THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, June 3, 2026
The Standing Senate Committee on National Finance met this day at 6:46 p.m. [ET] to study the subject matter of Bill C-30, An Act to implement certain provisions of the Spring Economic Update tabled in Parliament on April 28, 2026; and, in camera, for the consideration of a draft report.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: Honourable senators, today we’re continuing our study on the subject matter of Bill C-30, An Act to implement certain provisions of the Spring Economic Update tabled in Parliament on April 28, 2026.
I would like to welcome all the senators, the minister and his officials and all Canadians tuning in on sencanada.ca.
My name is Claude Carignan. I’m a senator from Quebec and the chair of the Standing Senate Committee on National Finance.
I would now like to ask my colleagues to introduce themselves.
Senator Forest: Good evening. Éric Forest, independent senator from the Gulf division, Quebec.
[English]
Senator Pupatello: Sandra Pupatello, an Ontario senator.
[Translation]
Senator Gignac: Welcome, minister. Clément Gignac from Quebec.
Senator Galvez: Rosa Galvez from Quebec.
Senator Dalphond: Pierre Dalphond, De Lorimier division, Quebec.
Senator Cardozo: Andrew Cardozo from Ontario.
Senator Oudar: Welcome, minister. Manuelle Oudar from Quebec.
Senator Robinson: Good evening. Mary Robinson from Prince Edward Island.
[English]
Senator Ross: Welcome. Krista Ross, New Brunswick.
Senator MacAdam: Welcome. Jane MacAdam, Prince Edward Island.
[Translation]
The Chair: Thank you, honourable senators.
For our first panel today, we’re pleased to welcome the Honourable François-Philippe Champagne, P.C., M.P., Minister of Finance and National Revenue. He’s joined by officials from the Department of Finance. These officials are Maude Lavoie, Assistant Deputy Minister, Tax Policy Branch; and Evelyn Dancey, Assistant Deputy Minister, Economic, Fiscal and Intergovernmental Policy Branch.
Welcome and thank you for accepting our invitation to appear today.
The minister will now have four to five minutes for his opening remarks. We’ll then open the floor to questions.
The Honourable François-Philippe Champagne, P.C., M.P., Minister of Finance and National Revenue: Thank you, honourable senators. I’m pleased to be here this evening. It’s always a pleasure to come to the Senate. I would also like to thank you for your important work.
I would also like to thank my colleagues, Evelyn Dancey and Maude Lavoie. They’re two exceptional colleagues, Mr. Chair. The people before you, to my left and right, are leading experts in the field of finance. It’s a pleasure to work with them.
[English]
Senators, I would like to thank you for giving me the opportunity to speak to the Spring Economic Update and Bill C-30, An Act to implement certain provisions of the spring economic update tabled in Parliament on April 28, 2026. The fact that this committee has decided to conduct a pre-study of Bill C-30 shows that you understand the urgency of this moment in our nation’s history and the need to review and consider this important legislation in a timely and serious manner. This is what Canadians expect of us, and I thank you for your leadership and your time to consider this important measure.
Senators, if nothing else, the past few months have revealed that Canadians across the country are navigating a rapidly evolving world, driven by escalating conflicts and trade tensions, which have translated into affordability challenges for many Canadians. I am happy to expand on that, if you want, during your questions. We just returned from the G7 meeting in Paris with central bank governors and international institutions, and I’m happy to give you a read out of the macroeconomic situation we see around the world.
[Translation]
Mr. Chair, the response to the Spring Economic Update reflected the progress that we’ve already made and the importance of the work that remains.
Our mission is to build a strong Canada while ensuring progress and economic growth. This benefits Canadians across the country.
To that end, we’ve given Canadians the chance to take part in building our economy with the establishment of Canada’s first national sovereign wealth fund; created new opportunities for around 80,000 to 100,000 young Canadians to help build their country with the launch of the Team Canada Strong initiative; and made historic investments in community safety, Canadian sports and small craft harbours, which will be of interest to my Atlantic colleagues.
While Canada certainly isn’t immune to global economic turmoil, our government is focusing on what it can and does control. Of course, we’re acting accordingly. We’re working on building a strong economy, diversifying our trading partners, ensuring sound and rigorous fiscal management and helping Canadians cope with the costs of housing, groceries and gasoline.
I’m convinced that Bill C-30 is key to achieving these goals. It gives us the ability to operate despite the complex and volatile geopolitical and economic environment.
[English]
Mr. Chair, in recognition of the steep price increase at the pump due to the war in the Middle East, Bill C-30 would temporarily suspend the federal fuel excise tax on gasoline and diesel across Canada, saving drivers 10 cents per litre on gas and 4 cents per litre on diesel from April 20, 2026, until and including September 7, 2026.
It will also suspend the excise tax on aviation fuels for the same period. That will ensure that Canadians receive immediate, tangible affordability relief when they need it most.
Bill C-30 also proposes to maintain, for an additional two years, the 2% cap on the inflation adjustment for excise duties for beer, spirits and wine. It also proposes to continue the temporary 50% reduction in excise tax duty rates on the first 15,000 hectolitres of beer, which have been brewed in Canada, for an additional two years. Combined, these two measures would provide over $30 million in relief to the sector until 2028, with nearly 1,200 small and independent craft breweries and brew pubs across Canada, representing thousands of jobs across the country during a charged, sporting summer. This represents welcome measures for a number of people who, hopefully, are watching us tonight.
Mr. Chair, Canada’s housing affordability challenges remain a real concern and continue to lock potential buyers out of the market. Bill C-30 would extend the grace period during which homeowners are not required to start to repay their homebuyers’ plan withdrawals from their RRSP for two years to five years for participants making a first withdrawal between January 1, 2026, and December 31, 2028.
