COMMITTEE OF THE WHOLE — Canadian Fuel Affordability Bill

Thank you, Mr. Chair. It’s always a privilege and a pleasure to come to the Senate and appear before you. I’d like to take a moment to thank all senators for the excellent work you do on behalf of Canadians.

Let me begin, Mr. Chair, by extending a special welcome to Senator Martel, Senator Pitfield, Senator Ouellette and Senator Tucker. I’d like to thank all of you for your hard work and for being here with us today.

Over the summer, like all of you, I had the opportunity to meet with Canadians, whether in Charlottetown, Edmonton, Toronto or in my hometown of Shawinigan, and I heard the same thing. I’m sure you had the same opportunity.

Canadians are working hard. They are optimistic about our country’s future, but they are also concerned about the uncertainty we see around us and the impact it can have on the cost of living. Like all of us, they are trying to navigate a rapidly changing world.

For those Canadians, I have a very simple message: We’ll be there for you. Which is why it is an honour for me to participate in today’s debate on the very important Bill C-38, the Canadian fuel affordability act.

Honourable senators, we are faced with a world that is increasingly complex, increasingly volatile and, for many, more costly and unpredictable. The United States is imposing new tariffs on Canada. Ongoing conflicts and disruptions around the world continue to place pressure on energy markets and supply chains here at home and abroad. Canadians feel the impact of those pressures every time they fill up their vehicles, buy groceries or pay their monthly bills.

We can’t control every decision made beyond our borders, but we can control how we respond. Our government’s response is very clear: We are building a stronger, more independent and more affordable Canada.

Due to economic uncertainty and rising costs, affordability is top of mind for families and businesses across the country.

One of our government’s priorities is to help Canadians keep more of their hard-earned money.

As we work tirelessly to build Canada strong for the long term, we are taking action today to help Canadians with meaningful and immediate measures.

Our government is diversifying our trade partners abroad, attracting historic levels of foreign direct investment, delivering responsible fiscal management and supporting Canadians who are under pressure from everyday expenses. There is no doubt that Bill C-38 is a key part of this effort. Bill C-38 is just the latest initiative by our government designed to help Canadians cope with elevated costs of living.

You will recall, honourable senators, that in April of this year, we introduced a temporary suspension of the federal fuel excise tax on gasoline, aviation gasoline, diesel fuel and aviation fuel. This pause reduced the federal fuel excise tax rates to zero cents per litre, and Canadians felt the impact right away, as they should have.

When the suspension came into effect, the price of fuel went down by 11 cents a litre on day one, which proves that the savings were quickly passed on to consumers.

The suspension was supposed to end after Labour Day. Before the deadline, however, our government announced that it would be extending the suspension of the federal fuel excise tax until January 31. Regular rates will then be reduced to 50% through March 31, 2027.

The passage of Bill C-38 will ensure that Canadians get this much-needed relief at the pumps. This measure has already brought down everyday costs for Canadians. It has reduced costs for families, farmers and truckers across our nation. It helps workers who depend on their vehicles and also supports businesses in key sectors, like trucking, agriculture, construction and the food and delivery industries.

The estimated additional financial impact of extending the suspension of the federal fuel excise tax is approximately $2.9 billion. This will mean $5.3 billion in estimated total tax relief for Canadians in 2026 and 2027. This is meaningful support for families, workers, and businesses across our country.

Let me say a few words about Canada’s fiscal responsibility and economic strength. Canada’s economy has remained resilient despite global challenges. Our workers are resilient. Our businesses are resilient. Canada is a resilient country.

As you can appreciate, I have much more to say, but I will conclude by saying that I urge all senators to support the motion that was passed unanimously in the other house and to pass Bill C-38 as quickly as possible.

Thank you, and welcome back to the Senate, minister. It’s always a pleasure.

Thank you, senator.

Minister, suspending a fixed excise tax provides a fixed amount of relief per litre, but because GST is calculated as a percentage of the selling price, as you know, the federal tax collected per litre increases when the underlying price rises.

Has your department estimated the additional net GST revenue contributable to higher diesel prices?

Thank you for the question, senator.

If you are asking me about the cost of this measure, the initial suspension we announced in April cost $2.4 billion in 2026-27. The extension of the suspension represents about $2.9 billion. So if you take the measure in its entirety, it is $5.3 billion.

Senator, this is a very meaningful measure because, as you know, with the price of oil fluctuating significantly in the world markets, we had, indeed, additional revenue. I think it’s fair in a country like Canada to use part of that revenue to support Canadians who need it most.

Thank you, minister, for the answer, but during a time of crisis, I think what Canadians need is to make sure they have more money in their pockets to be able to support themselves. His Majesty’s Loyal Opposition has proposed removing the GST from diesel for the duration of this emergency.

