Finance Committee on Oct. 5th, 2026

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

What if you don't have the money?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

—this is the way to create an investment cycle. This is good for farmers. This is good for fishers. This is good for small and medium-sized businesses. It's applied across the board in Canada. You just take it from build Canada, take it from a number of different sources.... I can quote for you even the Canadian Chamber of Commerce. They said that this is the measure we have been “waiting for”, or something close to that.

This has been commented on because this is addressing the productivity and innovation challenge we've had in this country for quite some time, and it's a measure that's going to help everyone. It's one of these flagship measures. There's urgency for this committee to act, and I appreciate, Mr. MacDonald, what you're doing—and members of the committee—because the people at home expect this to be passed in legislation. This is the kind of measure that speaks to every business owner in the country, every entrepreneur and every manager, because now you get the best possible tax treatment that we have not only in the G7 but also pretty much in the OECD countries. That's a very interesting measure.

I know it's well received in a place like P.E.I. I know that the people of P.E.I. know how to build things. It's going to help with projects also in Atlantic Canada, because we have expanded the capital investments by about 66% now and more that's going to be covered with this measure. This is really a flagship measure.

For my colleague who was asking before, “What have you done recently?”, well, this is the biggest corporate tax change.... I'm looking at Mr. Leitão, who was the minister of finance in Quebec. It's probably the biggest corporate tax change in 50 years in this country, but we're just getting started. We want tax simplification. We want to make it easier for businesses to do what they have to do and to support entrepreneurs and those who take risks and create jobs every day.

[Kent MacDonald, Liberal, Cardigan, PE]

Thank you, Minister.

I'm going to cede the rest of my time to Ms. May.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you so much, Kent.

Thank you, Minister.

I'm going to be as succinct as I can. How much time is there, Madam Chair?

[The Chair, Liberal, Karina Gould]

You have a minute.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Here's my question, Mr. Minister.

This is the second time this year, with Bill C-30, an omnibus budget bill, and Bill C-31, the follow-up to Bill C-30, and the first time in my experience—not just as a parliamentarian but as a person who's worked on pesticide laws for the last 50 years—and the first time in my knowledge, that a finance minister has used omnibus budget bills to fundamentally weaken pesticide regulations, this time through removing the mandatory postmarket re-evaluation.

Mr. Minister, why have you, as Minister of Finance, done this? Why did cabinet and the Minister of Health, who's in charge of pesticide regulation, not decide, if there was a need for reform—which isn't established—and not develop the legislation so that it's properly studied and comes after consultations with the affected parties?

[The Chair, Liberal, Karina Gould]

You have 15 seconds, Minister.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Okay. I'll try to do justice to a very important question.

First, I want to thank you, Madame May, because I always take very seriously every comment you provide.

We're doing that in a way that will simplify our regulations and, at the same time, maintain the highest standard when it comes to health and safety. I'd be happy to engage with you separately, because as I said, I always value your feedback in anything.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

I love you too, but the point is, why would the Minister of Finance do this?

[The Chair, Liberal, Karina Gould]

Thank you, Minister.

Thank you, Ms. May.

I apologize. That was a fast minute. Well, it was a regular minute. It just went by quickly.

We will continue now—

[Voices]

[Inaudible—Editor]

[The Chair, Liberal, Karina Gould]

Ms. May and Minister, thank you. I appreciate the passion. I love the engagement, but I'm trying to keep the meeting on time.

I'm turning to Mr. Lawrence for five minutes.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

None of you guys showed that much emotion.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you very much.

I think “love” is a strong word. I'm not sure if I'm there yet, Minister Champagne.

As you know, since Bill C-31 was introduced, the world has changed in a number of different ways. One of the most under-reported stories is the increase in the bond yields and the cost of this. I want to break it down in terms of one of my residents in Northumberland.

The average mortgage is around $300,000, $400,000 or $500,000. If in fact you were renewing a fixed-rate mortgage at $500,000, you would be going from about 2% to about 4%. That's a cost for the average homeowner of about $6,000, which dwarfs any type of benefit you're having in terms of affordability.

Do you have any policies for individuals who are struggling because of the increased cost of their mortgage?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you very much for your question. It's something I follow every day.

As you've seen, the bond markets in the world have shown a lot of volatility. We've seen the yields increase. Actually, when you look at Canada...and I just brought that because I expected you to ask. I mean, if you look, we're the country in the G7 that's pretty much borrowing at one of the lowest levels that you can find in the G7. That's something we're following, because, as you point out, we have seen the yield increase, but we continue to borrow at one of the lowest rates in the advanced economies, one of the lowest rates you can find.

We were looking at.... If you compare the borrowing costs, you know, we're projecting 1.7% of GDP in 2026-27, which is far below the peak of 6.5% you saw in the nineties. You've seen a movement around the world. It's all about the uncertainty, instability and complexity of the world. You're quite right. We're not immune to what's going on in the world, but I want to reassure Canadians that if you compare us to the other G7 nations, we're still one of the countries that borrows at one of the lowest levels.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

The reality, though, is that over the last couple of months our bond yields have increased to 3.95%. If I go back to the individual who is renewing a fixed mortgage, it's going to be $6,000 more per year for them. In a time when we've seen limited if not zero economic growth.... Our economy was, of course, the only one in the G7 that fell into recession. We have the Trump tariffs coming into place. There are many people in my riding who are going to lose their jobs. On top of that, their mortgage, if they're renewing, is going to be $6,000 more.

What advice do you have? The bond market...the lending is cold comfort to them.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I agree with you. That's one of the things I said at the G20 in Asheville, North Carolina, when we were there. It's the transmission of global events to pocketbook issues for people. It's the cost of food. It's the cost of gas. Now, as you said, it's the cost of housing, in a way, because of what we see in the bond market.