This will provide up to $4,000 in relief per individual, per year for three years, over which they are not required to repay the amount into their RRSP. This allows new buyers to focus entirely on other living expenses in their first few years of home ownership.
This adds to the myriad of other measures and policies that we have introduced to take aim at housing supply and affordability across our country and speaks to the leadership and our role that the government has taken to support home buyers and renters with our partners in the provinces and territories to make affordability a reality for many more families across the nation.
Bill C-30 includes an important change to the Canada Pension Plan, reducing the contribution rate on the base CPP from 9.9% to 9.5% effective January 1, 2027. This will translate into annual savings of about $133 for an employee earning $70,000 a year, with equivalent savings for their employer, all while maintaining existing returns.
I’m pleased to say, Mr. Chair — as you would appreciate in the way our federation works — this was unanimously supported by all of the Canadian provinces as well when I raised that at the last federal-provincial-territorial meeting. This is how Canada works best when we work together, with unanimous support and consent from my provincial colleagues.
Bill C-30 bridged the long-term building imperative of this government by supporting the Red Seal and other skilled workers to a series of proposed enhancements to the labour mobility deduction, which would allow eligible trade people to deduct more of their travels and accommodation costs when they take temporary jobs far from home, something I’m sure senators will have heard. Obviously, we want to encourage trades people and Red Seal certification, as we have ambitious plans to build this country.
Mr. Chair, I can see you looking at me. There are more measures in Bill C-30. I’m sure that senators will have seen it. Let me mention greenhouse houses as well to support domestic food production. We included measures to support that.
In conclusion, let’s seize the moment, be ambitious and with your help, build Canada strong at a time when we need it. Thank you.
[Translation]
The Chair: Thank you, minister. As I always say, my job is to chair the meeting, not to be the timekeeper. So I try to give everyone a chance to speak, but within a set time frame. Thank you.
Senator Forest: Thank you for joining us this evening, minister.
My first question concerns microbreweries. From the start, we wanted microbreweries to become a major part of our tourism industry. In Canada, and particularly in Quebec, a whole network of microbreweries has sprung up. In recent years, things have become more difficult for them.
Why renew this measure on a temporary rather than a permanent basis, to give our microbreweries some breathing room?
Mr. Champagne: Thank you for the question, senator.
You’re right. Microbreweries have taken off in the regions. You know, I’m originally from Shawinigan. In the different regions of Quebec and across the country, a large network of microbreweries has really sprung up. There are more and more producers.
The caucus, at least, was heavily involved in this measure. We decided to implement it for two years. I think that it provides the predictability that microbreweries need.
For the purposes of sound fiscal management, my role as finance minister is to ensure this certainty and predictability, while maintaining the leeway to adapt the fiscal framework to changing circumstances. As I said at the outset this evening, the reality is that we live in a world . . . . When I was chair of the G7 finance ministers, we talked about uncertainty in 2025. Yet 2026 is the year of volatility and complexity. The world is changing fast.
This targeted measure provides the predictability needed to support regional players. It gives them the vital help needed to tackle the busy summer ahead, marked by a number of nationwide sporting events.
Senator Forest: Thank you.
I’ll now introduce a topic that doesn’t necessarily fall within your sphere. However, I fully trust that you’ll be able to reassure me.
There are 11 regional airports owned by the federal government, but operated by municipalities. I encountered this situation in Rimouski back in the day with the Mont-Joli airport. An intermunicipal board currently manages the airport. The board must battle with NAV CANADA to maintain services. The airports are truly major tools. They attract tourists and diversify our economy.
The department is currently telling us that it wants to carry out audits. Is the goal to give these airports back to the various communities? The municipalities don’t have the resources and financial structure to ensure sound development and to maintain attractive airports. For example, when Air Canada stops serving a region, such as Bas-Saint-Laurent and Gaspésie, we unfortunately see that this compromises the attractiveness of the region for workers and tourists alike. Is there a certain awareness of the reality of regional airports?
Mr. Champagne: First, I would like to acknowledge the work that you carried out as mayor at the time.
You’re right. In our regions, airports are drivers of regional economic development. As you said, and as I often say, airports and ports are part of the ecosystem that supports not only recreational and tourism development, but also the regional economy. This is especially true given my own experience, which is a bit like yours, but from another perspective. For example, when we travel to Saguenay with all the workers, the activities of these big corporations and the service to the region play a crucial role. We’ve even had to take action in this area. These challenges can drive growth as much as impede it.
We set out in the bill how to obtain the information. We’re looking at how to modernize public infrastructure. When we look at our partners in the G7 or Australia, we see that the approach to building, maintaining and owning certain public assets has changed. Different models are available today.
Without prejudice to our findings, we want to gather the information that we need to conduct an in-depth analysis, assess the overall situation and determine what serves the best interests of Canadians. The goal is to improve services, optimize service in certain regions and, where appropriate, build partnerships with the public to preserve core assets such as airports.
Senator Forest: It would be worth seeing [Technical difficulties] municipalities that have been through this transfer to know the reality in which . . . . There’s good expertise to look into.
[English]
Senator Cardozo: Minister, welcome. Thank you for being with us. Congratulations on your Spring Economic Update.
I want to continue a discussion we’ve had before, which is on youth unemployment. You are well aware that the youth unemployment rate is at about 14%, double that of the population at large.
I want to congratulate you on a couple of items in the update and in the bill, such as the new money for building trades, which you referred to a few minutes ago, and the climate corps. These are really important. When I look at some of the big items that you and the Prime Minister have announced over the last year, they are big items where I think that you are correctly reorganizing and refocusing the economy. Some of these things will not have an immediate impact on young people.
My concern of late is a new political dynamic; namely, national unity. If there are young people in certain parts of the country who face a referendum, and if they lose confidence in Canada, they may not vote for Canada. I want to think about them as well.
