Honourable senators, the Senate is resolved into a Committee of the Whole on the subject matter of Bill C-30, An Act to amend the Income Tax Act (temporary enhancement to the Goods and Services Tax/Harmonized Sales Tax credit).

Honourable senators, in a Committee of the Whole senators shall address the chair but need not stand. Under the Rules the speaking time is 10 minutes, including questions and answers, but, as ordered, if a senator does not use all of his or her time, the balance can be yielded to another senator. The committee will receive the Honourable Chrystia Freeland, P.C., M.P., Deputy Prime Minister and Minister of Finance, and I would now invite her to join us, accompanied by her officials.

(Pursuant to the Order of the Senate, the Honourable Chrystia Freeland and her officials were escorted to seats in the Senate chamber.)

Minister, welcome to the Senate. I would ask you to introduce your officials and to make your opening remarks.

Thank you, Madam Chair. I want to thank the officials from the Department of Finance who are here with me: Miodrag Jovanovic, Assistant Deputy Minister, Tax Policy Branch, Finance Canada, and Pierre Leblanc, Director General, Personal Income Tax, Finance Canada.

Madam Chair, I’m pleased to be here with you and the senators to discuss Bill C-30, the Cost of Living Relief Act, No. 1, which will provide targeted tax relief for Canadians who need it most. This bill proposes to double the GST credit for six months.

Single Canadians with no children would receive $234 more and families with two children almost $500 more. Seniors will receive an additional $225.

This is additional support for roughly 11 million Canadian households.

Bill C-30 is just one element of our new package of support. As members of the Senate know, Bill C-11 includes a Canada dental benefit and a one-time top-up of $500 to the Canada Housing Benefit.

Thank you, minister, for being here to discuss Bill C-30. We are not discussing the dental plan today; we are discussing the GST plan.

I am always a little afraid when we have a minister of the government saying, “Only $3 billion.” To many of us, that is a very large number.

My first question, minister, is simple: Did your department conduct any analysis of the impact that this spending measure will have on the inflation rate in Canada?

Thank you, Senator Plett. Let me be clear: I take spending very seriously, and I absolutely recognize that $3.1 billion is a significant sum of money. We were very careful and thoughtful in choosing this measure, striking a balance between compassionate support for those who need it the most and remaining fiscally responsible.

The $3.1 billion in incremental spending — which includes the incremental spending on the other measures as well — is 0.1% of Canada’s GDP. I want to remind people that, today, Canada has the lowest deficit, as well as the lowest debt-to-GDP ratio, in the G7.

Minister, when we ask a question, we are given a limited amount of time. I would appreciate you at least mentioning something in your answers about the question I asked.

I will go to a different question and see if this one will work better.

It is now clear that your government’s policies have directly contributed to the rising cost of living. This is why it is now widely referred to as “JustinFlation.”

In fact, earlier today in Halifax, the Governor of the Bank of Canada said, “. . . we need to slow spending in the economy so supply can catch up with demand.”

Minister, how will Bill C-30 slow spending in the economy, as requested by the Governor of the Bank of Canada?

With due respect, senator, I disagree with many of the assertions you have just made. I very much disagree with the assertion that Canada’s government spending or that our fiscal policy is loose.

As I said at the beginning, we have the lowest deficit in the G7. That is the appropriate group of peer countries to compare us to. I was very mindful, and our government was mindful, when we tabled our budget in April, of the fact that inflation was elevated. We understand that it is very important for fiscal policy not to work at cross-purposes with monetary policy. That is why we were careful in April. That is why, as I said in my remarks, this support is not going to support everyone. This is carefully targeted relief that is supporting the people who need it the most. It is absolutely within a fiscally responsible approach, which is the one our government is taking.

Well, that is two-for-two, minister. You may disagree with my approach and you may disagree with what I’m saying, but you cannot disagree with a question. My question was very clear and quite specific. Again, you did not touch it, but rather you told me what you think of my approach.

During the last election, the Prime Minister told Canadians he doesn’t think about monetary policies. Since then, inflation has skyrocketed by 7%, and grocery prices are up by 10.8%, rising at the fastest pace in 40 years.

You can disagree with that, minister, but I would appreciate an answer to whether you can tell this chamber and all Canadians — the Canadians that you say are very smart, and that is the one thing that I agree with you on, minister — whether the Prime Minister has started thinking about a monetary policy yet. If not, do you have any idea how high inflation and interest rates will need to go before he starts thinking about a monetary policy?

Thank you, senator. Our government understands that monetary policy is the province and the responsibility of the Bank of Canada. We also understand the importance of the independence of the Bank of Canada in Canada’s institutional framework. I think that it is important for all of Canada’s political parties to respect that institutional independence, particularly at a time when there is a high degree of volatility and uncertainty in the global economy.

When it comes to inflation, it is probably worth pointing out that for the past two consecutive months, inflation has actually been falling in Canada. It was at 8.1% in June, 7.6% in July, and the August number was 7%. It is still elevated and it is still a very serious concern for Canadians. It is worth noting that trend as well.

