At the same time, inflation averaged 2.1% in 2025, while wages have risen faster than prices over the last five years.

Overall, these results show that the Canadian economy continues to grow, attract investment and create jobs despite a highly uncertain global environment. These results are no accident. They are truly the result of work that enables us to strengthen the economy and prioritize affordability—

[Brad Vis, Conservative, Mission—Matsqui—Abbotsford, BC]

Mr. Speaker, it is a pleasure to rise in the evening.

Before I begin my comments, I will note that we have had a debate throughout the entire day on Bill C-38. Many of the things I want to say that relate to my question from June were said during the debate on Bill C-38 as well. The point I would like to make, and I hope the government side can hear it, is that even though the Prime Minister has commenced a process to erase the legacy of Justin Trudeau, to move away from his most disastrous policies, structural reforms are still needed to ensure that small businesses, the businesses that pay the majority of taxes in Canada, are made whole.

We are going to see that through taxation and regulatory reform on a major scale, but we have not seen that yet. I encourage the government to heed the words that small businesses, the ones with eight to 10 employees, still need market access to the United States. These are 50-year-old relationships that are in jeopardy right now.

Today, business leaders from across western Canada came to Parliament. I will acknowledge that they are happy with Bill C-39, the Liberals' big, beautiful bill. They are happy about the attack the Liberals are going to make on organized labour, even though the Conservatives are still debating it and trying to figure it out. However, they have stressed the need for regulatory reform and measures that are going to help small businesses in western Canada. In Manitoba, for example, 50% of exports go to the United States. It is higher in a lot of other provinces. We have to take that relationship seriously.

In my question back in June, I highlighted that Canada has lost 100,000 entrepreneurs over the last two decades, and there has been a 19% increase in business exits since 2019. That is not acceptable. Right now, we are facing major challenges, but the government can do a couple of things better. It can look at the RTRI. Very few businesses understood what that program was, and the Minister responsible for Pacific Economic Development Canada was around nine months late in delivering it based on the timelines he stated when the program was announced.

If the Liberals say we are at economic war, why would they make businesses wait nine months for a program they said they would deliver in three months? That is simply not acceptable. We need confidence that the public service, the ministers and the parliamentary secretaries are going to step up, hold their public servants to a higher standard, do things in their power and actually move at the speeds they said they would in the last election. So far, we have not seen that. It has to change. We have to stand up for Canada. The government needs to stand up for Canada, and it is not doing that in a responsible way.

The final statistic I will mention is that according to a TD Economics report, graduates in mathematics, computer science and engineering are less likely to remain in Canada than non-STEM graduates. The University of Waterloo shows that the highest performing students are the most likely to leave Canada after graduation. Those are the entrepreneurs starting businesses. They are going to the United States to do that. We need to bring in the structural reforms to support small businesses and—

Employment

[Madeleine Chenette, Liberal, Parliamentary Secretary to the Minister of Canadian Identity and Culture and Minister responsible for Official Languages and to the Secretary of State (Sport)]

Mr. Speaker, one of the things that I really like about adjournment proceedings is that it does allow us the chance to publicly correct the record.

Conservatives were very quick to say that Canada was in a technical recession. We now know that is not the case. In August, Statistics Canada confirmed that the Canadian economy grew at an annualized rate of 3.3% in the second quarter, and also revised its Q1 figures to show that the economy grew in those months as well.

It would be nice if the Conservative Party were as quick to celebrate these achievements as they are to tell us that Canada is broken. However, sticking to the facts does not make for good social media clips or help with fundraising emails.

The world is changing rapidly. The U.S. is imposing new tariffs on Canada that are designed to hurt and divide us. At the same time, conflicts in Europe and the Middle East are driving up prices the world over. Despite these challenges, however, Canada continues to show resilience. While the new U.S. tariffs are creating headwinds, the Canadian economy is holding to a position of relative strength.

We certainly recognize that some workers, families and small businesses continue to be under pressure. That is why it is important to look at the facts, as well as the Canadian economy's overall performance. Canada's economic strength is recognized internationally. The International Monetary Fund predicts that Canada will be one of the fastest-growing economies in the G7 this year and next. Economic growth rebounded strongly in the second quarter, with real gross domestic product up 3.3%, as I mentioned. Canada had the strongest quarterly growth in the G7 and posted a second consecutive increase in real gross domestic product per capita. In addition, our net debt-to-GDP ratio sits at just 10.2%, far below the G7 average of 101.8%. In fact, Canada's net debt burden is far lower than any other G7 nation.

These facts show that Canada's economy is built to withstand global uncertainty and to continue to grow. This resilience is a direct result of the targeted measures our government has taken to support Canadians, such as making fuel more affordable for Canadians. That is why the government introduced Bill C-38, which extends the temporary suspension of the federal excise tax on gasoline, diesel and aviation fuel until January 31, 2027, after which 50% of the usual excise tax rate will apply from February 1 to March 31, 2027.

By reducing fuel and transportation costs, this measure will provide targeted relief to workers, families, farmers and businesses across the country, including in sectors that rely heavily on transportation and construction.

The government is also taking broader steps to make life more affordable, including through the Canada groceries and essentials benefit, income tax cuts for 22 million Canadians, the cancellation of the consumer carbon tax, and the GST relief for first-time homebuyers of new homes. Taken together, these measures will allow Canadians to keep more of their hard-earned money. Each one reflects a consistent principle that our government upholds, specifically that federal support must be timely, targeted and fiscally sustainable.

The Economy

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

Mr. Speaker, I have the right answer for the Conservatives, and it is called “C-38”.

Today, they have a chance to show Canadians they know that the number one issue is affordability, the cost of gas, the cost of food and the cost of housing.

The good news is that we have taken action on all three. Today, I had the pleasure of introducing Bill C‑38, which extends the temporary suspension of the federal excise tax on gasoline.

People at home are watching. Will the Conservatives do the right thing to help Canadians?