Can you tell the Senate and the Canadian people watching what that proposal would cost? How much would it save households? Why has the government not copied this very good idea? I understand it will cost revenue, but it will directly save taxpayers in terms of keeping more money in their pockets.

Senator, if you look at the work we have done in Canada and compare that with other G7 countries, Canada is top of the class. The International Monetary Fund, or IMF, has been clear about urging members to have targeted, strategic and time-limited measures. Canada is probably the only country in the G7 that I can think of that has the broadest suite of measures to support affordability.

If you look at the affordability pyramid, as I call it, the basis is the cost of rent — finding an affordable and safe house for your family. The second piece is the cost of food, and that’s why we introduced the Canada Groceries and Essentials Benefit. The last one is the price of gas, legislation about which we’re now enacting.

You have to look at this, not as a single measure, but this house should be proud that the members of the other house have recognized that affordability is front and centre in the minds of Canadians and that the government has been acting on all three fronts: not just one, but three very important measures.

In fact, I could go on. We published — you have probably seen it — our spring economic update. If you look at the number of measures relating to affordability, you will find more than 10 measures that the government has put forward to support families. I could go on with the National School Food Program for children, for example. Think about child care. Think about the Canada Workers Benefit, the Canadian Dental Care Plan and the pharmacare plan.

I would urge senators not to look at this measure alone but to look at where we are as a government. We understand what Canadians need, and that’s why we say we’re going to be there to support them. We have a suite of measures. We are making generational investments in housing, and we are already seeing the costs of rent and the prices of homes stabilizing in many markets.

We’re acting on these three levers to support Canadians with the costs they are facing at the end of the month.

Minister, the opposition supports extending fuel tax relief completely in the other place and here in the Senate. However, Bill C-38 begins restoring the tax on February 1 and restores it fully on April 1, regardless of fuel prices or supply conditions.

My question to you is the following: Does your department expect the pressure on Canadian fuel costs to completely ease by then?

Senator, you are an experienced member of this house and obviously someone who observes the world with good judgement. The world is facing a period of instability, uncertainty and complexity that we have not seen in generations. Obviously, we have been working with our allies and partners to stabilize the situation in the Strait of Hormuz. We’ve been very much involved with our partners. These are discussions we have at the IMF and at the G7 level. If you look at the price of fuel over the last few months, it has been very volatile.

We just had the G20 conference in Asheville, North Carolina. At that event, I was saying that what is very unique now is the speed of transmission from global events to affordability issues for people, like, for example, in Shawinigan. The Strait of Hormuz has increased the price of gas for people in Moncton, but it has also increased the price of food in many parts of our country and around the world. What started as an energy crisis is translating into affordability issues and food security issues. Canada is not immune to what is happening in the world.

Certainly, we have the fiscal capacity to support Canadians. If you compare us to our G7 partners, senators would be proud to see that this government has not only been fiscally responsible but we have also been there for Canadians in times of need. I think that’s what Canadians expect from all of us.

Minister, your government recognizes through this bill that federal taxes affect fuel affordability, obviously. Conservatives have long called for the removal of the industrial carbon tax and the Clean Fuel Regulations to further ease the price of fuel on Canadians’ pockets. Minister, what is your department’s estimate of the combined effect of these two policies on diesel prices today, and how is that expected to change next year?

Thank you for your question, senator. I can refer you to what we are seeing in the G7. I would be happy for the committee to have these charts. You can see the level of diesel prices in the G7. Canada is not immune but is doing better than many of our G7 partners. Due to what is happening in the Strait of Hormuz, the price and the refining of diesel impacts all our partners. If you compare the change in diesel prices from September 2025 to February 2026, you will see that Canada is in a better position than other countries.

That being said, to your point, we understand that the measures in Bill C-38 will reduce the federal fuel excise tax by four cents on diesel. It is an important measure for farmers, truckers and everyone watching today in Canada. The Government of Canada is doing our part to support farmers and truckers around this country to ensure that we put pressure on the price of diesel to come down by suspending the federal fuel excise tax on diesel.

We may be doing potentially better than other G7 nations, but, minister, people are struggling and suffering. I heard a listener on the radio; I’m from British Columbia. He says he works and he pays for fuel; that’s all he can do. This is urgent. Minister, will you commit to tabling the underlying analysis distinguishing direct compliance costs from the amount passed on to consumers while accounting for differences between federal and provincial industrial pricing systems?

Senator, I appreciate it, and I am mindful of the story you just mentioned. We are there for citizens like the one whom you mentioned. The Senate can approve this bill as quickly as possible to ensure we enshrine this tax relief in law.

The federal government is happy to do its part to suspend the federal fuel excise tax, but there are other levels of government that can do it with measures as they desire. As you know, there is a tax component on the price of gasoline, diesel and aviation fuel. We are doing our part.