Minister, according to your calculations, because of Bill C-30, a single mother with one child and a $30,000 net income will receive an additional $386.50 for July through December. This works out to an additional $2.10 a day. However, over the same period, the purchasing power of this single mother’s income will have been reduced by more than $1,000 due to inflation, or about $5.43 a day.

While your government is presiding over the highest inflation hike in 40 years, which takes more than $5 a day from a single mother such as this, you are turning around and offering $2 a day and pretending to be a hero. When will your government take real action, minister, to fight inflation, which is making life more expensive for all Canadians?

Thank you for the question, senator. I think it is important for us to be clear — and this is why I underscored this in my opening remarks — that it is simply not possible or advisable for the government to compensate all Canadians for the very serious impact of inflation. We are not claiming to do that. It is not possible to do that precisely because we understand that at a time of elevated inflation, it is really important for fiscal policy not to be at odds with monetary policy.

We understand the importance of a fiscally responsible approach. At the same time, we know that we can afford, as a country, to be compassionate and provide targeted support to the Canadians who need it the most.

Senator, this may be a second point upon which we agree: I agree with you that this is inflation relief. I absolutely understand that things are hard for a lot of Canadian families and hardest of all for the most vulnerable. I do think that it is the right thing to provide this support now and I am glad that in the House of Commons we had unanimous support for this legislation earlier today.

You will likely have good support for this legislation here, too. That does not preclude us from having issues, minister.

When the measures in Bill C-30 and Bill C-31 were announced, economists had already begun to warn the Trudeau government against measures that would worsen inflationary pressures. The CIBC, Bank of Montreal and Scotiabank have all released reports expressing concern over using revenue windfalls for additional spending. I will quote Derek Holt from Scotiabank:

. . . it seems sensible to assume that this will add to pressures on measures of core inflation . . . . Any belief that it will ease inflationary pressures must have studied different economics textbooks.

Minister, do you have a different economics textbook from other Canadian economists?

We believe that, right now, we need to strike a balance between fiscal responsibility and compassion. I am confident that this measure does precisely that. Let me remind honourable senators that Canada has a triple-A credit rating and the lowest deficit in the G7.

Thank you, minister, for being with us here this evening. I’m honoured to sponsor Bill C-30 in the Senate, and I’m happy about the collaboration and commitment both here in the Senate and in the House of Commons to ensure that Bill C-30 receives Royal Assent this month. Our Speaker pro tempore, Senator Ringuette, had asked a question during my Bill C-30 briefing, and I figured why not obtain an answer and confirmation straight from the minister; she will be joining us.

This is a tax-free credit, and there is no possibility of any clawback from the provinces; the keyword here is “clawback.” The credit will be a full benefit for those in need, as intended, and help individuals and families offset the GST or HST that they are paying. Have there been any discussions with the provinces, and will there be any clawbacks to that effect? Just looking for confirmation on your part.

I’m happy to confirm that. Mr. Jovanovic, who is here with me and has forgotten more about tax policy than I think pretty much anyone in the world will ever learn, has confirmed that as well.

I agree that it is targeted, fiscally responsible and will support low-income Canadians.

My question now is on Canadians who do not file taxes. Obviously, to benefit from the GST tax rebate, one must file his or her taxes. However, according to our Auditor General, we know that close to 10% of Canadians do not file taxes, and many of those Canadians would likely fall into the category of low- or moderate-income individuals. They are the target recipients for this type of rebate.

I think that this is a major issue. It is a shame that not all Canadians who deserve and need the GST rebate will be getting it. Have you looked into how the government could further encourage every working-age Canadian to file his or her taxes and, within your department, how much of a problem or challenge is this? How do you suggest we rectify this situation?

Yes. I think it is a very good question. It is something that we thought about and talked about a lot in choosing this approach.

Our view was that we wanted to use a vehicle that already existed and was effective at targeting the most vulnerable Canadians. We knew that people needed some support with elevated inflation, and we thought it would be more practical and more effective to choose a vehicle that exists already and has been designed to do that, such as the GST tax credit. That is why we chose this vehicle for delivering that extra support.

You make a good point that there are some people who don’t file tax returns. I do think that we need to be working together — all of us — to encourage people to do that, because there are a lot of benefits available for low-income Canadians if they file their return and we know who they are and can identify them.

Welcome, Minister Freeland. Thank you very much for your opening remarks.

The goal of Bill C-30 as part of a package to support low‑income families is well received and needed. This support has the potential to impact 11 million people and families, which is great.

However, I take a look at the global economy and follow on the questioning of my colleague Senator Plett. When we look at the generosity of the government in distributing taxpayer money, Canadian taxpayers are offering the fossil fuel industry between $4.5 billion and $18 billion per year in subsidies, and, at the same time, this sector is reporting record profits. We know that inflation is related to the war and the energy crisis.

My first question is: Can you please update us on the progress of eliminating inefficient fossil fuel subsidies in the peer review with Argentina? That started in 2018, but it was a promise, I think, from the Harper government in 2009 as part of the G20.

