Debates of Oct. 20th, 2022

Opposition Motion—Tax Exemption on Home Heating Fuel

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, I will be splitting my time with my friend, the hon. member for Lakeland.

It is honour to once again rise on behalf of the people of Thornhill and bring their voices to Ottawa. I am proud to stand in this place on today's opposition motion from the hon. member for Calgary Forest Lawn, our new finance critic.

Today's motion could not come at a more opportune time. I hate to be the bearer of bad news, but winter is coming and it gets cold in this country. As it gets colder, Canadians are firing up their home furnaces to keep themselves warm. For many this year, the decision to turn on the heat will not be as easy as flicking a switch. Here is why.

Most Canadians who pay for natural gas or electricity can expect their bills will rise by 50% to 100% on average this winter. I am going to say that again: The cost of natural gas or electricity will rise between 50% and 100%. There are some households that are going to pay up to $3,000 this winter in some parts of this country. Where would a family find $3,000? Where would a senior find $3,000 to pay for it?

Knowing all of this, the government continues to push its plan to triple the carbon tax on seniors for the crime of heating their homes in February. It continues to push its plan to triple the carbon tax on families for the crime of heating their homes in February. The government continues to push its plan to triple the carbon tax on every single Canadian, wherever they live, whatever their walk of life, for the crime of heating their homes in February in Canada.

The price of furnace oil hit $1.984 in Halifax last week. That has gone up about 30¢. It is not a luxury to heat one's home in Canada in the winter months, yet the government wants to punish people for doing it. It calls them polluters, seniors living in this country. Forty per cent of Atlantic Canadians are living in energy poverty, yet the government wants to hit them with a tax hike. They are not polluters.

The debate today suggests that members of the House do not agree, and if Liberals are not going to back down on their plan to triple the tax, would they at least have the compassion to exempt home heating from a tax hike? Why would they not at least do that? Why would they not at least consider that?

The government would say that the price of gas is out of its control, that the reasons are international and unpredictable, and that the government is a bystander in this country. It seems it has forgotten it is the governing party, while Canadians from coast to coast to coast are being punished by the influences that are a product of the government's own decision-making. There is an inflation crisis in this country, and the government is fuelling that crisis.

The Liberals had an epiphany today. They have said they are going to solve this crisis. How do we trust a government that has created the crisis to now solve the crisis? The Governor of the Bank of Canada even agrees that policies of the government contributed to increased inflation. We would not know it from those opposite who claim that it could not possibly be true, that nothing happening today is happening because of their decisions. They are bystanders in their own government, and we are all just watching the show. Everything is outside of their control, at least when it is convenient.

We have 40-year highs of inflation. People are struggling just to afford the basics: food, gas, electricity, a home. Nearly 50% of people in this country are within $200 of insolvency. More Canadians than ever before are using food banks. We are an advanced economy. This is Canada. They are using food banks at a rate 20% higher. The sky-high costs of home heating this winter will be too much for too many Canadians, and we do not have to wait.

Everyone except my hon. colleagues on the other side are asking why. Why has it gotten so out of control? Why is a basic necessity of life so unaffordable? Why is it getting harder and harder to afford anything, let alone to get ahead? If we listen to any of the answers from the government, we would hear talk about international phenomenon and foreign wars, along with empty words and slogans about failed programs that only drive up the cost of living and add more debt that the next generation will have to pay.

The Liberals talk about our performance in the G7 as though it is something to marvel at. Here is a fact: Our country has the worst projected GDP growth of any advanced economy. It is last, and it is on page 25 of their own budget document, in last place. Enough with the talking points and the excuses. We know what the real answer is. The deliberate actions of this government are driving up the cost of everything in this country, and ignoring it has become an embarrassing defence of the indefensible.

The Liberals gave us a tax plan disguised as an environment plan, which has been directly cited for higher energy prices. The carbon tax is working so well that it has already been raised three times, yet we are still no closer to meeting any single environmental target, and emissions have gone up. There is no member in the House who can say that we raised taxes on Canadians and emissions went down because it did not happen. We have not hit a single target.

