Finance Committee on Oct. 1st, 2025

[Amanda Riddell]

The relief is directed towards newbuilds, which, of course, have GST. GST doesn't apply to existing housing for the most part. Because it's directed at new homes, this incentive, which is fairly generous, is intended to encourage first-time homebuyers to consider a new home rather than an existing home. That should increase demand for the new home market. There should be a supply response from builders, who will then construct new homes to meet that additional demand.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you.

We've been talking a bit about buying houses, but, of course, many people are renting as well. A lot of young Canadians are not yet in a position to buy. How would this measure help Canadians who are paying rising rents and can't realistically afford a down payment?

[Amanda Riddell]

This measure doesn't directly help people who are renting, in the sense that the benefit flows to the people who are buying homes, but it could indirectly help people who are renting to the extent that it increases the supply of homes more generally.

More importantly, a huge relief measure was provided back in 2023, when the government introduced the purpose-built rental rebate, which provided a 100% relief on the GST for purpose-built rentals. That should help spur the construction of more rental properties. Again, more supply generally results in lower rents.

[The Vice-Chair (Jasraj Hallan), Conservative, Jasraj Singh Hallan]

That's your time.

Next, we have Mr. Garon.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Chair.

Officials, thank you for being here today.

I'm going to start by asking the Department of Finance officials a question about carbon pricing, which I'm sure they expect to be asked.

During the election campaign, there was an announcement of a Bill C‑4 measure on eliminating the carbon tax for consumers. My understanding is that carbon tax rebates were paid in advance.

Was the last payment, which was made a few days before the election, funded from carbon tax payments that had already been made in the provinces where it applied, or was that money taken out of the consolidated revenue fund?

[Gervais Coulombe]

Thank you for the question.

I can start answering the question, and Ms. Gormanns can then add details, if necessary.

There are two things to note. First, the amounts collected under the fuel charge and the rebates that were made, including the climate action incentive payments, are always reconciled after the payments have been made. In all cases of payments in the history—

[Jean-Denis Garon, Bloc, Mirabel, QC]

I'm going to interrupt you, because two minutes have gone by and you aren't answering the question.

According to a document from the Department of Finance, based on the policy, “in order to return fuel charge proceeds in advance of their collection for a quarter, CAI payments would be delivered at the beginning of each quarter.”

Was the tax refunded before it was collected, yes or no? I'm waiting for a two or three-letter word, not a 14‑sentence explanation.

[Gervais Coulombe]

What I was going to say is that, yes, it always came from the consolidated revenue fund—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you very much.

I'll move on to my next question.

[Gervais Coulombe]

—but there was a reconciliation later on.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I'm not interested in the accounting part. The Liberals stole $814 million from Quebeckers, who contributed to the rebates offered to taxpayers in the provinces concerned. It's theft, and it's vote buying. I wanted competent officials—thank you, by the way, because you are one—to answer that.

My next questions are about the goods and services tax, or GST, rebate for first-time homebuyers. We support the spirit of this policy. It's a good policy. However, when people in Mirabel or elsewhere in Quebec call the CRA to say that they've bought their first home and are asking for their reimbursement, they're told that they won't be getting it right away. There are examples of this all over Quebec. However, the government is telling us that the measure is in effect and that, since the elimination of the consumer carbon tax and the adoption of the ways and means motion, tax tables have changed. That was immediate.

How is it that a constituent of mine who is eligible for a rebate is told by the CRA that it has no idea what they're talking about and that the rebate isn't ready?

[Gervais Coulombe]

To implement the measure on new housing for first-time buyers, the reimbursement authorities are asking for the bill before you to receive royal assent.

[Jean-Denis Garon, Bloc, Mirabel, QC]

The ways and means motion isn't enough, then.

Is that correct?

[Gervais Coulombe]

A ways and means motion isn't enough to authorize payments from the consolidated revenue fund.

[Jean-Denis Garon, Bloc, Mirabel, QC]

When the government tells us that this is already in effect because the ways and means motion has been adopted, that's incorrect.

[Gervais Coulombe]

However, the application will be retroactive to May 27, 2025.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Will it be paid back with interest?

[Gervais Coulombe]

I don't know if the agency—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Constituents in my riding who have bought a home and are eligible for a rebate are being told that they have to wait before receiving it.

Since the government is saying that the measure, which was announced in March, will apply retroactively, will interest be paid on that rebate?

[Isabelle Brault]

I thank the member for his question.

I'd like to provide some additional information from the agency.

The processing will be the same regardless of the tax measure tabled in Parliament by way of a notice of ways and means motion. The notice of ways and means motion, in and of itself, doesn't give us the authority to make a reimbursement or make a payment. We have to wait for the bill to receive royal assent. The amount will be paid according to the calculations set out in the act that comes into force. The eligibility date has been extended to May 27, 2025.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I understand, and I'm satisfied with your answer. Thank you very much.

My last question is about reducing the personal income tax rate in the first tax bracket.

That obviously affects the value of refunds for certain non-refundable tax credits, particularly for people with disabilities.

Some of these people have reached out to us about this. According to them, the tax cut also reduces the tax credits they receive because of their disability. We checked the math related to their situation.

Let's keep in mind that this is about equity. The objective is to use tax measures to deliver a service to the middle class or to people who are a little poorer.

Has the Department of Finance considered ways to help these people?

Has any thought been given to measures aimed at the most affected groups? I'm talking about people with disabilities, but this also applies to many non-refundable tax credits that are calculated for individuals in the first tax bracket.

[Stefania Bartucci]

The Department of Finance is aware of the concerns from these stakeholders. We are conducting our analysis and considering options.

I want to provide a quick background on exactly what's happening here. The first tax rate is linked to the non-refundable tax credit rate, so when the first tax rate goes down or up, the same thing happens in parallel with the credit rate. The purpose of the linking is to offset the tax on the income that is used to pay for whatever expense is related to the tax credit the person is claiming. We use the lowest rate for that, because everyone who pays tax, irrespective of what bracket they're in, will pay the lowest rate on at least a portion of their income, so it's a principle of fairness in the system. It also ensures that people claiming similar credit amounts receive the same tax relief, irrespective of their level of income. Consequently, that does mean, for anyone who claims a non-refundable tax credit in 2025, that rate will go from 15% to 14.5%, and in 2026 and future years, to 14%.

[The Vice-Chair (Jasraj Hallan), Conservative, Jasraj Singh Hallan]

Thank you. That's the time.

We're moving to our second round.

First, we have Mrs. Cobena for five minutes.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Can you tell the committee how many homes have been built in Canada over the last 12 months?

[Amanda Riddell]

Off the top of my head, I don't know. I'm assuming it's in the high two hundred thousands.