Yes, thank you for the question.

Canada, together with our peers, has committed to eliminating fossil fuel subsidies, and we will do that ahead of schedule.

I will leave it there. That is what we have committed to do. We are doing the work on it now, and we will do it ahead of schedule.

The preoccupation here is that we are picking up on our credit, and we are disbursing public money. This situation is no different from what is happening in Europe or elsewhere, where they are considering an excess profit tax or windfall tax.

Are you considering a way to recoup some of this through an excess profit tax on the fossil fuel industry?

I would actually argue that the situation in Europe and in Canada is, in fact, really different. In Canada today, I think we find ourselves very lucky to be richly endowed with natural resources, and we are lucky to be a producer of oil and gas.

When we speak to and look at the situation that our European allies are facing, it is really good that we can heat our homes and power our industries.

Europe, unfortunately, finds itself in a position where it is hugely dependent on Russia — on a dictatorship — for fossil fuels, and that is causing much greater disruption in the economies of Europe than we are facing. I do think the situation is really different, and the way the energy market works in Europe and the way the energy market works in Canada is really different.

Senator, where you and I can agree is I absolutely do think that it is important for a country like Canada, where we believe in a strong social safety net, to ensure we have a tax system that can pay for that and ensure that those who are the best off pay their fair share. That is why we introduced in the budget a permanent 1.5% tax on the largest banks and insurers. It is why we introduced a 15% COVID recovery dividend to help pay for the costs of supporting Canada and Canadians through the pandemic. Our luxury tax on really expensive cars, planes and yachts came into force on September 1, 2022.

You committed to moving toward mandatory reporting on climate-related financial risk only for some institutions, starting sometime in 2024.

Given the present situation, and because of what you are saying about equilibrium between compassion but also fiscally responsible —

Point of order, Madam Chair. This is a Committee of the Whole, where I believe we’re allowed points of order.

I had many questions for the minister relating to topics other than the legislation before us, but I was advised it was against the rules and that we are to ask about the legislation before us. I would like to ask the minister about beneficial ownership, but it is not covered in this bill, so I think we are required to stay on topic.

Agreed.

As long as you tie your question to the bill, Senator Galvez.

My question is related to the bill in the same sense as Senator Plett’s. It is exactly the same situation. We need to be fiscally responsible, and we need to fight inflation. If there were no points of order on Senator Plett’s questions, I do not understand why my question would be the subject of a point of order.

Will it be important to advance this idea of moving forward with mandatory reporting on the climate-related financial risk?

I am sorry, Madam Minister, the time has expired.

Welcome, minister. We’re pleased to have you here with us.

Bill C-30 is obviously welcome, and I will vote to support it. I do think this is a bit of a weak measure, however, when you consider the significant increase in the cost of groceries and transportation, and the increase in government revenue from the GST. As you know, GST revenues have increased by almost 50% in one year. This increase is partly linked to inflation and represents roughly five times the cost of your bill.

Minister, has your department considered anti-inflation strategies targeted directly at prices, such as a temporary reduction in the GST and certain energy taxes?

France has experimented with similar kinds of measures and, according to its National Institute of Statistics and Economic Studies, they have had a meaningful and significant impact. France’s current inflation rate is 5%, not 8%.

In your opinion, should the federal government use such interim measures to reduce the rate of inflation caused by temporary problems in the supply chain?

Thank you for your question, senator. I want to begin by saying thank you for your support of this bill. I also share your concern because, over the past few months, it’s been difficult for our government to strike a balance between compassionate support for those who need it the most and remaining fiscally responsible. We have kept that balance in mind during every decision we have made.

You asked me whether we had considered other potential measures to combat inflation.

In our view, the primary measure in our type of economy, in our institutional system to fight inflation, is the work of the Bank of Canada. Our government has great respect for the importance of the Bank of Canada. To help the Bank of Canada, we need to respect its institutional independence and demonstrate fiscal responsibility. That is the balance we have tried to strike, and we believe that in Canada, those are the most important tools that we can use.

Of course, I understand your point of view, but lowering the GST would have reduced the rate of inflation and supported the work of the Bank of Canada. In this state of affairs, the economic costs of the current strategy to fight inflation could be high and there’s no guarantee that it will work. One thing is certain, the current monetary policy has cost 110,000 Canadians their jobs since August and EI costs will increase.

Will the federal government decide to start paying into the EI fund again as it did until the 1990s, especially since there may be a downturn on the horizon? Wouldn’t that be a fairer approach? At present, only employers and workers pay into the fund.

Thank you for your question. I think that our EI program is a very important component of our support system for the most vulnerable and for all workers.

Given the uncertainty in the global economy, it is very important to have a solid and well-funded EI system. That is why our government doesn’t support lowering premiums. We believe that, at present, given the fragile global economy, which the managing director of the International Monetary Fund spoke about today, it’s important to have a well-funded EI system. You’re right. My colleague, Carla Qualtrough, spoke to the House of Commons about this today. We’re currently examining the EI system. We plan to modernize it, and I believe everyone supports that.