I know senators expect us to be fiscally responsible. You want us to support people. That’s what we are doing. Given that I have previously appeared at Committee of the Whole, senators expect me as the Minister of Finance in our government to be fiscally responsible. For the person whose story you mentioned, this is one affordability measure, but I could go on about more than 10 other affordability measures that help with the price of groceries, rent or owning a home.

Thank you, minister. I will look at a central problem in your government’s plan that Canada can produce —

Minister Champagne, it is always a pleasure to welcome you to the Senate of Canada. Like most Canadians, I welcome Bill C-38 and the government’s proposal to extend the federal fuel excise tax relief on gasoline, diesel and aviation fuel. Canadians do need relief from high fuel costs, but my question concerns the impact of the temporary suspension that has been in place since the spring.

At the time of its announcement, the government described this as a responsible measure that would reduce operating costs for truckers and businesses in the food, agriculture, housing, construction and delivery sectors.

Although the measure has been in place for only five months, has the government collected any data on how this tax relief has reduced operating costs for these businesses? Canadians need relief and Parliament needs evidence that this measure is delivering it and reaching businesses and consumers. It is a broad measure. Why was it preferred over a more targeted measure? Has there been any analysis on that and where we could have used the $2.9 billion for more targeted measures that would have reached all Canadians?

Thank you, senator. This is how Canada is seen as part of the G7: At the International Monetary Fund meeting, we are often singled out as one of the countries with the best approaches in terms of targeted measures, which are time-limited, targeted and strategic to support Canadians in their time of need. This measure was initially intended to end around Labour Day.

We need to manage with our heart and mind while understanding global events. The war and conflict that we are seeing in the Middle East have not eased. The pressure on fertilizer, gas and logistics around the world has not eased. Therefore, countries like Canada have fiscal capacity. We entered this period in a position of strength. Canada is one of the very few G7 countries with the fiscal capacity to support its citizens during times of need. This is just one of the measures. We probably have 10 other measures that really support Canadians with affordability. Housing is probably the biggest one. If you think about the generational investments we have made and if you look at the typical family, the average would be 30% of people would invest or have to pay for funding an affordable and safe home. Then on top of that, you put what we have done in terms of groceries, and now you are looking at gas. In the G7, we are probably the country with the most comprehensive suite of measures to support people with the things that really matter to them. Those are pressure points every month and every week, and we want to support them with real measures.

If you look in the Spring Economic Update, senator, you would probably be very pleased and almost proud when you look at that and see the number of people we are touching. If you look at the Canada Groceries and Essentials Benefit, we are touching 12 million Canadians. This is significant.

For example, in regard to what we have done on workers’ benefits, that’s 3 million people around the country.

The various measures we have put in place and the temporary suspension of the federal fuel excise tax affects more than 25 million people. We have been able to create a set of measures that are broad-based and also strategic and targeted at a time when we need to be both fiscally responsible and also provide a boost and a bridge for people toward a more stable time in our economy.

Thank you for that answer. It is important when you have a preferable comparison to the G7, and it is always great to know how well we are doing, but it is also about how well we could be doing. It’s constantly important to have those targeted measures for all Canadians.

Minister, the bill would restore half the excise tax in February and the full tax in April. What economic assumptions underpin that timetable? If fuel prices remain elevated, what criteria would guide a decision to extend relief again? Families and businesses need predictability. Will you commit to publishing your assessment before the suspension ends so that they can plan for the resulting costs?

No one has a crystal ball for what the world could look like then in terms of the volatility and the transmission of global events into pocketbook issues. This was a real issue at the centre of our discussions when we last met at the G20 meeting. I talk about speed. There is a sense of loss of control for people. Those events seem far away. Then, suddenly, it’s the end of the week or the month, and even though Canadians have done nothing wrong, food and gas prices have impacted them. Therefore, we have been acting.

To your point, I think what we’ve done is responsible. We want to be fiscally prudent in how we approach it. The level of volatility and complexity in the world today warrants that, as Minister of Finance of this country, I approach this situation in a prudent fashion and that I look at measures that will make a difference to people.

I want to remind all the senators in this room that this is just one of the many measures we have put forward to support Canadians. You can think about the Canada Child Benefit and the National School Food Program for children. There are a number of measures where you see that families and individuals are saving money. Those who need it the most receive the support that we can give.

I certainly hope that the pressure on the price of fuel and fertilizers will have stabilized by then. That’s certainly the hope and the desire of everyone that I have been in contact with during our interactions with fellow G7 finance ministers.

In April, the government indicated that lower operating costs and stronger financial positions could allow businesses to hire workers and increase their exports to global markets.

I have a three-part question if time permits. First, has the government assessed the extent to which this specific measure has contributed to employment growth or enabled businesses to hire additional workers? Second, has the government evaluated if the measure has helped Canadian businesses expand their international reach and increase their exports of goods and services? Third, has the government made any projections on how the extension will impact employment and Canadian exports?