People at home and in your riding understand that there are a lot of things we cannot control, but what we can control is building one Canadian economy. What we can control is diversifying our market. One thing we can do is support Canadians at a time of need. We can build more homes, provide the Canada groceries and essentials benefit, and extend the suspension on the excise fuel tax on gas. Those are the types of things we control. I agree with you that there are a number of external factors beyond that, and Canada is not immune. However, with everything within our control, we're trying to support the people in your riding.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

With respect, there is one thing that's very much under your control. Of course, as you said, a number of global factors are driving the bond yield, but one issue is that there have been rapid expenditures by governments, including the Canadian government. We have a deficit of well over $50 billion, and that large amount of pulling down has driven up the cost of borrowing, has accelerated the bond yield.

Will you commit to the next budget's having no new spending or at least matching any new spending with offsetting costs?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I'd say we're entering this period in a position of strength. We have the lowest net debt-to-GDP ratio of all the G7 countries. We have one of the lowest deficit-to-GDP ratios in the G7. We're one of the few countries—with Germany—with a AAA credit rating.

You don't need to take it from me. Even the International Monetary Fund was saying that countries like Canada and Germany, which have the fiscal capacity...that investing in housing, innovation and productivity, making sure that you build a country with capital and investment, is the way to go. This is exactly what we're doing.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you, Minister.

I understand that you're talking about charts and the IMF and all that stuff. I'm trying to relate this back to the individuals in my riding, who might be losing their jobs because of everything that's going on with the failure to get a deal with the U.S. Now their mortgages are going up by $6,000, so it's cold comfort to them.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Lawrence.

Thank you, Minister.

Mr. Lavoie, we'll continue with you for five minutes.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Madam Chair.

Thank you, Minister, for joining us today. It's always a pleasure to have you here.

You won't be surprised by the topic that I'll discuss with you. It's the superdeduction for companies.

I'm sure my colleague across the table will be pleased to hear that I worked in banking for a long time. Any capital cost allowance that companies can claim changes their financial position somewhat. In this case, it's a huge change. I'm really thinking about the financial structures that make it possible for banks to plan loans, lines of credit and investments for companies. The superdeduction will make it possible to plan all this in terms of companies' cash flow. I'm thinking of companies in the Quebec City region, of course, including the ones in Beauport—Limoilou.

Tell me a bit about where the idea for this superdeduction came from. On a global scale, I think that we're becoming the country that provides the best deduction. I would like you to tell me about it. Where did the idea come from? Why is it so important for Canada to distinguish itself globally in this area?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

First, thank you, Mr. Lavoie.

You are quite right. The megadeduction is a flagship measure. It reduces the tax rate on new investments from 13% to 6.4%. That represents a significant advantage. We need to consider how Canada compares with other countries. As shown in a chart that's been published and that my colleagues have already seen, our rate of 6.4% places us in a favourable position relative both to the OECD average and to our neighbours to the south.

The breadth of the measure is also noteworthy. Approximately 67% of the capital investments made by the businesses with which you work would qualify. Businesses can immediately deduct the cost of eligible investments, and the measure is permanent.

In addition, it's an economy-wide measure. That's why it's good news for businesses of all sizes. We have said that it's one of the strongest measures we could introduce—and I choose my words carefully—it applies across all sectors and throughout the economy. My colleague referred, for example, to a coffee shop or a bar. Such businesses would be eligible, just as large corporations would be. The measure also applies to investments in major infrastructure projects. In that sense, it serves as a powerful catalyst for a new investment cycle. That's precisely what the country needs.

We recently held the Canadian Investment Summit. As you've seen, Canada is attracting renewed international attention. Why is that? I often point to five key strengths. First, Canadians are among the most highly educated people in the world, and we continue to attract exceptional talent. Second, we have strong industrial capabilities. You know that, because you're from Quebec City. We build ships, aircraft and automobiles. We're also a leader in artificial intelligence. Third, we possess the critical minerals that will help drive the economy of the 21st century. Fourth, we have abundant energy resources, and we're working to double our energy production by 2050. Finally, Canada is the only G7 country that has a free trade agreement with every other G7 country.

The major global trends today are energy, critical minerals and artificial intelligence. Canada is well positioned in each of these areas. That's not simply my assessment: Fatih Birol, executive director of the International Energy Agency, stated in Montreal that the global energy infrastructure landscape is being reshaped and that Canada would be at the centre of that transformation. It's a generational opportunity.

When those advantages are combined with a competitive tax environment for investment, they provide a strong foundation for attracting as much investment as possible to Canada, fostering economic growth and creating jobs.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Minister.

I will be brief, as I see that time is running short.

In the greater Quebec City region, where I'm from, 50% of businesses have five employees or fewer. More than 70% to 80% have 10 employees or fewer. If I understand correctly, this measure is intended to benefit small businesses just as much as larger ones. In other words, it is designed for businesses of all sizes, not only for large corporations.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Everyone stands to benefit from this measure. It's a welcome boost for all small and medium-sized businesses. It's been well received by commentators and, more importantly, by SMEs themselves. We often hear that, while major projects and large infrastructure investments are important, businesses want to know what's being done for SMEs. Our colleague raised a similar question earlier. This measure is the answer. It's a tax measure that applies to businesses across the country and is designed to support job creation, economic growth, productivity and innovation.

I recently met with my provincial and territorial counterparts at a meeting of finance ministers that I hosted. There was broad recognition that this is one of the measures needed to stimulate investment across the country.