Deputy Prime Minister, a chief responsibility of government is to help those who are struggling, the most vulnerable. Doubling the GST tax credit for six months will have a positive impact for those living on a fixed income. Obviously, the rising cost of living affects everyone, but those living on a fixed income and those hovering near or below the poverty line feel it the most. There is an immediate need to support people in those categories.

We see the impact of inflation everywhere, not just at the grocery store and the gas pump. It’s my understanding that this bill is targeted to provide relief to those most in need, and it can’t come soon enough.

Could you please tell us if this measure of relief is means tested — I assume it is — and do you have a sense of what percentage of Canadians will qualify for this temporary enhancement?

Thank you very much, Senator Klyne. Maybe I’m mistaken, but I believe this is the first time we’ve spoken in the Senate. It’s very nice to talk to you.

I agree with you very much, senator, that this relief is needed by people. That’s why I am grateful to all the MPs in the House of Commons who decided to support the measure so we were able to move it through quickly, and I am grateful to everyone here. You are all working late at night and interrupting your regular schedule to get this job done, and I’m sincerely grateful.

Part of our effort to make it possible to get that support to people quickly was to make a conscious decision not to reinvent the wheel. We used a pipe that already exists in Canada to support the most vulnerable, and that is the GST tax credit. We decided to double it for six months to give that extra support. That is what we’re doing.

The means test through which the GST tax credit is ordinarily provided applies in this case as well. It should be 11 million households.

I have no problem with the GST rebate proposed in Bill C-30. I think Canadians deserve one-time support to help them through the tough times we’re experiencing. One thing is certain: Sending cheques to 11 million people will certainly help families. However, since the measure is going to cost $2.5 billion, I’d like to know if this expenditure will be added to the deficit or if it will be financed by the surplus of taxes that the government collects because of inflation-related price increases. Let’s face it, inflation is good for the government.

Thank you for the question, and thank you for supporting this bill. I agree with you that this measure will help many Canadians.

On the subject of finances, the fact is that the Canadian economy has been very strong this year. We’ve had the strongest growth in the G7, and that is real growth. I travelled extensively across Canada this summer, and when I talked to businesses and workers, everyone told me they just couldn’t produce enough for their customers. We have lots of customers here in Canada and abroad. I would say that is a good thing.

As Minister of Finance, I hope that all of you, as Canadian senators, agree with me that a strong Canadian economy, a growing economy, is a good thing. I am very pleased with how the Canadian economy is growing. Government revenues are growing too. You’re right; that’s what we’ve been seeing since the beginning of the fiscal year. From April to July, we recorded a $6.3-billion surplus. At the same time, I know we have a lot of expenses. I am keenly aware of the importance of fiscal responsibility, and I also have to tell you that I’m paying very close attention to global economic uncertainty, as are our Department of Finance officials. I believe that a responsible fiscal stance is more important today than ever.

In addition, it is clear that the Bank of Canada is reacting to high inflation by raising interest rates, and the effect on the economy is already being felt. The economy has clearly slowed down, and this will obviously have a fiscal impact.

Senator Dagenais, you have approximately one minute left.

I will yield the balance of my time to Senator Patterson.

Thank you for being here, minister. We all agree, I’m sure, with your statement that Bill C-30 should deliver tax relief to the Canadians who need it the most. Yet — and this was raised earlier — you have to file a tax return to get the benefit. But we know the rate of non-filing is highest amongst economically vulnerable communities. That’s especially true in the North. Research shows that the non-filing rate in Nunavut, in my region, is estimated at 28.5%, the highest in Canada. I think this is partly because tax returns are not in the first language of the majority — Inuktitut — or of the many who are unilingual.

Will your government consider providing support services from Inuit personnel — this has been put in place by the Canada Revenue Agency, or CRA, in the past, but was discontinued — to encourage unilingual residents, those who are linguistically challenged or those who don’t speak the official languages to be able to file tax returns and thereby qualify for this important benefit?

Well, senator, that is a really good and important question. As I said, in thinking about and making a choice on how to provide this support, we made what I think is both a practical and a right choice of “Let’s not reinvent the wheel; let’s use the pipe we have.”

However, I absolutely agree with you that there is a significant downside, namely, the one you have identified. You have identified a really particular problem for the people you represent. I hope you’ll agree that our government — at this point, frankly, I think it’s all Canadians — understands the importance of reconciliation and the duty we — non-Indigenous people, in particular — have to support Indigenous people and to include them as fully as possible in everything. So you make a very good point.

I can assure you that I hear you and this is duly noted by both me and our team.

Thank you, minister. CRA made that work in the past. They provided convenient, accessible services, sometimes over the phone. It would be great if that could be revived.

Your government did recognize this hurdle in the Canada Emergency Response Benefit, or CERB, program, which didn’t require the filing of a tax return. Hopefully, we can encourage more Inuit to file tax returns, which will provide revenues to your government and also allow them access. They are usually the folks who most need it.

