Finance Committee on March 21st, 2024

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Yes, if we're agreed, we can go straight to the motion. I think that's a great thing.

[The Chair, Liberal, Peter Fonseca]

Is there agreement for that?

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

Is there any discussion on this one? We have a few minutes, and then we have the minister coming in.

MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

I'll mention something very quickly.

In general, you've touched on an issue that I think just about every Canadian is thinking about. It doesn't matter if you have no money or if you have some money. Everybody is noticing how expensive groceries are.

In general, I don't like these mechanisms of putting additional taxes on our businesses. I want them to be able to do their work. I appreciate that our government has done quite a bit to try to increase competition, which is the right way to go about providing the right incentives for the grocery sector to behave well. However, in the absence of that, and while we're waiting for a lot of our new competition policy elements, I'd be very open to supporting this motion.

I know we'll be discussing this a bit more later on, but I wanted to mention that.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

MP Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

Certainly, we Conservatives agree that there's an affordability crisis in Canada. We've seen record numbers for food bank usage, with two million Canadians or more using food banks and I believe an additional million expected this year. In addition to that, we also now have a dumpster diving Facebook group in Toronto, with over 8,000 members. The cost of food has never been higher in Canada. It's never been so far out of reach.

We're also facing a productivity crisis. It has gotten to the point where nearly all economists are now talking about Canada's productivity crisis. We even have international attention from economists and those who comment on the business community, with our sputtering GDP per capita.

I think there's a very easy solution to reducing the cost of food. That is to reduce or eliminate the carbon tax. Instead, we are increasing the cost of the carbon tax.

Of course, the carbon tax is not just put on the end-user. The carbon tax is put on our farmers, who of course plant and harvest our crops utilizing their tractors, and on those who truck our food and who take it across Canada. There's a carbon tax on multiple levels.

The PBO has told us that even with the Canada carbon rebate—I hope I got that right, guys, on the Liberal side; I want to make sure I get your branding right— that there's a net loss in every province where the backstop applies. In Ontario, it's about $600. In Alberta, it's $1,000. I believe it's even a net negative in Manitoba. If I were going to be an adviser on intergovernmental relations, this might be where I start.

Certainly, Conservatives have been in agreement that there needs to be greater competition, but there's a very simple solution and that is to spike the hike and axe the tax.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

I have MP Ste-Marie, but I will have to end this in one minute.

Go ahead.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I'm in favour of the motion, but I'd like to move an amendment that would give Quebec the right to withdraw with full compensation, given that education is a provincial power. I could move it when we return to this topic.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie. We will get to that, if you can send it to the clerk. Thank you.

We are suspended now for the transition to the minister.

[The Chair, Liberal, Peter Fonseca]

Pursuant to the order of reference of Monday, March 18, 2024, and the motion adopted on Monday, December 11, 2023, the committee is meeting to discuss Bill C-59, an act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023, and certain provisions of the budget tabled in Parliament on March 28, 2023.

With us today, we have the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance. Welcome, Minister.

Joining the Minister is the deputy minister of the Department of Finance, Mr. Chris Forbes. Welcome.

We look forward to hearing your remarks and answers to questions from members.

Minister, I'm sure you already know that one of our colleagues here at committee and from Parliament, MP Daniel Blaikie, is having his last day here at this committee.

Minister, the floor is yours.

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

I do know that it will Daniel Blaikie's last day. His family is here. It's nice to acknowledge that they're here. Maybe if you ask me a question, I'll say a few things about him.

I'll just start with a few opening remarks.

Thank you, Mr. Chair.

I am very pleased to appear before you and the members of the committee to discuss Bill C-59, Fall Economic Statement Implementation Act, 2023 and the main estimates.

Before I begin, I'd like to take a moment to pay tribute to the life of Brian Mulroney. I want to recognize one moment in particular that was really meaningful to me and to many Canadians.

In December 1991, the people of Ukraine voted overwhelmingly for independence in a national referendum. I was there as a reporter covering it. The day afterwards, Brian Mulroney as Prime Minister of Canada took the initiative, and was the first western leader to recognize an independent Ukraine. That was a historic act and a historic decision. It was a great thing he did for Canada.

Since then, Canada and Ukraine have developed deep and significant ties that have steadily strengthened, particularly now, as we stand with Ukrainians in their heroic ongoing battle to preserve their democracy.

On behalf of the Government of Canada, I would like to take this opportunity to extend my deepest condolences to the Mulroney family and commemorate a truly great Canadian leader.

Bill C-59 is central to our economic plan, whose intent is to help make life more affordable, to build more housing and to create good jobs from coast to coast.

I would like to start with a bit of economic data.