When you address the cost of energy, you help everyone because energy is a requirement for all the businesses you mentioned, whether you’re talking about farming, trucking or logistics. That’s why this measure, in my view, is one of the best-targeted measures to provide support across the board because, obviously, you are reducing the costs of energy, whether you’re an employee who needs to take your car or truck to work or a person in the logistics business moving goods or farming products across different provinces. If you’re someone in the aviation sector, where we have seen pressures in many ways, that will have an impact on the price of aviation fuel. It is a very broad-based measure. That’s why it needs to be targeted and very focused in the period you can provide that support.

It is good news for workers, it is good news for businesses, and it is good news for consumers across the country, because we know that the price of diesel, in particular, will have a horizontal impact in many sectors of our economy. Therefore, what we have done is, in my view, one of the best-targeted measures. I assure you, in all of the meetings I go to internationally, Canada is often singled out as a country that has been thoughtful in how we approach that to not only support one sector in particular but also have a broad-based measure to support everyone in the Canadian economy.

Thank you, minister, for being here so promptly to discuss this bill. Let me ask you this: Did you consider a more targeted approach, such as, say, a reduction just for farmers, or perhaps reducing it by 50% for twice as long? Have you considered the effect of the possible export ban on diesel that President Trump has been talking about?

Thank you, senator. It is a pleasure to be sitting next to you.

The feeling is mutual.

To the first part of your question, I think broad measures are more appropriate in the circumstances. If you look at fuel, which is related to the question that the honourable senator was asking before, you want to support everyone in the country.

We have a number of support packages for specific sectors. You will recall, for example, recently, when we announced countermeasures to the U.S. tariffs, we announced $7.5 billion to provide more liquidity for businesses and support for workers. However, when you look at something like the price of fuel or energy across the nation, different people will be impacted differently, but everyone is impacted. A broad-based measure, at least in my opinion, is better because if you do it for gasoline, aviation fuel and diesel, it has an effect in many sectors of our economy.

Senator, we’ve been in contact with those who produce fuel in our nation. I’m told that they are maximizing their diesel production. We produce more diesel than we can consume in Canada. We are producing at full capacity, but you know as well as I know, senator, that the price is influenced by what’s going on in the world. Therefore, there are things we, you and I, can’t control — for example, what is happening in the Middle East — but we can control how we respond, how we support Canadians and how we create the fiscal space for us to do that. I think Canadians now see the benefit of being fiscally prudent, because when you are fiscally prudent, when events like that, which are not within your control but to which you are not immune, happen, it allows you to respond in a targeted way for those who need it most.

For now, we are looking at what is happening in other jurisdictions, but what we can control is how we respond. The House of Commons was unanimous, and this was a measure applauded by everyone. The suspension, by unanimous consent, received the same kinds of accolades from members of the House.

Can you say anything about the world picture? You’ve talked about the geopolitical nature of this measure. What other geopolitical issues are you watching for around the world that we should all be thinking about?

I often say that the speed, scope and scale of changes are unprecedented. It’s geopolitics, geo-economics and technology. This leaves populations in many countries with a sense of loss of control. All these events are happening at once and very quickly and are so broad-based. That’s why I think the Prime Minister has been judicious and wise in saying, “Let’s focus on what we can control.” What we can control is building one Canadian economy and removing interprovincial trade barriers.

Good afternoon, minister. Thank you for joining us today and for coming here regularly to take questions from senators.

You chose to maintain the full suspension of the excise tax until January 31, 2027. As a result, Canadians will see a real difference in the price that they pay. However, business owners and Canadians have been asking me why you chose that specific date. I would like you to tell us why you chose January 31 over any other date and what factors or data you based that decision on.

Thank you, senator. It is always a pleasure and a privilege to appear before the Senate and to talk with senators.

When we first suspended the excise tax, we were thinking about the state of the world and about how quickly things were changing. When we announced the measure in April, some people believed that the tensions in the Middle East would be resolved one way or another and that shipping traffic in the Strait of Hormuz would get back to normal. However, we now know that this is definitely going to take longer and be more complicated than we thought, particularly because we saw that . . . . I often say that geography doesn’t change very much and neither do people. We are now at the point where we are realizing that there will always be some tension.

Perhaps you heard the executive director of the International Energy Agency say:

“The global energy architecture is changing, and Canada can be at the centre of it.”

People are starting to realize that . . . . As you know, there are about eight straits in the world that are critically important to shipping and logistics. None of them are in Canada. Canada has access to three oceans, but it has no straits.

As I see it, Canada can and must become that reliable energy security partner because what our discussions today show is that there is a direct link between food security, energy security and national security. That is why countries are turning to Canada. When the global energy architecture changes, as Fatih Birol said in Montreal, people start to wonder who they’ll be doing business with for the next 40 or 50 years. Energy security is national security. Take our Asian partners, for example, like Japan or South Korea. They import a lot of their food, but also a lot of their energy.