All I can say is that is an excellent point. It is duly noted. We heard it earlier today.

The CRA has been doing a fantastic job since COVID first hit Canada. It turns out to be an effective way to help support Canadians. The GST rebate is another example of that. Together, the more we can make it easier for Canadians to file tax returns and to understand that it can be a path to getting the support that you deserve and that you’re eligible for, I think the better.

I welcome your question. We have noted it. It’s a question also to the CRA, so it’s noted.

I understand. Thank you. I will yield to Senator Tannas.

Minister, if people took this opportunity to file their income taxes in order to access this benefit and future benefits, is there retroactivity? Is there a cut-off in that if they don’t file their taxes by a certain day, they won’t get it? What kind of window is there by which people who haven’t filed their taxes could do so and still receive this benefit and any future ones?

People can file now to be present in the system and get the benefit. To the point about future benefits, they will be eligible for future benefits too.

I want to point out one quick thing. I’m going to take an opportunity to plug a very important benefit people really need to be aware of, which is the Canada Workers Benefit. This is another huge support for low-income, working Canadians. Even if you don’t owe us tax, please file so you can get that support that you deserve.

Minister, I note that the bill before us today is accompanied by a Royal Recommendation. This means that the bill authorizes new charges for purposes not anticipated in the estimates.

The Main Estimates were tabled on March 1, the same month that Statistics Canada reported a 6.7% rise in inflation. Supplementary Estimates (A) were tabled on June 7, the same month that inflation hit 8.1%. Yet, neither of these estimates contained any mention of the spending initiative before us today.

Minister, can you tell us why your government could not see this spending crunch coming for Canadian families? Can you also tell us exactly when your government finally realized that “JustinFlation” was hurting our most vulnerable citizens?

Honourable senators, you are here working tonight. It’s almost 7 o’clock on a Thursday night. I think we’re all here to support Canadians. I think we all understand that this is a very challenging time for Canadians and for Canadian families. We all understand that inflation is a significant challenge.

As we saw inflation rising as the economy reopened following the COVID closures and what the global economy did, my objective and our government’s objective was to try to strike a balance between maintaining fiscal responsibility — not making the problem worse and not making the Bank of Canada’s job harder — while, at the same time, providing some relief to the people who needed it the most. This measure is part of it, but it is far from the only thing.

I spoke right at the beginning about the fact that dental care is going to be really important for young families. The housing benefit is also going to be really important. The housing benefit and dental care were both something that I talked about and made provision for in the budget in April. I just spoke to Senator Tannas about the Canada Workers Benefit, which kicked in at a higher level in April. That is another important source of support, as is the Old Age Security, or OAS, pension going up by 10% in July.

There are a number of programs and additional support measures people are getting this year as inflation has been elevated. I am glad about that and I’m glad we’re doing a bit more now.

The one-time help contained in Bill C-30, which Conservatives support as welcome relief for families, is for $467. The average family of four is now spending over $1,200 more each year to put food on the table, not to mention the rising costs of heat, gasoline and rent. Grocery prices are up by 10.8%, rising at the fastest pace in 40 years.

Minister, what assurances do you have that, once that $467 has been spent by families, inflation will have been beaten?

Senator Martin, in my opening remarks and in all the opportunities I’ve had to speak to Canadians about this, I have intentionally been candid with Canadians. I have said that this is inflation relief. This is not and does not claim to be a measure that will compensate every single Canadian for all of the additional costs that people are bearing in this time of elevated inflation.

The fact is we need to find the balance between some compassion and some inflation relief while also being fiscally responsible.

I think Canadians really are smart and do understand that it is actually impossible for us to compensate everyone for everything. If we were to try to do that, it would be a Sisyphean struggle, and we would be making the Bank of Canada’s job not only harder but impossible.

So that’s not what we’re setting out to do. We’re setting out to provide some extra support for people who really need it and, at the same time, chart a fiscally responsible course, which will mean that the fiscal policy is not running in opposition to monetary policy.

Under Bill C-30, a family of four earning more than $58,500 for a couple with two children will receive no benefits. Minister, what do you tell those families? Is a couple, each making $30,000 a year, with two children, considered too rich by your government to be a part of the middle class?

As I said, what we have sought to do with this measure — and I am grateful to all the senators who will support it — is find that balance between compassion and fiscal responsibility. That has meant targeting the support to the people who need it the most. This measure does cover 11 million households, and I’m glad we’re able to support those households.

I would also say, senator, that there are other measures in place in Canada to support families. I am a big proponent of the work we have done together now with every single province and territory in Canada, regardless of political affiliation, to create a universal early learning and child care program.

You spoke about family, senator. Canadian families across the country will have a 50% reduction in child care fees. That is a real affordability measure. I’ve talked to a lot of families who say that child care is like a second mortgage. We are lowering that second mortgage by 50%. That will help.

Again, I want to speak again about the Canada Workers Benefit. There are a lot of middle-class families who are working hard, and the Canada Workers Benefit gives them an added boost. It has been increased a lot this year.