Today, we have the opportunity to give Canadians a break and maintain the Liberals' record of not hitting a single target. They are not going to do it if we cut the carbon tax. They did not do it with the carbon tax, and they are not going to do it if we raise the carbon tax. Nobody on the other side can tell me how high the carbon tax has to go for them to hit a single target. Not one of those members can answer that question.

Canada is the only country in the G7 that has raised fuel taxes during a period of record-high inflation, which is another fact. Canada raised taxes when more than 50 other countries, other governments worldwide, provided tax relief to ease the burden of inflation at this time. What do other countries know that we do not?

We have so many natural resources in this country, and that includes vast reserves of oil and natural gas. Instead of promoting production here in Canada, lowering prices and creating good-paying jobs, we are chasing opportunity out of our country with more red tape, regulations and policies that make it clear to job creators that they just might be more valued somewhere else.

When I say that everybody knows about the Canadian cost of living crisis, that includes the Prime Minister and the members on his front bench. They have admitted that prices are out of control, and they recognize that people are having trouble paying their bills. On Monday, the Minister of Finance said that times are only going to get tougher, and we know that it is due to a government failure to control the drivers of inflation. They are the ones doing it.

Even though Liberals know that Canadians are struggling, they are serving up more punishing policies to go along with the freezing cold temperatures that we are about to have. They are going to triple the carbon tax. The government has no plan to support our domestic oil and gas industry, and it is counting on the path of reckless government spending that will drive up the cost of the goods we buy and the interest we pay.

Before members of the House disparage the oil and gas industry more than they already have today, I will remind everyone that Canadian oil and gas has the highest ESG rating of anywhere in the world, and we cannot build a single electric car without it. Oil and gas has been the single driver and contributor to our GDP, and that is probably why page 25 of this budget says that we have the worst projected growth in the G7, and among advanced economies.

It will become clear to Canadians soon that rising prices on food and transportation, and the 100% increases on home heating, will be directly attributed to burdening Canadians with a rising carbon tax and restricting resource development in the name of an ideological crusade that does not even reduce emissions. Let that sink in. Not a single target has been hit.

Canadians know that this is not the right path, and even the Liberals know it. The Liberal premier of Newfoundland said that the Prime Minister's policies are imposing “considerable economic hardship and stress”.

The Liberals have an opportunity to exempt home heating from their new taxes. It is time for the government to stand up for ordinary Canadians, whom they used to represent, and the middle class it promised to help. It is time for the government to give Canadians a break, and give them back control over their lives and their thermostats.

[Adam van Koeverden, Liberal, Parliamentary Secretary to the Minister of Health and to the Minister of Sport]

Madam Speaker, the Conservatives have loved avoiding three simple facts throughout this debate.

The first is that climate change is real and carbon pricing works. I appreciated the note about William Nordhaus and his Nobel Prize explaining just that.

The second is that the price on pollution is not a tax. When the Conservatives say “fuel taxes”, they are saying the Supreme Court of Canada wrong. It is not a tax. It is a rebate program, and it helps Canadians. Canadians have just received their climate action incentive payments, which is something the Conservatives like to avoid talking about.

The third is that we are delivering on dental care and rental supports, and the Conservatives are going to vote against them. By all accounts, they do not want to help lower-income kids get their teeth fixed. They do not want to see $500 put into the pockets of people who are stressed out about paying their rent.

Why is it that the Conservatives are so focused on going back to a time when they were focused on sending cheques to millionaires, making tax breaks for the wealthy and driving Canadians further and further into debt, just as they did when they were in power?

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, more than 60% of Canadians in Ontario, Alberta, Saskatchewan and Manitoba pay more in carbon taxes than they receive back. That is what the Parliamentary Budget Officer actually—

[Adam van Koeverden, Liberal, Milton, ON]

That is wrong.

[The Assistant Deputy Speaker, Carol Hughes]

I want to remind the hon. parliamentary secretary there is no opportunity for rebuttal unless it is through another question or comment.

I will allow the hon. member for Thornhill to answer without any further interruption.

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, perhaps the member can take that up with the Parliamentary Budget Officer. This carbon tax has not hit a single environmental target. It has not reduced emissions. It started at $30, and then it went to $40. It is now $50, going to $170. At what point are they going to stop this madness?

