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View Peter Fonseca Profile
Lib. (ON)
I call this meeting to order.
Welcome to meeting number 59 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2) and the motion adopted on Wednesday, September 28, 2022, the committee is meeting to discuss Bill C-30, an act to amend the Income Tax Act.
Today's meeting is taking place in a hybrid format, pursuant to the House Order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.
I'd like to make a few comments for the benefit of the witnesses and members.
Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. For interpretation for those on Zoom, you have the choice at the bottom of your screen of either “floor”, “English” or “French”. For those in the room, you can use the earpiece and select the desired channel.
I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can, and we appreciate your patience and understanding in this regard.
I'd now like to welcome before us the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance.
Welcome, Minister.
The minister is accompanied by officials from the Department of Finance. We have with us Nicholas Leswick, assistant deputy minister, and Lindsay Gwyer, director general, legislation, tax legislation division, tax policy branch. They are here by video conference, members, so if you are asking a question to one of the officials, you may want to look at the screens.
Also here is Pierre Leblanc, director general, personal income tax division, tax policy branch.
Minister, before your remarks, just on a personal note, I know how strong you have been in supporting Ukraine. We do have a number of Ukrainian—well, my wife is of Ukrainian descent, and I know Julie is also of Ukrainian heritage, and of course Yvan Baker is. I'm not sure about any other members. On behalf of all of our committee, I want to thank you for the great support that you have provided to Ukraine, and I think I speak for all of us here when I say that we are celebrating the gains that Ukraine has made in the last while. Thank you, Minister.
The floor is yours for your opening remarks.
View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Mr. Chair.
I believe Nick is also of Ukrainian descent.
I think maybe one of the things we are all united on is our support for Ukraine, whether you are of Ukrainian descent or not. Thank you for starting there.
Mr. Chair, it's my pleasure to appear before you and members of the committee to discuss Bill C-30, the cost of living relief act, which would deliver targeted tax relief to the Canadians who need it most by doubling the goods and services tax credit for six months.
That would mean up to an extra $234 for single Canadians without children, nearly $500 for a family with two children, and an extra $225 on average for seniors.
This is additional support for roughly 11 million eligible people and families.
And Bill C‑30 is just one element of our new support package. As members of this committee know, Bill C‑31 includes a Canada Dental Benefit and a one-time top-up to the Canada Housing Benefit.
If we pass these two further pieces of legislation, up to half a million children under 12 will be able to go to the dentist. Low-income renters, some of the most vulnerable among us, will receive a little extra breathing room.
These measures are part of our affordability plan, which has already been putting more money back in the pockets of Canadians this year. We've enhanced the Canada workers benefit and we're cutting child care fees in half by the end of the year. In July we increased OAS by 10% for seniors 75 and older, and we doubled Canada's student grants until July 2023.
Mr. Chair, our plan is targeted, fiscally responsible, and supports the most vulnerable Canadians: our lowest-paid workers; low-income renters; families who can’t afford to have their kids see a dentist. And we are doing it in a way that will not pour unnecessary fuel on the fire and allow inflation to become entrenched— something that would make life more expensive for everyone for years to come.
But we cannot compensate every single Canadian for rising costs driven by a global pandemic and by Putin’s invasion of Ukraine. To do so would only make inflation worse. Canadians are smart, and I know they understand that.
And so as Canadians cut back on costs, so, too, will our government. We will do our part to not pour fuel on the fire.
We committed to a $9-billion cut in government spending in our spring budget. Canada does have the lowest deficit this year in the G7. We have the lowest net debt-to-GDP ratio in the G7. Our AAA credit rating was reaffirmed this year by Moody's, S&P and DBRS, and our new targeted inflation relief measures have an incremental cost of just 0.1% per cent of Canada's GDP, an incremental cost of $3.1 billion.
This legislation is about finding a balance between compassion and fiscal responsibility. This support is the right thing to provide to Canadians now, when they need it. Canada can afford to be compassionate to the most vulnerable among us, and we will be.
I'm happy to take your questions now.
As you said, Mr. Chair, we have finance department officials here who can answer questions too.
View Peter Fonseca Profile
Lib. (ON)
Thank you, Minister, for those opening remarks.
We are going to start with our first round of questions. We're starting with the Conservatives. They have the floor for six minutes.
Go ahead, MP Albas.
View Dan Albas Profile
CPC (BC)
Thank you, Mr. Chair. Thank you, Minister, for being here today.