Back on April 27, Tiff Macklem admitted to senators on the Senate Banking Committee that “. . . we got a lot of things right and we got some things wrong . . . .” Since that date, every news release issued by the Bank of Canada has made clear that its number one priority is to tackle inflation by reducing aggregate demand.

Minister, how do you square the Governing Council’s level of intense commitment to achieve the 2% target with Bill C-30?

Thank you very much, senator.

Of course it is the case that the press releases of the Bank of Canada focus on the inflation target. We renewed at the end of last year the mandate that the government gives to the Bank of Canada every five years, and we reasserted the centrality of targeting and fighting inflation as the Bank of Canada’s central mandate. That is the Bank of Canada’s job. Our government very much understands and respects the independence of the Bank of Canada.

I actually believe that today, at a time of real uncertainty in the global economy, understanding the value of institutional stability in Canada, including the Bank of Canada, is of great importance. That’s why our government absolutely takes that position.

In terms of this measure, as I said at the outset, we are very confident that it fits within our fiscally responsible framework. The incremental cost of all of our measures is 0.1% of Canada’s GDP. We were very careful about that.

Thank you for joining us, minister. Thank you to you and your associates for all the work you have been doing during this time and beyond that.

As you have said tonight and before, Canada can afford to be compassionate to the most vulnerable among us. I agree, and I believe you share the concern that, unfortunately, as you have already acknowledged, this won’t meet the needs or reach everybody in need. Significantly, Bill C-30 contributes to a patchwork of services within the Income Tax Act that still leaves some poverty-related issues unaddressed.

I echo the concerns raised by Senators Patterson and Tannas that, for those who are the most economically impoverished, the challenges of tax filing for benefits claims can be prohibitive. We look forward to the additional supports you mentioned to them that you are looking at, in addition to assisting those currently not on the tax rolls.

My question is related to that. The last time that Canada had a major tax reform was in the 1970s. The age of the Income Tax Act, if I can be so bold, is showing. What steps are you and your government planning to take to consider modernizing the income tax system to make it more equitable and user-friendly?

I can’t resist trying a little joke here. I was actually born before the 1970s, and it concerns me a little bit that we would consider something born in the 1970s to be “aging.” That’s just a joke.

I do take your point, and I guess the aging applies to someone born, like me, in 1968 as well. That is just a moment of levity.

You talked about there still being poverty in Canada. That’s an important point to make. It’s very characteristic of you to bring that to the fore. Our government and I take it very seriously. We have been working to put measures in place that will bring Canadians out of poverty. The Canada Child Benefit is a really important measure, and it has lifted around 300,000 Canadian children out of poverty. That’s important.

I agree with you, though, senator, that there is work to be done on our tax system and our social safety net. We’ve also had some discussions about EI.

So I agree. I’m happy to continue the conversation with you and other senators who are interested in that work.

The law commission has been reinvigorated. It strikes me that a very good project for the reinvigorated law commission to look at is the whole tax system, including everything from, as was alluded to, tax evasion, offshore, beneficial ownership and many of the other issues that contribute to inequality.

Duly noted. I will point out — and I know you’re well aware of this — that in the budget in April, a number of measures were put in place — very careful, targeted and smart — to close some very significant tax loopholes in the Canadian system.

Again, I would be the last person to claim that the work is complete. But on the tax side, the April budget did some really important work there which will help to ensure that everyone is paying their fair share in Canada.

Yes, it is a very good point, Senator Coyle. I am not here to make news or announce any new programs. We think about them a lot. But I’m not here to announce those. So I’m not going to do that.

I will take the opportunity that your question provides to just mention the housing benefit and dental care. The housing benefit is a one-off payment specifically targeted at people who are renting. Many people who rent are among the most vulnerable, and rents have been going up. So I do hope that senators will look at that with understanding as being part of the same effort.

I want to make a bit of a pitch also for dental care for kids under 12. I do not know about you, but again I spent the summer travelling a lot across the country and talking to a lot of people in smaller environments. I found there was really strong support across the country, in many different groups and communities, for this idea.

I feel that once it was put on the table, to actually say, are you really against the idea that kids under 12 should be able to go to the dentist, regardless of how much money their parents pay? It is sort of hard to argue that side of it.

I hope we will provide that support. It speaks, senator, to your point that we’re sort of dealing with two things. We’re dealing with an immediate affordability challenge. We are talking today about a targeted measure to support people through that. But I do agree with you that there are a lot of Canadians who have challenges all the time. It is the right thing for us to try to support them.

Finally, for many Canadians, the most important support is a good, well-paying job. I think about that a lot as well. A big focus for me during COVID was to not allow our economy to be scarred and not allow the people who lost their jobs right away to become permanently unemployed. I think that is a tragedy and a blight for people and their families.

I do think part of the job of the government, of the House of Commons and the Senate is for us to be thinking as well about ensuring that we’re working to build a Canadian economy where there are lots of dignified, good-paying, steady jobs for everyone who wants one, and that people have the training they need to do those jobs.