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

Madam Speaker, I thank my colleague for her speech.

What are her thoughts on the statement by the European Central Bank's chief economist about how boosting the most vulnerable people's purchasing power is the best way to fight this round of inflation, and how this policy should be paid for through redistribution, which means drastically increasing taxes on the very rich?

Do she and her party agree with this principle?

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, more than 50 countries, including those in Europe, which he referenced, have cut fuel taxes or have cut a tax during this period of inflationary pressure. When the government spends money on programs, some of those programs do not hit very many people at all, and that drives the cost of everything else up. We know that. Bank economists here have said that. Without vaporizing all of the money it is giving back to Canadians, on top of the money Canadians are not getting back when they pay more carbon taxes than they get back, it does not matter. It is fuelling an inflation crisis. Everybody knows it.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Madam Speaker, I want to take this opportunity to congratulate the member for Thornhill on the role of deputy leader of the opposition.

There are points we can agree on, such as the growth of the reliance on food banks in this country and the need to give Canadians a break. My ask for the member is around the NDP policy to have a GST exemption on home heating bills. Is that something the Conservatives would support?

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, it has gotten out of control. The inflation crisis has gotten out of control in this country, and it has been fuelled by the government. We brought a motion to the House to exempt fuel from GST, and NDP members voted against it.

I am surprised to see that, when things have gotten so bad that we are talking about little old ladies in Nova Scotia having to pay $3,000 to heat their house, they have somehow had a religious moment and they are now going to support it. We are asking the government right now to cut taxes on fuel before the winter. The question is simple. Will they support it or not?

[Mike Morrice, Green, Kitchener Centre, ON]

Madam Speaker, when it comes to affordability and the cost of fuel, what is not being discussed here, as it should be, is the reality of the gouging from the oil and gas industry that is contributing to exactly what the member for Thornhill was just mentioning. Would the member for Thornhill and deputy leader of the official opposition comment on the need to address the gouging from the oil and gas sector in the midst of a climate emergency?

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, I will address the gouging the government does in the pockets of consumers through its carbon tax. I will say it again. We have the highest ESG rating in the country in our oil and gas industry. One cannot build a single renewable without it, and it has been a driver, the singular highest driver, of our GDP. Now we are projected to have the lowest GDP growth. That is a problem.

[Shannon Stubbs, Conservative, Lakeland, AB]

Madam Speaker, I thank my deputy leader for her fiery and steadfast advocacy, not only for people who are struggling to make ends meet but also for the oil and gas industry. That is important to the Canadian economy and everyone in every region.

In December 2019, the Prime Minister broke his promise and announced that he would increase his carbon tax 566% over the level at the time. The Liberals applauded while Conservatives said what it was, which is a tax plan. It is not an environmental one, and it would inevitably cost Canadian families more to heat their homes, get to work and buy groceries. It would literally make everything more expensive for everyone.

Experts such as former Liberal MP Dan McTeague warned, “the price of the carbon tax on natural gas for home heating will now cost more than the price of the natural gas itself” and that it would “add an increase...of $900/year to an average residential natural gas bill. This will effectively double most homeowners home heating costs.”

A CBC column even cited the former parliamentary budget office Kevin Page's prediction that the Liberals' irresponsible big spending would create pressure to hike the carbon tax even higher because, of course, it goes into general revenue.

Incredibly, the Liberals have claimed that they will not raise taxes or the cost of living for Canadians. Only two years ago, the Prime Minister was asked if he would raises taxes, and he said, “we are not going to be saddling Canadians with extra costs”.

In 2019, when asked if the Liberals would increase the carbon tax, the then environment minister said, “The plan is not to increase the price post-2022.” Well, it is 2022, and it is clear that these were all empty words, since they are going to triple their carbon tax on everything.

It was not too long ago that the Prime Minister also said, “Whatever approach is chosen, this policy would be revenue-neutral for the federal government. All revenues generated under this system would stay in the province or territory where they are generated.” The problem with that claim is that this is not true either.