As for the choice of date, we thought that a solution would be found by then. That’s why we chose it. However, we realize that we are going to need to postpone it to allow for a longer suspension because of the secondary effects.

Welcome to the Senate. I’m going to continue in the same vein as my colleague. I’d like to know why the government opted for broad-based tax relief for all consumers rather than targeted support for the households most affected by rising fuel costs. What was the logic or analysis behind that decision?

Thank you for your question, senator. This relief affects energy costs for various industries, but the impact is being felt by everyone, albeit to varying degrees. I think that, in this case, it is a direct, immediate and targeted measure, because we’re suspending the excise tax on fuels. It’s a quick way to help citizens when they need it.

Energy costs affect different industries, and I think it was important to have a horizontal measure that’s universal. Twelve million Canadians received the Canada Groceries and Essentials Benefit. That program was even more targeted because we knew there were people who needed it. We’re trying to make up for the excessive food inflation since the COVID-19 pandemic. That’s why we provided a top-up for one year and then increased the benefits for the next four years. We’re implementing different measures for different issues.

My message to Canadians today, on the subject of housing, the cost of food and the price of gas, is that we’ve taken action on all three of those issues to support Canadians. We’re also taking action in a very targeted way with measures like the National School Food Program. That program helps the children who need it the most.

In terms of energy, it is more of a cross-cutting measure, and one that has been widely welcomed by several countries. They have recognized that Canada is able to offer this support in the current context because it has the fiscal capacity to do so, enabling it to provide immediate relief by suspending the tax.

Will the government publish data that can be used to assess the impact the bill has had on gas prices and transport costs?

Good to see you, minister. As it has been established, the price of diesel is at record highs. I want to focus on how this is impacting primary agriculture and our farmers and ranchers in respect to Bill C-38.

According to Statistics Canada, in 2024, of the 10.2 billion litres of diesel sold in Canada, the agriculture sector was the second-largest buyer, accounting for about 15% of those sales. Planting, tending to, harvesting and marketing crops is a fuel-intensive process.

According to Natural Resources Canada, or NRCan, the national average price just last week soared to $2.64 a litre, a 59% increase from earlier this year. And don’t forget the pricing spike we saw in 2022. Both of these spikes are directly the result of geopolitical conflicts.

As I speak right now, in my home province of Prince Edward Island, farmers are in the midst of the potato harvest, one of the most fuel-intensive times of the year on a farm. The government’s current relief measures are a start, but 4 cents a litre, as I’m sure you can appreciate, about 1.5%, is a drop in the bucket when facing $2.60-a-litre diesel. Even if global geopolitical tensions ease tomorrow — dream the dream — diesel prices won’t drop tomorrow, and producers will already have bought and spent the majority of this crop’s fuel at those higher prices.

How are we ensuring we are setting up our primary producers for the potential success that Dominic Barton pointed out in 2017? Canadian agriculture provides $159 billon in GDP now. How does this government plan to substantively address the fragility and unpredictability Canadian farmers and ranchers face? Farmers, as you know, are price-takers. They sell in commoditized markets. They cannot pass along these increased costs, but they must figure out how to absorb them and not go out of business. We are relying on them. Are the measures in Bill C-38 enough, minister?

Thank you very much, senator. I would like to say “hello” to all the people from Prince Edward Island watching us today. Obviously, a great province and great people.

Thank you for your question. It is multi-faceted, so I will try to say a few words to do justice to your question. The answer is not only in Bill C-38, although it is one of the measures that will help with the price of diesel. You have to look at the National Food Security Strategy. I agree with you wholeheartedly. We talk about Canada as an energy superpower. I like to think about Canada as a food security superpower. We have what the world wants and needs in many ways.

For example, I was just with the Minister of Finance of India, the fastest growing economy in the world, which has overtaken Japan now, not only in the fastest growth but in terms of the size of the economy. I think it is the third-largest economy now. Obviously, when you are talking to partners like India and others, Canada comes to mind when you think about the role that we could play in supporting food security around the world.

That’s why the National Food Security Strategy is one step in that direction. The government is recognizing the role that Canada can play. You have seen, like me, in many instances, that we need to grow more at home. The price fluctuation we see in the winter is because we import a significant amount of fresh produce; I think it is 80%. Then we are subject to price and currency fluctuations, droughts and other things. So you will have seen that there are a number of measures in our National Food Security Strategy to support our farmers.

It is one of the great Canadian exports. Canadian products stand for excellence, predictability and traceability. Some of what you are producing in Atlantic Canada, obviously including Prince Edward Island, is the envy of the world. We will be there to support our farmers, our fishers and the hard-working people in Prince Edward Island and beyond.

I am very much one who believes, as I said, that the nexus today between food security, energy security, national security and economic security is all coming into one. It is great because, if you look at the megatrends of the world, whether it is about energy, critical minerals and AI, Canada is well positioned to seize those opportunities. I think food security — and I will stop there, senator — is, more and more, front and centre.