I will say, yes, you are right. We are supporting our partners in the Global South. I will say one way to support our partners — direct support is important. A lot of work is being done on food security. My colleague Minister Sajjan is very engaged in that. Next week I will be at the IMF-World Bank meetings where I know that this will be very high on the agenda.

I will also say that a huge part of the problem with food security and high energy prices is Putin’s illegal invasion of Ukraine. Helping the Ukrainians to win quickly and end the war is going to not only save a lot of suffering in Ukraine but also help the whole world.

Thank you, Minister Freeland. A new Leger survey indicates that one in five young Canadians is either delaying or has given up on their dream of ever owning a home. With inflation and interest rates rising and the hopes of Canadians plummeting, this dream-killing Trudeau government is a far cry from the sunny ways of 2015.

Bill C-30, which is supposed to provide relief from the skyrocketing cost of living by increasing the GST credit, obviously took these huge inflationary pressures into account.

So as Minister of Finance, I’m sure that you will know this off the top of your head: How much does “JustinFlation” cost the typical Canadian family?

Well, thank you for the question, senator. I am going to address the housing part of your question because I think that it is really important.

The April budget focused a lot on housing. There is a housing challenge in Canada quite separate from the impact of the COVID recession and its after-effects.

The good news about Canada is that we have a growing population. That is great. That is important for our economy. It is good for our society. But we are not building enough homes to keep up with that growing population.

So in our budget we put in place a number of measures which are designed to drive an increase in the supply of homes, in the building of more homes in Canada. That is something that we are absolutely committed to, working with provinces, working with municipalities. From my perspective, that is the core of Canada’s housing challenge and that is something that we are very committed to addressing.

Thank you. My question was actually how much inflation cost a typical Canadian family, but I’ll move on.

Minister Freeland, regarding GST, it is actually shocking that your government charges GST on top of the Trudeau carbon tax. How much will your government rake in from all of that extra tax? What about when your Trudeau government triples that carbon tax? The only promises that your government seems to keep these days are those that pick Canadians’ pockets, which is why I have no doubt that your government will actually keep that commitment to triple the carbon tax on Canadians’ heating bills, gas and groceries. Minister, how much more will your government’s heartless tax hike take from struggling Canadians?

Okay. Well, I guess we’re talking about the price on pollution, and I’m happy to do that.

The GST, actually.

I want to talk about it from a finance minister’s perspective.

I know Senator Tannas is an Alberta senator. This is something that I actually believe is really understood today in Alberta. It’s really understood in our oil and gas sector and it’s understood across the country that the green transition is real. Our major partners around the world have decided to go all in on the green transition. The EU has been doing that for some time. The United States, with the Inflation Reduction Act has really gone all in as well.

Strictly from an economic point of view, we really need to recognize as a country that these guys are our clients. They are our markets, and they are all in on the green transition. My belief is that to build an economy for today and for the future, Canada has to be there, too, to ensure that our markets and our customers are there for Canada.

I really believe that when it comes to the green transition, we need to understand this is a shift comparable in scale to the Industrial Revolution itself. It is going to take a lot of private capital investing; it is going to take a lot of government investment, and we have invested a lot already. The price on pollution is part of that shift. It is the most economically effective way to accomplish that transition. In fact, in the parliamentary elections in 2021, the Conservative Party campaigned on a price on pollution.

Well, yes, that was quite some time ago. And, minister, we’re not talking about a climate plan. We’re talking about a tax plan and a massive one at that.

Minister, the short title for your Bill C-30 states it is for targeted tax relief. But here is what it certainly does not relieve — a family living in rural Nova Scotia who needs to heat their home in the dead of a brutal Atlantic winter, who needs to feed three teenagers groceries every week and who needs to fuel their vehicle not only to get to their jobs but also to take their kids to hockey tournaments around the province on weekends. They cannot bike to work or send their kids on a subway or public transit system. How much does the Trudeau carbon tax cost that rural Nova Scotian family right now? And, also, how much will it cost when you triple that Trudeau carbon tax on the family’s heating bill, on their gas and on their groceries?

Minister, you claim you want to get this money under Bill C-30 to vulnerable Canadians right away, but how much will you ultimately just tax away by tripling the Trudeau carbon tax on their gas, heat and groceries?

Well, I think all of us in this room are agreed — it seems like it; I have heard from most people — on supporting this specific inflation-relief measure, and I’m glad about that.

At a time of a lot of partisanship and acrimony, it was a good moment today in the House of Commons when there was unanimous support for this measure. But I do think, senator, that you and I will need to agree to differ when it comes to the urgency of climate action and the effectiveness of a price on pollution as part of the way that Canada gets there. Someone, though, who does agree with a price on pollution as an important measure in that effort is Preston Manning. He was one of the people who initially advocated for it.

Partisanship is part of our political system, and I recognize that, and I think our political system works. But I would urge us all to think about a price on pollution in a non-partisan way and to think about it as a mechanism that will help our whole country in the most economically effective way possible to accomplish this huge and really necessary economic shift.