GST is charged on top of the carbon tax and the government's own balance sheet shows that revenue is almost a quarter of a billion dollars. As Conservatives warned repeatedly, as it did with inflation, the carbon tax is not revenue-neutral, since the government pockets hundreds of millions of dollars at the expense of Canadians.

Most Canadians actually do not get back more than what they pay in federal carbon tax. Rebates do not and will never cover the direct and indirect cost hikes on everything caused by the carbon tax. For families in Ontario, Manitoba, Yukon, Alberta, Saskatchewan and Nunavut, the fuel charge backstop costs them more than they get back. That is the truth. After it is all said and done, the carbon tax costs households more than $1,100 in Manitoba, almost $1,500 in Ontario and Saskatchewan, and more than $2,000 in Alberta.

Of course, the carbon tax, as we have always warned, has a disproportionate impact on rural, remote and low-income Canadians. Whereas farmers get the same rebates as urban Canadians, they also pay tens of thousands of dollars a year more in additional carbon tax costs.

Grain Farmers of Ontario, for example, says that it will cost more than $36,000 a year on the average 800-acre farm, not including the costs of heating their homes and their barns, which, of course, already costs rural and remote Canadians more in the first place. A second carbon tax is coming too. Energy and industrial policy experts report that it will cost every Canadian almost $1,300 more, and it will hike household energy costs by 2.2% to 6.5% with the Liberal fuel standard.

Conservatives have heard loud and clear from Canadians the disastrous toll of the Liberal carbon tax on their ability to afford to make ends meet and to purchase basic necessities such as gas, groceries and home heating. This Conservative motion asks for real, tangible and immediate action. It is asking for a way to ease the government-imposed burden on Canadians right now, to cancel the carbon tax on all home heating fuels.

Why? As Conservatives have had to say over and over, home heating is not a luxury in Canada. It is just ridiculous to have to remind the NDP-Liberal costly coalition that Canada gets really cold during the winter. The average temperature in Atlantic Canada is always below zero. In Nunavut, it ranges from -15°C to -40°C.

On my farm in Lakeland, it is an average -15°C, but let me tell the members, we sure learned last December that we better calve later in the spring when, for about three weeks, the temperature hovered around -50°C, and it was lower at night. It is not an exaggeration to say that Canadians will literally freeze if they cannot afford the cost of home heating, yet the Liberals just keep driving it up.

In eastern Canada, people have to rely on heating oil, with 63% of Prince Edward Islanders and 47% of Nova Scotians using it to heat their homes.

Those Atlantic Canadians who have to use oil for home heating will face an average loss of $900 more a year because of the carbon tax. They also will be disproportionately impacted by the carbon tax 2.0, the Liberal fuel standard. The added costs are enormous. Furnace oil in Newfoundland and Labrador has already increased 54% compared to last year. It is just cruel that the Liberals tried to justify making that even worse and are ignoring the pleas from the Liberal Premier of Newfoundland and Labrador.

Around 47% of Canadians use natural gas to heat their homes. In Alberta, the average household pays $312 in carbon tax alone on natural gas. That will go up to more than $1,200 because of the Liberals' carbon tax hikes.

Ontarians currently pay $235 in carbon tax on their gas bill. That will triple to $745. We already know that gas bills have already increased across the country to almost $1,500 a year and these guys are just going to go ahead and make it worse anyway.

Propane is is used disproportionately by low-income and rural Canadians. It will cost almost $700 a year more to fill up propane tanks because of the Liberals' costly carbon tax hikes. All these costs are, of course, more intense during colder months. Home heating will double, on average, for Canadians this winter and some will face a 300% increase in their bill.

None of this is a surprise. In 2015, a Senate committee received a submission which clearly outlined the cost of home heating increases that Canadians would pay even at that current carbon tax rate. It predicted more than $300 a year for Alberta families. It is even more than that today. It predicted $231 for Ontario families. Today it is $235.

Canadians are at a breaking point. That is why Conservatives are pushing the Liberals to cancel their plan to triple, triple, triple the carbon tax. The Canadians I represent cannot afford more taxes. Tracy from Vermilion emailed me that over a quarter of her gas bill was carbon tax. She said, “This is gross and unattainable for most Canadians” and it is “completely avoidable and unnecessary.” She asked me to fight against this tax that is crippling her family and all Canadians.