I have two requests. One is, a few other senators and myself, such as Senators Katherine Hay and Farah Mohamed, would like to work with you and your department on this issue, short and long term. I hope that you will be open to engaging with us.
The other is with regard to the Canada Summer Jobs program. It is an idea that comes from the Canadian Federation of Independent Business, or CFIB, which is to have that year-round, so Canada fall jobs and winter jobs. You have a well-organized process for getting applications and having the money go out to all regions of the country, all ridings and with all MPs. I think you would have unanimous agreement that this would be good. The only thing that you need is a bit of money.
It’s one way to do something that will have immediate effect. If you put that into effect in the fall, not as big as the summer program but perhaps more targeted, and also not focused just on students because we have 400,000 young people who are not involved in the education system. I leave those two ideas for you.
I’m not looking for a “yes” or a “no” on the latter one, but please consider that.
Mr. Champagne: I have had these questions from time to time, where they ask me for a “yes” or a “no,” but I would like to expand because that is how you can provide a more fulsome answer.
I want to say, senator, thank you for focusing on youth. That has been the focus. As you said, when we introduced Canada Strong, we did not go incrementally. We built something. If you recall the words of the Prime Minister and myself when I presented the Spring Economic Update, we talked about all for Canada and a Canada for all. All for Canada was really to engage youth across the country.
We’re going to build this country at a speed and scale not seen in generations. You have seen, for example, the plan we put into Budget 2025. I’ve said to my G7 colleagues, if you compare that to the largest plan, which is the German infrastructure fund at €500 billion over 12 years, the Canadian plan, on a cash basis, is $450 billion over five years. One would argue that we have the largest infrastructure plan of the G7 countries, and, therefore, we need the people.
That’s why we focus on youth. It’s all good that we are here sitting in Ottawa with senators and members of Parliament. It’s fine for us to say that is what we want to do, but it will only be accomplished if everyone joins in. It’s the same thing with the sovereign wealth fund we created. We wanted to ensure people can also participate in these projects of national interest.
In terms of your suggestion with respect to the Canada Summer Jobs program, I can tell you, as a member of Parliament, it is, as you said, very significant in every part of the country. If I look at my personal experience, it allows us to provide support to a number of non-profit organizations that do remarkable work. Without the Canada Summer Jobs program, I’m afraid there would be many kids who would not have summer camp. Many organizations could not really operate on the same scale and offer the same services.
I take your point. It has been mentioned to me a number of times. It’s certainly something that I am happy to reflect on, senator.
I hope you can see that, with the Canada Strong platform, we said we are going to train, retain and provide a path to employment for 80,000 to 100,000 young people, which I think is a remarkable goal. This is not incremental. As much as we said we made a generational investment in Budget 2025, I would say this is a generational investment into future generations who are going to help us build this country.
Senator Ross: Thank you for being with us this evening, minister.
I’m interested in talking about airports and the amendments to the Canada Transportation Act that are in here. Mostly, it’s talking about being able to get additional information from the airports.
Could you expand on that a bit? Given that most of the airports are already providing their audited financial statements, projections and all of those pieces of information, what is it that you are looking for specifically?
Second, when I read the Spring Economic Update, it talked about the idea of a possible transfer of ownership for airports. I wonder how the government has engaged with airport authorities on this potential change. How has that happened, or when will it happen?
Mr. Champagne: Thank you, senator, for your question.
When it comes to obtaining information, it’s step one in the process. We wanted to have a uniform process and framework in order to be at par everywhere. I would say, depending on the airport, the level of information we have received over time has varied. It was good to have national standards to say we will allow the government to have the relevant information. I think that is how you make the best decision, when you have all of the facts, figures and, as you say, projections in order to allow us to do the proper due diligence. We are approaching that on a step-by-step basis. We are not prejudging the conclusion. Let’s have the information, allow us to see the picture and see how we can maximize value for Canadians.
At the end of the day, what Canadians want are good services, modern infrastructure and having these airports, which, as the senator said, are gateways to economic growth in every region of the country. We have a vast country.
In my own words, I would say it’s modernizing our thinking about public assets. When I engage with colleagues around the world, the way we have done so in Canada has not evolved very much for a long time, I would say. In terms of the way we own, operate, build and manage, the taxpayer is pretty much shouldering those responsibilities.
There are different models we have looked at around the world; for example, in the Nordic countries, Europe and Australia. The first step in our approach is to get the relevant information so we can make an informed decision and see what the best value for taxpayers is in terms of their needs. At the end of the day, there are limited resources, like everywhere. The fact is, how do you get maximum value from these assets for Canadians so that you have resources that could also potentially be invested in other things that Canadians care about?
Senator Ross: I have another question that is completely different. It is in regard to Bill C-30 and Bill C-31 being introduced only a week apart and having quite a lot of overlapping legislation. For example, Part 3 of Division 3, relating to the Payments Act, makes changes to immunized payments in Canada against civil liability. Then, Bill C-31 extends immunity further to other government departments.
There are changes to the Pest Control Act in Part 3 of Divisions 7 and 8 in Bill C-30 and then in Part 4 of Division 13 in Bill C-31. They were only tabled a week apart. I wonder why these changes couldn’t have been made at the same time. If they fit together under the same policy objectives, it makes it hard to sometimes track programs, spending and regulatory changes when it’s in multiple pieces of legislation. Given, they were so close together, could they not have been in the same piece of legislation?
Mr. Champagne: I take your point, senator.
We endeavour to do our very best. Sometimes, legislation is introduced, and the schedule in the House is not always entirely predictable. But your point about trying to make sure we consider elements that would cover the same topic in one bill as opposed to two bills — I take your point on this.