Inflation in Canada fell to 2.8% in February. That was down from 2.9% in January, and down from its peak of 8.1% in 2022. Inflation has now been within the Bank of Canada's target range for two months in a row. That is good news for all Canadians and for all members of this committee.

Earlier this month, DBRS reaffirmed Canada's AAA credit rating with a stable outlook. That's a powerful proof point of our government's fiscally responsible approach. All of this is progress, but we know that so many Canadians, especially young Canadians, are still struggling to make ends meet and feel confident about their future.

Our economic plan will change that. That is why I'm so glad to be here to talk about Bill C-59 and why it's so important to pass this bill into law.

Here are some of the important measures in the bill, which I hope will be supported by the members.

It does away with the GST on new residential buildings designed specifically for rentals under eligible co-operative housing projects.

We're making the math work for builders by creating incentives for them to build more homes that would otherwise not move forward to construction.

We are making our generation's most significant amendments to Canada's competition law, a transformation that will help stabilize prices and broaden choices available to Canadians. To make it possible for people to receive the mental health support and care they need, we are eliminating the GST and HST on counselling and psychotherapy services.

We are delivering a transformational investment tax credit for carbon capture, utilization and storage and an investment tax credit for clean technology. These are the first two of our five major investment tax credits. It is absolutely urgent to pass these measures into law as soon as possible. Investors need that certainty.

We're supporting Canadian workers by linking these investment tax credits to historic labour requirements. They will give businesses an incentive to pay a prevailing union wage and to create apprenticeship opportunities.

The swift passage of Bill C-59 would enshrine these two major investment tax credits into law and ensure that companies could create well-paid jobs and attract more investment to Canada.

Bill C-59 presents real, concrete action to address the challenges that Canadians are facing. That is why I'm urging all MPs who are here to support the bill's swift passage.

Thank you.

I would now be happy to answer any questions you may have.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister.

Now we will go to members' questions. In the first round, each party will have up to six minutes.

We are starting with MP Hallan, please.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thank you, Chair.

Minister, do you have faith in the Parliamentary Budget Officer?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Certainly. I also have faith in the Calgary business community. I was in Calgary just six days ago, and I met with representatives of the oil and gas sector and of the renewable sector. They told me specifically to get Bill C-59 passed now and that they needed those tax credits.

I know you're an MP from Calgary, so I thought you would like to know that.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Minister, do you believe in his economic and fiscal analysis of the impact of your carbon tax?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

What I know and what study after study has shown is that the price on pollution and our carbon rebates put more money in the pockets of eight out of 10 Canadians. For people in Alberta, the province you are so fortunate to represent, it's going to be $1,800 per family.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

What is the cost of the carbon tax every year if there's an $1,800 rebate?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

The question that I think Conservatives need to answer is this: What is the cost to Canada of not having an environmental plan, of not having a carbon plan? I can tell you what that cost is. It is no inward investment and no investment by Canada's own companies.

I was very glad to be outside of Edmonton at the end of last year to announce the multi-billion dollar Dow investment. The CEO of Dow said that it is thanks to Canada's pollution pricing system and our tax credits—two of which we're debating today—that they made the multi-billion dollar investment that's creating jobs for people in Alberta.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Minister, I know Alberta speeding authorities. I know very well that you were in Edmonton last year as well.

Your own environment department said they don't track how much emissions are reduced by your carbon tax, so there's no actual data, but I'll ask you this once again. You said that an average Alberta family gets $1,800 in rebates. How much is the cost to an average Alberta family according to the PBO?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Let me quote an important document:

Our plan will ensure that all Canadians can do their part to fight climate change, in a way that works best for them, and at a carbon price...that is increasing to $50/tonne....

We will assess progress...[so] carbon prices [can be] on path to $170/tonne.

I know those words are familiar to you, Mr. Hallan, because they were in the Conservative 2021 election platform that you ran on. Every single person here was elected with a commitment to put a price on pollution. That is something we all need to do because our economy needs it. Investors require it.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Minister, I asked for a number. Since you're not providing it, the cost is $2,900 for an average family. According to you and the PBO, $1,800 is the rebate, which leaves Albertan families in the hole after your phony so-called rebate. Albertan families will pay more into it.

You're a member from Ontario. Can you tell us how much an Ontario family will pay into the carbon tax?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Hallan, let me first take issue with the notion that there is anything “phony” about the $1,800 that Alberta families will be receiving this year. That's $1,800 directly into the pockets, into the bank accounts, of hard-working Alberta families. That will make a real difference to Alberta families. There is nothing phony at all about that—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I just need the number, Minister. How much does an Ontario family pay into the carbon tax?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Ontario families will be getting a rebate this year of more than $1,100, and that is money directly into the pockets of Ontario families. I can tell you something else. The province of Ontario is benefiting from—