Like many of my Conservative colleagues, I have spoken many times about how the Liberal carbon tax is hurting everyone in Lakeland, from young people just getting started to seniors on fixed incomes, but the Liberals have turned a deaf ear to every single one of them. Of course, it is also part of the Prime Minister’s anti-Canadian energy agenda, designed deliberately to make oil and gas more expensive to develop and use in Canada.

As the new Conservative leader, the member for Carleton, said recently that while the Prime Minister punishes Canadians for trying to heat their homes and aims to shut down Canada’s own world-class, responsible, innovative and transparent energy development, he is obviously just fine with oil and gas, as long as it is not created in Canada and as long as it comes from dirty dictatorships.

Instead of prioritizing Canadian businesses, jobs and paycheques, the Prime Minister killed energy infrastructure that would have ensured Canadian self-sufficiency and energy security, and would have boosted Canadian energy exports to the world. His approach actually supports despotic regimes that do not come anywhere close to Canada’s environmental standards and forces Canada to import more than, for example, 70,000 barrels per day of oil from Saudi Arabia and other countries where energy development benefits only an elite wealthy few and is rife with corruption, environmental devastation and horrible working conditions.

While Canadians are freezing in their homes this winter, their tax dollars, because of the Prime Minister, will fund dictator holidays and Putin’s war against Ukraine.

Other countries get it. Australia had a carbon tax and then scrapped it because of the detrimental impact on its economy and natural resources. It has a similar economy to Canada, but it is smaller geographically with warmer weather. It is less costly to develop its resources. It is not going back. The biggest oil and gas consumer and producer in the world is the United States. No president has imposed a carbon tax there, but it has actually achieved meaningful emissions reductions, unlike the Liberal government which has missed every single target it has ever set.

The reality is that Canada is in the midst of a full-blown cost of living crisis caused by the Liberal government. From my northern Alberta riding to Vancouver, to the riding that my friend from Thornhill represents, to Newfoundland, to the north, home heating is not a luxury. It is not a choice; it is a basic necessity. All MPs should support this measure to give relief or I would suggest they turn off the heating in their offices and homes until the summer.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, the member emphasizes the degree to which the Conservative Party of today at the national level really does not want anything to do with the price on pollution, even though we have seen a majority of provinces in Canada of all political stripes, whether they are Liberal, New Democrat or Progressive Conservative, and I emphasize “progressive”, have recognized that a price on pollution is, in fact, a good thing. Over 100 countries around the world, through the Paris Agreement, have recognized that a price on pollution is a good thing.

The member talked about her constituents. Over 80% of the residents of Winnipeg North are going to receive more money back than they are actually paying into the price on pollution.

When will the Conservative Party get with what Canadians want? That is to see recognition and have a climate policy, something which the Conservative Party does not have today. When will the Conservatives provide that climate policy?

[Shannon Stubbs, Conservative, Lakeland, AB]

Madam Speaker, of course, it was actually the former Conservative government that implemented the polluter pay principle, and what Conservatives are saying is that the proper, affordable, accessible, feasible and real path toward environmental stewardship and lowering emissions is technology and not taxes. This is what is so confusing about the proponents of the Liberal model of carbon tax, who also want to shut down the oil and gas industry at the same time. Among private sector investors in renewable and alternative energy technologies, 75% of that investment in clean tech and innovation comes from traditional oil and gas companies in Canada.

Here is the issue: The Liberals need to justify their policy by showing that it works, but they have not met a single solitary target, so instead they are just being cold-hearted and cruel and are punishing Canadians.

[Monique Pauzé, Bloc, Repentigny, QC]

Madam Speaker, in her speech, my colleague once again pointed something out, and it is not the first time I have heard it today. Apparently there is such a thing as clean oil, and apparently Canada buys oil from countries run by dictators.

I would just like to point out that, in September 2015, in the middle of an election campaign, Mr. Harper justified the sale of weapons to Saudi Arabia, whose human rights abuses are well-known, on the grounds that we needed to put jobs first.