In our last discussions at Asheville, North Carolina, at the G20, the issue of food security was front and centre. We have seen how fragile the world is. One strait is blocked, and, suddenly, you have hundreds of millions of people around the world who could suffer from food insecurity. That’s where a country like Canada can step up and support our allies and partners around the world.

Welcome, minister. I want to thank you for everything your government is doing to address the cost of living crisis and to make the Canadian economy more resilient.

Statistics Canada recently reported that the oil sector’s profits climbed 80% in the second quarter, which coincides with when the excise tax on gasoline was suspended.

South of the border, a study carried out by the Bipartisan Policy Center in Washington demonstrated that in 2022, when the U.S. temporarily reduced the tax, 60% to 80% of those savings got passed on to consumers.

To address the questions raised by Senator Gerba and Senator Loffreda, in the interest of transparency, are you prepared to release any study undertaken by your department or the Competition Bureau to demonstrate that the totality, or at least the bulk, of the tax rebate went into consumers’ pockets and not those of the oil companies?

Thank you, Senator Gignac. That is an excellent question.

The statistics show that prices dropped by an average of 10 cents across Canada the day after the suspension came into effect. That is a fact. We saw an immediate effect. You’re an economist. Obviously, you understand how this sort of thing works. We were very concerned about making sure that the price drop was passed on to consumers.

Your question is completely valid, as always, senator. We expect the Competition Bureau to keep a very close eye on this. The Competition Bureau has conducted several studies on the price of gas across the country, even back when I was serving as the Minister of Innovation, Science and Industry. I can tell you that the evidence clearly shows that this measure had a positive impact across the country starting the day after it was implemented. We saw a drop in price of approximately 10 cents. As you said, this is a targeted measure that also had a direct impact on consumers the very next day.

I understand that you intend to go a bit further. It’s true that the price went down 10 cents the next day but then prices actually went up. It’s difficult to assess, so if you have more information . . . .

Minister, oil company profits rose by 80% in the second quarter. Is it because they took part of the excise tax or is it because they took advantage of the conflict in the Strait of Hormuz to increase their profit margin? In both cases, motorists are paying the price.

You have the power to appeal to the Competition Bureau, as you did in the matter of grocery stores. I remember discussing this at the Standing Senate Committee on National Finance in 2024. You took action, you met with grocery chain executives, and we saw results. Do you intend to meet with oil company executives so they can explain why their refining margin increased by 80% in the second quarter, according to Statistics Canada?

Thank you, senator. You are correct. As you know, the Competition Bureau is at arm’s length from the government. There are mechanisms in place that allow the minister responsible to ask the Competition Bureau to look into this specifically.

If you look at my comments when the measure was announced, I believe I was very clear about our expectations of the Competition Bureau. Essentially, I was speaking on behalf of Canadians. As minister, I expressed everyone’s expectations of the new tools. You will recall that when I was the Minister of Innovation, Science and Industry, we expanded the range of tools available. Many people said that the Competition Bureau was doing a good job but lacked the necessary tools and funding, even. We provided both. As you say, people have a right to expect the Competition Bureau to monitor these margins very closely.

In the 20 seconds that I have left, I want to say that I hope that you and your colleague, the Minister of Energy and Natural Resources, can meet with oil and gas executives to clarify why profits jumped by 80% in the second quarter, which coincides with the conflict in the Strait of Hormuz and your tax cut.

Thank you.

Thank you, minister, for being here today. I have a series of questions, not about the merits of the fuel tax suspension policy, which is a welcome relief for Canadians, but rather, about the tools that the department recommended for implementing the fuel tax suspension in the absence of an actual law to do so.

I note that, on September 2, the Department of Finance issued a press release indicating that the fuel tax suspension will be extended on September 8, the day after the suspension was originally scheduled to end. Bill C-38 will legally extend the date of the fuel tax suspension retroactively to September 8, subject to Bill C-38 receiving Royal Assent.

With that, my first question is straightforward: What is the legal authority, at present, to suspend the fuel tax effective September 8, absent a law passed by Parliament with retroactive effect?

Thank you very much for your question, senator. I should have introduced Maude Lavoie, who is with me as well, if you want a more technical answer. However, I will tell you my understanding as a lawyer but also as the Minister of Finance of Canada.

There is a long-established practice at the Canada Revenue Agency, or CRA, to administer a tax measure before it receives Royal Assent. It is a well-established and long-standing principle in Canadian law.

They are looking at two criteria when the legislative amendment is in its final form and has been announced publicly. Obviously, all senators have seen that Bill C-38 is, I would say, relatively simple. I see senators smiling. It is a piece of legislation which is discreet, in a sense, and is very targeted, and we are amending only a few articles. Senator, we are extending the suspension. So this is already a measure that was in place, but we’re extending the suspension, and it has received unanimous consent from the House.