We will certainly do our best to ensure that is the case and that we always consider that. I appreciate your thinking and concern. It’s easier if you have it in one bill.
Having sat in the other house for more than a decade, I know that the scheduling and time in the House are not very predictable as to how these will come out. They happen to have come out at this kind of short notice between the two, but your fundamental point about trying to have all the provisions with respect to one bill in one place, I hear you. We’ll certainly do our best.
Senator Robinson: I wanted to start by saying that, in 2017, we had a report from Dominic Barton that was incredibly well received by the agricultural sector. I have to say hearing our Prime Minister talk about Canada as an agricultural superpower — we’re hearing incredibly positive comments from both the primary and value-add industries. I just wanted to say thank you, and keep that up.
Division 8 of Bill C-30 amends the Pest Control Products Act in two ways. The first adds food security and economic security to the mandate of the Pesticides Regulatory Directorate, or PRD. The second deals with emergency orders.
My question is on the second part, but before I get into it, I want to make sure I understand this correctly. Right now, the Pest Control Products Act contains powers for the minister to deny an application to register a pest-control product if they do not consider the health or environmental risks of the product to be acceptable. Bill C-30 under Division 8 gives the Governor-in-Council the power to permit the use of a pest-control product whose application was previously denied by the minister to control “seriously detrimental infestation,” if the Governor-in-Council considers it necessary to do so to protect national economic security, regional economic security or national food security.
Do I have that right?
Mr. Champagne: I will comment on your first point, senator, about the national food strategy that we have put as well.
I’ll come to your question more specifically, but, first, you and Canadians will be interested to hear that, today, when I came back from the G7, the nexus between food security, energy security, economic security and national security has never been closer. You look at the Strait of Hormuz, and I can tell you that Canada played a role in putting that. I was concerned about the unknown and the secondary impact. Here you go: The issue of fertilizers.
You have an energy crisis that is turning, in many parts of the world, potentially into a food crisis — these things being connected — and the role that Canada can play more broadly in terms of being a food superpower and providing that kind of stability and predictability that partners around the world —
It was the same thing with energy. It’s quite interesting that people in P.E.I. would be interested to hear that, but in parallel with a discussion we have on energy security, we talk about food security — the fertilizers and ilium that go into semiconductors. I wanted to put that in context.
To your point, why we needed to amend that goes back to the issue of national and regional economic security and national food security — those are, I would say, exceptional powers that we need to provide in cases where the minister needs to make a quick, informed decision in order to protect regional economic security or national food security. I say that because we live in a world where Canada is not immune to what is happening in other parts of the world. We’ve seen with different — the spread of diseases, for example. We’ve seen that with COVID and others. We are seeing that now.
As minister — and I’ve been a minister of the Crown for a bit of time — a lot of our enabling legislation did not consider the world we live in today. We are now in a position where we need to update the number of acts to take into account economic security, national security and food security, because the kind of world that we live in requires government ministers — in some instances, exceptional as they may be — to react quickly in order to protect security and national food security.
Senator Robinson: I wanted to go further.
There are certain limitations placed on these emergency orders, one of them being that an emergency order can only be applied to a pest-control product whose application has been denied for up to one year. This is the sunset provision detailed in section 8.5. It’s that part I’m having difficulty with.
First, why is there the one-year limit? Was it industry; was industry consulted on this? Where did the number come from?
Second, how does this apply regionally across Canada? If the application of a pest-control product has been denied in one region but approved in another for use, would the emergency order be regionally specific, nationally specific, commodity specific, et cetera? How would we know where the decision came from? These orders would not be subject to the Statutory Instruments Act, so where will we see what science was used to back up the emergency order?
Mr. Champagne: I’m not sure how to answer that question. I’m used to the 30-second question-and-answer period, but I’m afraid not to do that to the senator’s question.
How much time do I have?
[Translation]
The Chair: You have 30 seconds if we want to be fair.
[English]
Mr. Champagne: Let me do my best — I’m not sure I’ll succeed — to cover all of that.
We put a number of guardrails in because these are exceptional powers to deal with emergency situations. There have been consultations with industry and in the House, as well. The guardrails have been put in place because I think the House and the Senate would want to make sure that, if there are extraordinary powers, there are a number of guardrails that have been put in place in order to make sure that these exceptional powers are used in a time-limited fashion to deal with a situation at hand. But I’m sure that if you want a more comprehensive answer — because I look at the chair looking at me — we can provide you with additional details. We can certainly ask the Department of Agriculture, for example, to provide a more fulsome response.
[Translation]
The Chair: We would appreciate it, since this is an important issue. Thank you.
Senator Oudar: That’s good timing. I’ll continue along the same lines, but on the topic of human health.
In recent years, as president of the CNESST, I had to work on the impact of pesticides on human health, particularly on the health of farm workers. I have a few concerns to share with you.
True, it’s a system that functions by exception. I readily acknowledge the importance of food safety and the economic realities. However, the legislation states that this system that functions by exception can last up to three years and can be renewed for a further three years. So we’re talking about a six-year system that functions by exception. When an order-in-council of this nature is issued, it isn’t subject to the Statutory Instruments Act. There isn’t any prepublication. A number of systems that function by exception come one on top of the other.
I would like you to talk about your assessment of human health in terms of the health of workers and also the health of the subsequent consumers of these products.
Mr. Champagne: First, thank you, senator. You obviously have a wealth of experience that enables you to make judgments. Let me speak in general terms, and then I’ll get to your question.
As I said in a previous response, we’re giving ourselves certain powers to deal with this reality.
Animal and human health overlap to a certain extent. In recent years, we’ve seen an increase in viral crises and public health issues. This means that we must be able to pre-emptively invoke exceptional powers to deal with these situations on a targeted and temporary basis, as you said, while continuing to ensure the health of the public.