That was just the introduction. My real question is about something else. It seems that Canada is exporting more clean tech. That generates lots of jobs. Many of our companies are leaders in this field.

Why not talk about clean technology, rather than remain mired in the past with fossil fuels?

[Shannon Stubbs, Conservative, Lakeland, AB]

Madam Speaker, I literally just talked about that in my previous answer 30 seconds before the member asked me that question. I specifically and proactively addressed private sector investments in clean tech and innovation. What I am saying is that it makes no sense to try to shut down the industry, as my colleagues from the Bloc want to do, which is simultaneously the single biggest private sector investor in renewable and alternative energy technologies and is a world-class leader in emissions reductions and innovation.

This is why the Liberals' policies are contradictory. This is why the NDP and the Bloc do not make any sense. They actually want to landlock, keep in the ground and shut down the industry that actually is the biggest investors in the private sector of the very technologies they say they want to come to fruition.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Madam Speaker, I know the member quite well, and I know the member really cares about the cost of living crisis that is facing Albertans. I do too.

The community members I know in Edmonton Griesbach are being hurt by expensive goods. In order to get the “real, tangible” help to Canadians the member mentioned in her speech, would the Conservatives agree to amend the motion to ensure we can actually get something to Canadians? Would they agree to remove the GST from home heating and get that help to Canadians?

[Shannon Stubbs, Conservative, Lakeland, AB]

Madam Speaker, I have great respect for the member, and I am proud to represent his friends and relatives in Fishing Lake Métis Settlement in Lakeland.

Here is the reality: In 2019 the Conservatives ran on removing the GST from home heating, but really the solution is just to axe the carbon tax completely instead of that proposal. I would just urge the member of Parliament, since he shares our concerns about the cost of living even though he is propping up the Liberals who are the cause of it, to support our motion today and give that immediate relief to Canadians.

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

Madam Speaker, the current inflationary crisis is affecting everyone and putting millions of households in hopeless situations. Families must make agonizing choices to be able to continue making rent or mortgage payments. Many low-income Canadians are cutting back on food and going hungry. The same is true for many middle-class households that are heavily in debt. Such a huge increase in prices, especially for food, energy and housing, creates considerable hardship, and that is not something to take lightly. My thoughts are with the millions of seniors who were already struggling to make ends meet before prices started going up. They are now facing an impossible task, making choices or making cuts to their budgets.

The inflation crisis is one of the most worrisome issues in the world, and I commend those who are trying to address it and find solutions.

As members know, the current increase in prices we are experiencing is essentially a global phenomenon and analysts generally agree that the situation is primarily attributed to a decrease in aggregate supply. The supply chain problem led to a significant drop in supply. It is the same thing with the war in Ukraine. Crop failures due to droughts or floods are also reducing supply in the food sector. Labour shortages, which existed before the pandemic but have gotten worse since, are limiting business activity, leading to a decrease in total supply, and so on.

On the demand side, we have seen more of a change than a significant increase in demand. During the pandemic, people shifted their usual consumer choices to new sectors. Supply was unable to adapt quickly enough, so we saw new price increases and often shortages, resulting from the imbalance.

We are seeing the same type of imbalance in the real estate market, where the construction of new housing is insufficient to meet demand. Inflation in that sector is also being spurred by the labour shortage and the increase in the price of building materials, which is itself explained by the current inflationary situation and the change in consumer habits during the pandemic, not to mention the impact of the war.

Even though the central bank's injection of money into the economy and the government's support to maintain consumer spending during lockdown were more generous than necessary, because they were not always well targeted, the effect of those interventions on the increase in global demand and on prices is generally secondary. The government's actions are not the main reason for the global inflationary crisis.

Unfortunately for us, and especially for those impacted the most by the current rate of inflation, there is no simple solution to a decrease in aggregate supply. The best solution is to support businesses as they adapt to the new reality. It is a long and complicated process, but as I said, even if the effect is not felt immediately, it is the best solution.

For example, let us look at the labour shortage. The government could provide support for the automation of some economic activities. The government could also change the tax system to entice young retirees who want to remain in the labour market, perhaps with part-time work. The government could provide support for companies that invest in resilience, for example by making decisions that cut their energy consumption. The government could also do this for households, of course. That is the primary solution for addressing the supply side of the issue. Unfortunately, this government is doing very little about it.