If you look at the established practice of the CRA, they are very much within the scope of normal practice when a measure is introduced or announced by the finance minister of Canada.

Thank you, minister. Rather than using a press release, which gave Canadians the impression that the fuel tax suspension was still in effect, and in the absence of a cabinet remission order, why was Parliament not recalled to pass legislation to give this extension the force of law prior to September 8?

Thank you, senator, for your question. As I said, you will find precedent for how the CRA is applying the suspension. Not only did the initial suspension receive Royal Assent, but this was an extension of a suspension. I think we’re very much within the established practice of the CRA.

I’m trying to understand your concern and how we can best address it. However, I have not heard any legal or tax scholars suggest that what has been administered is outside of normal practice that has been established for decades in this country when it comes to administering tax measures announced by the finance minister of Canada.

Just for clarity, can you confirm that the CRA will not commence any enforcement proceedings against fuel retailers for the non-collection of taxes because of the situation? I ask because sometimes in the bureaucracy, there is confusion, and a directive is given to the CRA to ensure that no actions are taken in any remote area of the country or in large urban centres where they are doing their job by collecting that which is not in force.

Senator, I appreciate your question and thank you for your concern. There is some benefit to being the Minister of Finance and National Revenue of Canada, which is that the agency reports to me as well. To address your concern, it is the case, but we’ll ensure that we confirm with the agency that we would expect it to administer the intent of Bill C-38 in order to avoid any possible situation like the one you described.

Minister, my questions are really focused on highlighting an ongoing problem in Canada where we do not have a provisional implementation of taxes act. Although tax decreases without parliamentary authorization are not as controversial as tax increases, like the now-abandoned capital gains tax, they highlight a structural problem of how we handle taxation in Canada.

In 1985, your own department issued a white paper called The Canadian Budgetary Process: Proposals for Improvement. It highlighted the issue, saying:

. . . during the period until the proposed legislation is enacted by Parliament with retroactive effect, the system is, in effect, voluntary and is not backed by the force of law. In the case of taxes provisionally collected, until the legislation is enacted there is no legal requirement to pay, nor any legal authority to collect, the proposed tax.

My question is this: Should your department, since raising this back in the 1980s, not consider introducing a provisional implementation of taxes bill so that these types of situations we’re discussing today don’t arise?

I thank the honourable senator for the question.

I’m happy for us to look at what you just suggested, and if the Senate wants to study that in more detail, we would certainly look at it. As you said, certainty and predictability are paramount to me. As the Minister of Finance of Canada, I want to provide that kind of stability and predictability.

If the Senate wants to study that question further, senator, we are certainly always willing and open to considering whatever the Senate can suggest to improve the tax code in Canada.

Minister, today, you have referred to affordability and the challenges that families face, as well as other issues; you’ve mentioned child care. I want to return to your speech at second reading in the House of Commons, when you spoke to the larger issue of economic uncertainty and the rising cost of living, saying:

. . . affordability is a major concern for families and businesses across Canada. One of our government’s priorities is to help Canadians keep more of their hard-earned money. . . .

I would like to build upon the same themes you have raised by noting there are several income tax credits not subject to automatic indexation under the Income Tax Act. For example, the Child Care Expenses Deduction — valued between $5,000 to $11,000 per child, depending upon circumstances — has not been increased since 2015. With daycare costs increasing, this means that, as of the 2025 tax year, there has been a loss of value of over 36% for a child who is under the age of 7, resulting in a $4,600 shortfall.

Why is the government not introducing legislation to ensure all personal income tax credits are indexed to inflation — especially the Child Care Expenses Deduction — to help make life more affordable for Canadians and to be consistent with the very strong messages, which I agree with, that the government has been articulating to Canadians for the past few months?

Thank you, senator, for reading what I have said. I’m pleased to see that a senator has been reading my remarks in the House.

To your point, tax simplification is top of mind for me as the Minister of Finance. We are looking at a number of things to make it easier. You can think of the automatic enrolment for benefits, which will benefit more than 5 million Canadians. That is one benefit, as I said, to being Minister of Finance and Minister of National Revenue: You can work with the agency as Minister of Finance to push these things through quickly. The automatic benefit enrolment is one example where we are trying to ensure that those who need it most will interact with the CRA in the most efficient way.

To your point, it is always a matter of fiscal policy — which credit, how you address that, what you index and whether it’s refundable or non-refundable. Trust me, senator; a number of Canadians stop me in the street with suggestions about what we should provide. Therefore, we listen. We just completed our very wide pre-budget consultation and received input from people.

You can rest assured that, as Minister of Finance, I am always looking at ways to ensure we simplify things and to ensure our tax system remains fair to all Canadians.

Therefore, to your specific point about which credits should be indexed, that is a matter of fiscal policy that one must look at. However, I hear what you said, senator, and I see your keen interest in helping this government and me regarding tax simplifications, so if you have any —

I will.