Human health is the first issue that we want to protect. This desire for power is to protect human health first and foremost. We’re looking at the situation with Ebola right now.
We all went through COVID-19. We’ve seen how quickly things evolve, often exponentially. I was Minister of Foreign Affairs at the time. Some of these developments weren’t linear, but exponential. This calls for quick adjustments and actions to protect human health. For the minister responsible, we must protect human health and give ourselves the powers to deal with situations that may even be difficult to imagine today.
We saw how quickly the COVID-19 pandemic affected the whole planet. Various parts of the world are currently dealing with the issues surrounding Ebola. This calls for caution. I see this as a preventive measure to protect human health. As a minister, I’ve often found that our enabling legislation fails to take into account economic security and national security. Today, all these things are coming together. When an issue arises, it often affects other aspects of life where we lack the legislative provisions to act in the public interest. This measure gives us that power.
Senator Oudar: Thank you for your response. That’s reassuring. We can also assume that regular reassessments will be mandatory during these six years, in order to decide whether to maintain the order-in-council for exceptional powers. These are the administrative powers that the minister could acquire.
You said that Canada could be a food superpower. I fully support this. I agree with you wholeheartedly. However, I would like to draw your attention to the fact that, of the hundred or so pesticides used in Canada, some are banned on the European market. This would prevent you from exporting certain products on which these pesticides are used. These exceptions should be carefully reviewed. They could dash your hopes of Canada becoming this food superpower.
The Chair: I would like to pick up on this.
I’ve asked my team to do some research, but I don’t have any results yet. I can see that the new Carney government has implemented multiple pieces of legislation that give ministers enabling authorities to issue orders-in-council concerning sandboxes or other matters. The increasing number of orders-in-council gives the impression that the government is shifting towards governance by order-in-council. Is this an admission of the failure of the previous legislative process, or is this a desire on the part of the new government, as you call it, to shift towards a government that will issue more orders-in-council?
Mr. Champagne: Mr. Chair, I think that this speaks to what we’re seeing right now. I often say that the world is changing at an unprecedented speed. The scope, scale and nature of the changes are striking, including in the areas of geopolitics, geo-economics, supply chains, technology, quantum, artificial intelligence and cybersecurity. There are many things. Some people say that it’s a bit like the situation after 1945. Others say that it’s like the situation after the fall of the Berlin Wall. We’re living in an era of humanity where a number of things are changing. We need to modernize some of our enabling legislation. We need to acquire tools that will enable us to respond.
To get back to my point: There is a nexus between food, energy, economic and national security. Let me give you an example. When I was Minister of Foreign Affairs, many of our discussions at the G7 focused on national security. As Minister of Finance, most of our meetings address issues that will impact national security. Current challenges have become technological, geopolitical and geo-economic due to the rapid pace of change. Many things are changing simultaneously. It is true that we must modernize certain tools in our tool box to be able to respond in a way that protects the public interest. Faced with the unprecedented speed, volatility and complexity observed in 2026, I believe Canadians understand the need to equip themselves with tools to protect the public interest and national security.
Senator Galvez: Thank you very much. This reminds me of the courses I taught on energy, the environment, the economy and employment.
Even though omnibus bills are not very popular in the Senate — since they cover so many areas — they contain numerous non-budgetary provisions. The only thing I like about them is that they allow me to see all the issues subject to changes.
[English]
I want to talk about three provisions. The one about asking information from airports in order to explore the possibility much of selling them, despite the fact that I think there are so many other ways that you can bring money in because you lease the land, and you can increase or decrease that depending on what you want to do. I think that airports, ports and any transport infrastructure belong to a national building strategy. So I wonder why you are thinking about selling the airports.
With respect to pesticides, I agree with everything that Senator Oudar has said. In looking at how restrictive other jurisdictions are to which we want to sell our agriculture products, we know that the whole of Europe, but also Denmark, Sweden, Norway, Switzerland and Japan, are stricter and have banned several pesticides. This arrangement to allow more pesticides, especially glyphosate, is only going to please the U.S., which is permissive, and extra-permissive Mexico; but our wish to expand to other markets will be a problem.
My last point is about the excise fuel tax. I know that Prime Minister Carney has said we are committed to net zero by 2050. I hear in the news people are saying we’re rolling back the legislation, but you’re saying, “No, we are not rolling back legislation. We are changing.” I want to know if there is some modelling that will reassure people that with the new measures you are including, we will get to net zero by 2050.
[Translation]
Mr. Champagne: I will start with your last question on the suspension of the excise tax.
[English]
It is a targeted and temporary measure. If you and I go for a walk tonight in the streets, what’s top of mind for people is affordability. Now we see that the energy crisis in the Middle East is translating into an affordability issue in many parts of the world.
I hate to always refer to the G7, but to give you context, when we were together — I keep saying the three things that people talk about in every country of the G7 are the price of rent, food and gas. In Canada, the fiscal capacity to say — of the $7 billion in additional revenue we have, two thirds of that went back to people. We understand that a lot of people are concerned by the end of the week and the end of the month. People understand the vision of building a stronger, more independent and more resilient country, but there is pressure.
This was our response to say that we understand that families needed a break, especially during the summer, when there is more travel, and that’s our way of responding because we had the fiscal capacity to support people.
[Translation]
On the issue of pesticides, I understand. I was one of the negotiators of the free trade agreement with Europe, so I am familiar with these phytosanitary issues. Our approach differs at times from the European one, but our two approaches should eventually converge. Honestly, I believe we realize that we have strong institutions in place to ensure the health and safety of citizens on both sides of the Atlantic.