Minister, are you aware that the finance department is currently conducting an inflation study?
View Chrystia Freeland Profile
Lib. (ON)
Finance conducts many studies, and of course it's important for them to be looking at inflation—
View Dan Albas Profile
CPC (BC)
The finance committee is conducting one.
View Chrystia Freeland Profile
Lib. (ON)
Oh, the finance committee. Sure. Of course I am.
View Dan Albas Profile
CPC (BC)
You know that we have been eager to have you come before finance committee, as was laid out in the motion, to come and have a deep dive into inflation. Are you aware of that?
View Chrystia Freeland Profile
Lib. (ON)
I am glad to be with you here today and dive into anything you'd like to talk about.
View Dan Albas Profile
CPC (BC)
It's curious, Minister, that you only seem to want to show up here when you're asking for $2.6 billion in taxpayers' money. It's just odd that you would only come for that. I do hope you will be coming back for the full inflation study, because I think there are a lot of issues outside BillC-30 that we need to have a discussion on.
Minister, given the hard work that should have been done over the summer, there's been a lot of criticism about the spending of this government, particularly from a macroeconomic viewpoint. You alluded to this in your own opening comments about adding fuel to the fire.
In chapter 9 of your own budget 2022, you talked about a pause on certain spending of up to $3 billion, as well as a strategic policy review by Treasury Board.
Why, Minister, did you not use the summer to say that we're going to be giving more supports to Canadians through GST tax relief but at the same time shelving or postponing or stopping spending so that you would lessen the issue of inflation? Why did you not do that work?
View Chrystia Freeland Profile
Lib. (ON)
Mr. Albas, I think that is exactly what our government is doing.
As I said in my remarks, our government believes that today we need to find a balance. The balance needs to be between providing targeted support to the most vulnerable Canadians who need it while maintaining real fiscal responsibility.
I think the support we're talking about today, the GST tax credit, is actually support that everyone around this table agrees is the right thing to do. It's exactly what the IMF is recommending. It's targeted, it's focused, it reaches the people who need it the most, and we have really been careful to keep an eye on spending. We recognize that now is the time for fiscal responsibility. The budget in the spring was fiscally responsible. As I said in my opening remarks, Canada today not only has the lowest debt-to-GDP ratio in the G7 but also the lowest deficit in the G7. We are finding that balance, and I look forward to getting support from all members of the House for that balanced approach.
View Dan Albas Profile
CPC (BC)
Minister, a balanced approach would mean that as you offer something, in this case targeted tax relief, you would also then correspondingly make sure there are cuts. That isn't the case. Since you're so much about fiscal responsibility, Minister, maybe you could tell us when you believe the budget will be balanced.
View Chrystia Freeland Profile
Lib. (ON)
Again, as I said in my opening remarks, we are taking clear steps to show fiscal responsibility. One of those steps is a really responsible budget that we tabled in April. Let me really underscore that it's the lowest deficit in the G7. It does include a $9-billion cut to government spending.
I know that Canadians right now are having to make careful choices in their household budgets, and I think it's quite reasonable of them to expect the same careful management by the government of the country's finances. That is exactly the approach we're taking.
View Dan Albas Profile
CPC (BC)
Most families, when they balance their own budget, know when they will come back into balance, Minister. I really would hope that you would start doing the hard work, because both Conservative and Liberal ministers of finance have worked very hard in the past to come to the Commons with a balanced budget, and if you can't even give us a date, that's says to me that it's still just talk.
Let's talk about Bill C-30 as it is.
This one-time help, which Conservatives do support, is welcome relief for families. As you said, it's about $467 of support through this bill. Now, contrast that with the fact that the average family of four is now spending over $1,200 more each year to put food on the table, and that's not to mention the rising costs of heat, gasoline and rent. Do you acknowledge, Minister, that this bill is not enough to fill that shortfall for these Canadians who would be targeted by Bill C-30?
View Chrystia Freeland Profile
Lib. (ON)
Mr. Albas, as I said in my opening remarks, the careful balance that the government must find right now as Canadians grapple with inflation and as the Bank of Canada fights inflation is quite different from what we needed to do when COVID hit and we had to shut down the economy.
When COVID hit, we said—we as a country decided—that we were going to close things down to save lives, and we did save lives. A study over the summer led by David Naylor showed that 70,000 additional Canadians would have died had we suffered U.S. levels of mortality. We did the right thing, but we actually all collectively said—
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