Thank you for joining us, minister.

The people I’m speaking with on the street are often literally in the street. With the new measures in Bill C-38, the temporary cutting of the federal fuel excise tax is now expected to cost Canada — and, therefore, Canadian taxpayers — a total of $5.3 billion this year in foregone tax revenue. Economists have highlighted that this was not the only option for relief. Olivier Gervais, a director at Scotiabank, noted that the Canada Groceries and Essentials Benefit GST/HST tax credit would be “. . . another lever that would be relatively easy to use.” He noted it would allow the government to take extra money they’re getting from higher oil prices and redistribute that more efficiently to the Canadians struggling the most.

Also, for less than $5.3 billion per year, the Parliamentary Budget Officer found that we could be implementing a guaranteed livable income, which would be meaningful support that would allow the growing numbers of Canadians who are homeless and hungry to rebound in ways that benefit all of us, our communities and our economies.

The PBO’s April 2026 costing of the initial fuel excise tax suspension indicated that those with the highest incomes would benefit about four times more than those with the lowest incomes.

My question is this: Instead of a plan that would prioritize those most in need, why are the lowest-income taxpayers still footing part of the bill, not only every time Canadians use their cars but every time the wealthiest in this country use their private jets?

Thank you, senator.

Our fuel excise tax suspension is very targeted and time limited. It has been well designed. However, I take your point very seriously, senator. I come from rural Canada and understand that Canadians in many parts of our country need support, but you have to look at it in the spectrum of things we have been doing.

If you look in the Spring Economic Update, we published a number of measures to support Canadians. I will start with the Canada Child Benefit, from which 6 million Canadians would benefit. The National School Food Program would benefit 400,000 kids in our country. The Canada Groceries and Essentials Benefit would benefit 12 million Canadians. The early learning and child care system would benefit 900,000 kids. Looking at the Canada Workers Benefit, it would help 3 million people.

I could go on with the list, senator, but I would just say Bill C-38 is one of the measures. However, you have to look at what we have done regarding housing, which is generational: providing affordable and safe homes for Canadians — places they can afford and that are safe.

The grocery benefit is very targeted to those who need it most. The gas measure is one other element. However, if you look at what I call the pyramid of affordability, we have been acting on the three levers, but on the list of things regarding dental care, pharmacare, student loans and workers’ benefits, I think you will have seen that we have been trying to help those who need it most every step of the way. That is very Canadian.

You’re right: We had additional revenues. However, you will see in the Spring Economic Update that a very significant portion of those revenues have been used to support Canadians in a time of need. On the one hand, we have additional revenues, but we have used those to support Canadians.

Again, I appreciate if you are looking individually, you might say the situation is like this, but if you look at the suite of measures we have to support Canadians — automatic benefits and the things we have been putting in place — we’re supporting millions of Canadians, those who need it the most at the time they need it. We’re trying to be targeted and very immediate in our support.

Thank you, minister.

There is no doubt there are benefits that exist for some of those folks, but we’re talking about Bill C-38 right now. It is one of a number of tax measures this year to move us further away from the goal of a progressive tax system in which everyone, including those most privileged and powerful, contribute their fair share and those most in need are the top priority for support.

As Oxfam Canada recently reported, in these challenging economic times, the wealth gap in Canada is growing, not reducing, and the top 1% — those with a net worth of $7 million or more — now own as much wealth as the 80% of Canadians with the least.

What tax policy measures are you exploring to ensure that billionaires and multi-millionaires are contributing their fair share to Canada?

Thank you, senator, for raising that question.

We are always looking to ensure the tax system in Canada is fair, and that is very Canadian. At a time like that, the thing we need to do is build and support each other. That is why I’m particularly proud of one of these measures.

When we made the National School Food Program permanent, I must say this was a great moment of pride for Canadians and for every member of the House — I can tell you — because this is not political. This is about supporting 400,000 kids with a meal in the morning when they come to school. That’s the kind of thing that Canada should do and does do to support Canadians. We’re always looking at ways to support Canadians while ensuring that our tax system is fair.

I can assure you that, just like you, I’m always looking at the situation with my mind but also with my heart, while asking, “How can we help people during a time of need?” The suite of measures that I could go through, which you have seen, is ensuring that for everyone — whether you are a single mom or a young child or a worker who has been impacted by the tariffs or a farmer or a trucker or a fisher — there is something where the message we are sending is: We are there for you in different ways.

Thank you very much, minister. Does that mean we can expect to see the work that Senator Downe and others have been doing on tax evasion, as well as a wealth tax, emerge in the coming proposals?

We’ll be looking at what is being presented, and we’ll give due consideration, obviously, to all the work that is being done by the Senate and the various committees. We always do that with due consideration to what is being proposed.

Honourable senators, the sitting of the Senate is resumed.