[English]
Let me go back to the airport issue to say that we’re doing it in a very structured way. The first thing we do — and I have said it to your colleagues — is to get the information. We’re not prejudging. I had questions about specific airports and regions, and I said, “Listen, let us do the work and analyze what is in the best interests of Canadians, how we can serve them best, how these airports can serve them best and what the efficiencies are that you can find.” It is a part of that thinking, I would say, to modernize our approach in terms of public assets.
It is very structured. We’re consulting and engaging. But this is step one. Step one is to get the information, because not everything is equal. You have to look to see what makes sense. Senator Forest raised a good point: There are different realities in different parts of the country.
The background to that, I would say, is that what Canadians want is good service. What Canadians want is more infrastructure. What Canadians want is to ensure that they have the best value for their money. In the end, these assets belong to the government now, but there might be different ways to look at that and to see how you can derive the best value for Canadians while providing the best services to them.
[Translation]
Senator Gignac: Welcome, minister, and thank you for the work you and your colleagues are doing to make this economy more resilient in a rapidly changing geopolitical world.
I have two questions. The first concerns this temporary reduction of the excise tax. It amounts to $2.4 billion and is one of the most significant measures in your economic update.
We met with the Parliamentary Budget Officer, and there was a discussion about studies showing that temporary reductions are often associated with an increase in corporate profit margins. Canadians can certainly see this at the pump, but it’s not so clear given all the volatility surrounding the events in the Strait of Hormuz.
I know your department has all the information, since you know the cost of refining and the producers’ costs. In the interest of full transparency, after September 7 or in the weeks thereafter, could you share your post-mortem analysis with the committee? We would like to know whether the entire reduction was passed on to consumers or whether a significant portion of it went toward increasing profit margins.
We cannot have the answer today, but I believe your department or Natural Resources Canada has all the information we need to learn from this. After all, this represents a shortfall of $2.4 billion for the public treasury.
Mr. Champagne: On that note, I would say that this is why we asked the Competition Bureau to keep an eye on this matter.
As you know, we have proposed a targeted temporary measure. This is in line with what the International Monetary Fund has advised various countries. According to the IMF, governments with tax room can implement targeted and temporary assistance to support families. These affordability measures are fully justified during this time of need.
As soon as the measure was implemented, we saw that people felt the difference at the pump. However, as you mentioned, we live in a world where oil price volatility is unprecedented. Fatih Birol, the executive director of the International Energy Agency, told me that this is the worst energy crisis humanity has ever faced. That is true. We are pleased to contribute.
The cost at the pump includes provincial taxes and refining costs. Several factors influence this price. We worked together, and we had already done so with the consumer carbon tax of $0.18. We did everything then that we could to help people at this time.
I see you have another question.
Senator Gignac: Thank you. We would like to follow up on this.
The second question is of a macroeconomic nature. You rightly point out in your document that direct investment in Canada reached a 20-year high. I had the opportunity to sponsor your bill on the Investment Canada Act. This is therefore an issue I am following closely.
As the C.D. Howe Institute has pointed out, Canada’s low rate of investment per worker in machinery and equipment, compared to other OECD countries — particularly the United States — makes Canada look bad. Businesses are hesitant in the face of uncertainty.
Is it your intention to extend the productivity superdeduction beyond manufacturing, such as to the transportation sector? Is this a measure you might consider in your next budget? In my opinion, the problem stems from the fact that businesses are not investing enough in Canada.
Mr. Champagne: You are an economist, so you know these things. I think you have made a very insightful observation.
According to the latest Statistics Canada reports, you have surely noticed this interesting data point: There has been an increase in investment in machinery, equipment and technology — what is known as intellectual property. So, I dare to believe that the measures we have put in place are bearing fruit, as we are seeing an increase in investment in key areas for productivity and innovation in the country.
We are constantly looking at what we can do. I say this wherever I can, but you know this already: When you look at the tax rate for new investments in Canada, Canada is the most competitive of the G7 countries. Regarding the well-known metric people look at, our effective marginal tax rate is 3% lower than that of the United States, making Canada the most competitive country in the G7.
You have no doubt seen Shell’s investment of approximately $14 billion and Equinor’s investment in the Bay du Nord project. These are major players in the resource and energy sectors, and they are choosing to invest. I believe that what makes Canada quite unique today is trust. That is what investors are seeking: trust, stability, predictability, the rule of law, opportunities and possibilities.
Finally, to quote the International Energy Agency, the global energy ecosystem is being redefined. I was actually in Newfoundland yesterday to attend an energy conference that brought together 700 to 800 people. I mention this because I believe that Canada, with its critical minerals, is positioning itself in the areas of renewable energy, oil, gas and nuclear power. Look at the agreement we signed with Germany. Whether in Asia or Europe, our partners are looking for a reliable long-term partner. Canada certainly offers that reliability. That is why we are seeing these record investments. Canada’s appeal is evident. That is why we are continuing our efforts, notably by organizing the first Canadian Investment Summit, which will be held in Canada in September.
Senator Dalphond: I will continue with Senator Gignac’s question regarding the $0.10 excise tax rebate. A couple of days ago, I was watching people on TV filling up their gas tanks in Montreal, and they said they hadn’t noticed the $0.10 discount. As you said, we saw it at the very beginning, but we did not see it afterward.
At $2.4 billion, this measure represents a rather impressive cost for just four months. Is this the kind of measure you ultimately regret? It did not have the desired impact on the oil crisis. Of course, we cannot predict the future. However, when you’re paying $2.25 to $2.35 a litre to fill up your tank, the fact that it costs $0.10 more or less will not stop you from filling up, because the measure becomes quite insignificant compared to the overall price.
Is granting this kind of temporary reduction a good approach? Senator Gignac explained people’s perception well: People see that companies are raking in more money and that oil companies’ profits and stock prices are on the rise. If consumers filling up their tanks were buying stocks, they might stand to gain, but they are not in that position.