It is said that the central bank is well positioned to use monetary policy to counter inflation. The Bank of Canada must ensure that the overall economy is in good shape. To that end, its main policy objective for the past 30 years has been to keep the average annual increase in prices within a range of 1% to 3%. As we know, we are well past the upper limit now.

Although the central bank is extremely well equipped to control inflation when the economy is overheating because of an increase in demand, the situation is very different in the event of a decrease in supply. That is because successively raising its key interest rate does not allow the central bank to influence supply. It simply reduces demand.

In other words, since production is insufficient to meet demand, equilibrium prices rise. All the Bank of Canada can do is lower demand to reduce the price increase. However, at the end of the day, there are not more goods and services available, only less room to manoeuvre and borrow to make consumption or investment choices.

The risk of such a monetary policy is that if we are not in an overheated situation when the policy is implemented, the central bank's action could also slow down the economy or even plunge it into recession.

Again, there is not much that either monetary or fiscal policy can do to respond to a supply crisis. These policies aim to reduce demand in order to lower prices, but they do not allow for increased production in the short term.

I want to reiterate that the best government policy is to support businesses and help them adapt and become more resilient in order to push supply back up, even though that does not happen automatically.

We should also take advantage of the current situation to accelerate the shift to a green economy. We can kill two birds with one stone. The government's response to the current crisis must be tied to the goal of reducing pollution.

I also want to reiterate that we need to avoid falling into the very tempting trap of responding to a decrease in supply by giving everyone money. That kind of policy may appear to meet people's needs, but it will quickly fuel inflation. It is therefore a futile, ineffective policy, especially if it drives society as a whole into debt. It is a good solution, but not for a supply-side crisis. In the same vein, the inflationary crisis should not be an excuse to shirk our much-needed climate change commitments.

I would like to remind the House that the federal carbon tax does not apply to Quebec, which has its own approach using a carbon exchange. I would also like to remind the House that very few households in Quebec heat with oil. They heat mainly with electricity, which is renewable.

Finally, let us not forget that the provinces, such as Newfoundland, are free to set up their own environmental plan and can choose to waive taxes on home heating fuel. Provinces like Newfoundland that are fortunate to have significant hydro power capacity can also offer incentives for people to switch from oil to electric heat.

Finally, with respect to the current inflationary crisis, again, there are no simple or easy solutions. We can help companies pivot. We also have a moral obligation to help the most vulnerable people and the hardest-hit sectors cope. Think of individuals and households with low incomes. Think of seniors who depend on small, non-indexed pensions. Think of sectors that are bearing the brunt of inflation, such as agriculture.

The European Central Bank's chief economist reminded us that a good way to fight inflation is to redistribute wealth rather than go into debt to support households and individuals. This means targeted measures for the less fortunate financed by a special tax on the wealthiest. Let us seriously consider that suggestion. The one thing we must not do is react to the crisis by once again abandoning our efforts to fight climate change.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I have a reflection on a commitment that was provided by the Conservative Party in the last election. It made a platform commitment that it supported the principles of a price on pollution.

Given the very nature of having a price on pollution, we see a general acceptance in Canada, with the Province of Quebec being an excellent example of that, and see what is happening around the world. Take the Paris Agreement back in 2015. Does the member have any concerns with the official opposition changing its policy position and adopting the belief that there should not be a price on pollution, period?

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

Madam Speaker, I think most members in the House recognize the connection between climate change and human activities. Strong, credible and expeditious commitments are needed.

For the Bloc Québécois, the Paris Agreement is the minimum. We really must not exceed those targets. We know from the natural sciences that, if we do meet them, the effects might be too much, so strong action is required.

[The Assistant Deputy Speaker, Carol Hughes]

It being 5:15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply.

The question is on the motion. Shall I dispense?

[Some hon. members]

No.

[The Assistant Deputy Speaker, Carol Hughes]

[Chair read text of motion to House]

If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.

The hon. member for Souris—Moose Mountain.