Mr. Champagne: Indeed, and as you said, if we had not taken this step, the price would be even higher. It’s clear, since we reduced it by $0.10, and there was also the $0.18 we removed from the consumer carbon tax.
The people listening to us right now understand the high volatility of oil prices. Indeed, global prices fluctuate. The 30% fluctuations we are seeing right now are unprecedented, at least in the data compiled so far. I look to Senator Gignac, as an economist, when I say that today’s volatility and complexity are at a level almost never seen before. That sets the tone. We are ready to contribute. There may be other levels of government that would like to participate. Other measures can be taken to help people.
Senator Dalphond: Is this measure sufficiently targeted? Some people are willing to pay $2.50 a litre, while others buy large vehicles instead of small ones, or they buy gasoline-powered vehicles instead of electric ones. If we were to set aside that $2.4 billion — we’re talking about nearly $10 billion a year — to develop other, more targeted assistance programs for certain groups of people in need, wouldn’t those be more effective?
Mr. Champagne: This is not unique to Canada: We are seeing it in Europe and elsewhere. People are in transition.
You are talking about hybrid and electric vehicles. We saw that. It’s also part of the discussions at the International Energy Agency — that is, reducing dependence on gasoline. However, these are medium- and long-term measures.
The reality is that we are well aware of what is happening. If, like me, you go out and talk to people on the street, they talk about the affordability of housing, gas and groceries. We contributed because we had the fiscal capacity to do so. Obviously, we received a share of the revenue, so we asked ourselves how we could help people in a targeted and temporary way. That’s what international organizations were saying, “If you do it, do it in a targeted and temporary way.” We created this measure. Everyone wants to end the conflict in the Middle East as quickly as possible.
There are also structural measures. Becoming more independent and resilient, building our energy ecosystem and doubling Canada’s electricity capacity by 2050: these are examples of measures we must implement simultaneously. Households are facing short-term pressure, and structural measures have been taken that will allow us to be less dependent. However, it will take more time. I understand.
A new grocery measure will be announced this Friday: 12 million Canadians will receive a rebate for groceries and essential items. This type of measure will help households afford groceries and gas, especially when these programs are combined.
Households see the reality and realize what rent, groceries and gas cost every week or every month. Affordable housing is the cornerstone of affordability, which is why we have put so much effort into it.
Senator Dalphond: Investing $10 billion in affordable housing and gas tax credits might be a more targeted approach.
Mr. Champagne: I understand, Senator Dalphond. It will take —
Senator Dalphond: I am not the Minister of Finance; you are.
[English]
Senator MacAdam: My first question is, in the report entitled PBO Assessment of Spring Economic Update: Fiscal Anchors and Fiscal Sustainability, the Parliamentary Budget Office notes that the impact of proposed investments depends upon effective implementation and the ability to attract additional private sector investment.
Given these risks, are there plans in place to provide comprehensive reporting on implementation challenges and mitigation strategies? I am thinking in terms of the fiscal anchor. One of them is the net debt-to-GDP ratio. All of these investments are in place, and the plan is to grow the economy with these investments, but net debt is growing with these capital investments. Implementation will be key to keeping these anchors in check, I guess.
In the Spring Economic Update, you did an analysis of the skilled workforce and some of the mitigation strategies that you have put in place. Are there any others in terms of mitigating risks on implementation of these strategies?
Mr. Champagne: As you talk about the Spring Economic Update, the first thing is that we have restored fiscal discipline. Our deficit is $11 billion lower than what was projected, so we have shown Canadians that fiscal discipline is key for me and for the Prime Minister.
We have succeeded in doing that. I go back to the level of uncertainty we are facing today in the world economy. If you look at the World Uncertainty Index of the International Monetary Fund, we are probably at the highest point since the Second World War. This is the environment in which we’re navigating, in an uncertain world, that has been compounded now by a war in the Middle East, which is affecting so many things. We’re talking about food and even, potentially, basic commodities like helium, that could have an impact on semiconductors.
I would say that Canadians have seen that we have been rigorous in our approach. We have also delivered on the savings we identified.
I want to say this because you mentioned the fiscal anchor and Kevin Page. I don’t know if you recall this, but I will quote him:
The hard target of a balanced operating budget in 2028-29 will put more constraints on the government that would fiscal rules tied to changes in the size of the economy . . . .
If you look at the fiscal anchor that we have chosen, the former parliamentary budget officer was very clear that those are very serious fiscal anchors. The good thing is that, if you look at the fiscal track, the fact that we’ve been able to lower the deficit by a significant amount shows you how committed we are to disciplined fiscal management but, at the same time, looking for the savings that Canadians expect.
Canadians have been tightening their belts for quite some time, and I said it’s about time that Ottawa does the same. On the one hand, you have savings. On the other hand, we have been able to reduce direct program expenses that were historically around 8%, down to 2%. So we are doing the hard work and also the investment that will generate growth.
If you look back at the IMF, the IMF said if you invest in housing, infrastructure, productivity and innovation, you will see growth. This morning, you may have seen the OECD projected that Canada will have the second-fastest growth in the G7 for both 2026 and 2027. So I would say our plan is on track. We’re delivering for Canadians at a time of a very complex environment that we have to navigate.
Senator MacAdam: As I understand it:
The government will establish a dedicated Canada Strong Fund Transition Office to lead a targeted engagement with market participants and regulators . . .
They will finalize the details of the fund’s governance, investment mandate and investment retail products. I’m just quoting in part from the Spring Economic Update. Could you provide any specific timelines or key milestones or accountability mechanisms for this work? How will Parliament be kept informed of the progress?
Mr. Champagne: That’s a very good question about the Canada Strong Fund. I don’t know if you saw the international press when we announced it; it was very interesting. They were saying that Canada is establishing its sovereign wealth fund but in a truly Canadian fashion. We will have the only sovereign wealth fund where individual investors can co-invest. That is, I think, a truly Canadian way of doing things.
I like it because it goes back to questions we had before. How do you allow in people who may have a little bit of savings and who say they want to be a part of it? Unless you are a qualified investor, most of these large projects would not be available to you or your family or neighbours. And I think, to allow small investors to say, I might have a bit of money, and I would like to be part of growing this economy, is truly Canadian and very much a testament — as much as we talk about young people, you want to engage Canadians in building this country.
To your point, we said we would be consulting. We announced it before the Spring Economic Update; we provided some elements of a response in the Spring Economic Update. And then we said we would be talking to experts and looking at best practices around the world, with very key principles, arm’s length from the government and independent management. But to be clear, this is something with a mission to support Canadian companies and to support Canadian projects of national interest.
Senator Pupatello: Thank you for being here tonight. I have two questions: the first one is easy, and the second one is a bit of an explanation.
There are a number of tax measures in this bill, and others, where there is a sunset clause. We heard from testimony on this bill that the greenhouse tax credit, for example, is available for a certain amount of time; some people came forward and said, we wish it went on for longer. When we keep extending some credits, at what point do you say, we’re just going to leave it in because we’ve been repeating it for so long, and industry wants to see some certainty. We heard the same with the budgets around tax credits in mining, for example. Is there a period of time where you eventually say, we’ll leave it so they will know that I’m just going to keep doing this investment; I can plan a few years out; that is one.
Two: In the media, and in the House, you’ve been answering questions around the so-called technical recession. There is a description of how they’re making those calculations to suggest changes in trade numbers. For example, changing the formula so that the numbers are not necessarily what we see in the economy. Can you describe how you’re feeling about how we’re doing, generally, in the economy based upon what has been in the media lately?
Mr. Champagne: The question is very interesting because you have been a minister as well and would understand that the time limitation is also because we want investment to happen now. You want to ensure these investments because we want to support them at a time when it is most needed.
You will appreciate that once you give that on a permanent basis, the impetus to invest is there, but the timeline might be different. There is always a reality where you want people to make these investments now or in the short term in order to be able to — if you want to build at the speed and scale we need in the country, these incentives are helping that.
And I would say it is also to meet the moment. If you look at critical minerals, now is the moment. It is not only about exploration and extraction, it’s about refining. How do you encourage these investments to occur as quickly as possible in order to seize the moment?
I will go back, for example, to the energy architecture of the world being redesigned. You want these projects to be announced and go forward now because countries around the world are looking to say, in our discussion with international agencies, they are making decisions now to say who is going to be their trusted partner for energy security, which is national security, for the next two, three decades.
The Strait of Hormuz will find a resolution, but, as far as I know, geography doesn’t change much, and people don’t change that much either, so that will always remain something that people will have to keep an eye on, as we have others.
The Financial Times presented an interesting map of all these straits and choke points in energy, and you look at that and you say, wow, the world might be far more vulnerable than we expected before with what we’re seeing now.
Then you look at countries like Canada, blessed by energy, natural resources and three oceans where we have access to both Europe and Asia at the same time. Obviously, if you’re someone who is looking to diversify, you say, who is the trusted partner of choice? Obviously, Canada is probably top of the list for all of these countries. That is why you have seen so much interest and investment. For example, Germany is signing with Woodfibre LNG on the West Coast and Equinor on the East Coast in Newfoundland and Labrador, saying they will be producing energy. So that’s to your first question: you want to ensure you have the incentives for people to build this ecosystem and these investments.
With respect to your second question, I am very confident in the Canadian economy. The OECD numbers of this morning confirm we are the second fastest growing economy projected for 2026-27. If you look at the numbers in more detail, you have seen an increase in business investment in machinery and equipment; you have seen an increase of business investment in intellectual property; you have seen government spending down. These show me the resiliency of the Canadian economy.
I can tell you both domestically, but around the world, what people are the most impressed about is how the Canadian economy is resilient, despite the fact that we’re not immune to, obviously, the conflict in the Middle East and the tariff situation, where the United States is still our largest trading partner.
If you consider everything, the uncertainty, volatility and complexity for institutions to come and say, despite all of that, Canadian workers, industry and the Canadian economy are very resilient. Because despite this headwind, we’re still the second-fastest-growing economy in the G7, so that’s why I feel confident about the Canadian economy.
[Translation]
The Chair: How do you explain the fact that Canada is in a recession, in spite of everything you just mentioned?
Mr. Champagne: I have confidence in the Canadian economy. As I mentioned, data released this morning by the OECD show that Canada has the second-strongest economic growth among G7 countries, despite a highly volatile global environment.
When we look at the data presented by Statistics Canada, we see the significance of business investments in machinery, equipment, technology and intellectual property — investments combined with a decline in government spending. In my view, these are signs of a resilient economy, and that is what we are seeing, because people expected —
The Chair: We are still in the middle of a recession.
Mr. Champagne: Mr. Chair, I have confidence in the Canadian economy. The Canadian economy is strong and resilient. Canadian industries are as well. Data released this morning by the OECD show that, despite headwinds, complexity, volatility and uncertainty, Canada is faring better than the vast majority of G7 countries.
The Chair: But we are in a recession.
Mr. Champagne: As I mentioned, I have confidence in Canada’s economy, Mr. Chair.
The Chair: You said you never give a yes or no answer, did you not?
Senator Gignac: Mr. Chair, we could have a debate on whether Canada is in a recession or not.
The Chair: No, it’s fine; I was just asking.
Thank you very much for your generosity, minister. We have gone over the time limit, but since you are giving such thorough answers, it is harder to manage the time available. As I said, I enjoy chairing a committee, not just being the timekeeper.
(The committee continued in camera.)