Minister, answering questions from a parliamentary body should also be an important part of what we’re doing here.

Your Bill C-30 is just one small step in addressing inflationary pressures and huge cost-of-living increases. These financial hardships are also taking a major toll on the mental health of Canadians. This is Mental Illness Awareness Week, and so it’s timely to ask you about your government’s election promise to establish the Canada mental health transfer.

Your corresponding commitment in last year’s election platform was to fund it with $4.5 billion over five years. Minister Freeland, your Liberal platform provided a detailed year-by-year costing of that Canada mental health transfer. It stated that $250 million would be provided in the 2021-22 fiscal year and $625 million in this fiscal year. But, minister, the budget you presented this spring did not contain even $1 for that Canada mental health transfer. You’re already $875 million behind.

Minister Freeland, why did you choose to break your mental health election promise and not put it in your budget?

Well, I feel like we have travelled quite far from the inflation relief measure that I am here to discuss with you, but I am very happy to talk about mental health because it is a priority for our government. Again, here, I think that there is wide recognition across Canada of the importance of mental health. I think of the particular strains that COVID posed on the mental health of Canadians. Our government has invested significantly in supporting Canadians with their mental health since we formed government in 2015. We are absolutely committed to doing more, and we absolutely will.

But, minister, your government has proven to be all talk and no action on this issue. We’ve had a pandemic for two and a half years with isolation, mental health and addiction crises, job losses and business closures. Now Canadians are facing rampant inflation and struggling just to make ends meet. The time for mental health action is now. Your government doesn’t hesitate to spend billions of dollars when it deems it a priority. You’ve talked a lot about compassion tonight but your Canada mental health transfer promise is clearly not a priority at your cabinet table.

As the Minister of Finance, you control the purse strings. Why didn’t that crucial commitment to the mental health of Canadians make the cut in your budget?

Thank you for being here, minister.

I think that, as you say, you didn’t reinvent the wheel, which will allow us to be more diligent and respond more quickly. I agree with Bill C-30, which will affect 11 million people. You haven’t reinvented the wheel, but you’re missing a spare tire.

I’m deeply concerned about the fact that currently 10% of Canadians don’t file their tax return, which means we won’t be able to reach them. I worked in the trenches at the municipal level for 26 years and those 10% probably represent the least fortunate and most marginalized people.

Shouldn’t the government make it a priority to make an extensive effort from coast to coast to coast in Canada to reach these people? I believe in the collaboration of the entire community sector, municipalities and all the stakeholders striving for the same goal. However, shouldn’t we try to identify and join these people who are the most marginalized and the most vulnerable in our society in order to help them?

Thank you for the question, senator. I’d like to start by thanking you for your support of this bill, thank you very much.

If I could just clarify one small thing, it is not just 11 million Canadians that will be helped, it is 11 million households. That means we’re reaching a much higher number of people, and that is a good thing.

However, you’re right, and you’re not the first senator to raise this issue of the most vulnerable. I’d simply say that I agree with you; we all need to work together to include those who are the most fragile and vulnerable.

Now to explain the approach we chose. We decided that it was important to do something effective that could be implemented very quickly. That’s why we chose a mechanism that was already in place. That said, you asked an excellent question and I, along with my colleagues and Ms. Lebouthillier, will work on that.

You know, minister, that is a challenge for Canadian society. For example, I often can’t finish my dinner, and it’s not because I’m particularly generous. When I order a meal and I have leftovers, I take it over to the homeless people. Today I took my leftover pasta to the people under the walkway next to the Senate. I asked them a few questions. None of them had ever submitted an income tax return.

It is a challenge for our society, for the government and for all stakeholders. It is well beyond the scope of the program, which is very effective. That’s why I’ll vote for it. So much the better if it helps many more than 11 million people. However, one thing that needs to be on the agenda — and I think this should be the government’s responsibility — is that helping the most marginalized members of society is our responsibility as human beings. I would really like us all to think about that. How can we help? We have to take concrete action to help the groups we’re not reaching, not hearing from, not seeing. We need to reach the people who don’t even send in tax returns.

All I can say is that I agree with you wholeheartedly. We need to do this work. During the pandemic, we as a government found out that the Canada Revenue Agency is really an effective department to help Canadians. That’s a good thing, but even though we discovered that, I think you’re right that we need to take the next step. It is clearly an effective department with effective tools, but we really need to do the work to make sure that all Canadians feel included. I agree with you. We have work to do.

Good evening, minister. Welcome to the Senate. The Prime Minister said back in 2016 that poverty has a greater impact on women than on men. I agree with him. Since 1995, the Government of Canada has been committed to using Gender-Based Analysis Plus when developing legislation, programs and policies. That commitment has since been renewed by this government. We know that GBA+ is used to assess the potential impacts of a bill on women, men and people of various gender identities. Was such an analysis conducted when Bill C-30 was being prepared for the memorandum to cabinet?

What I can say is that we conducted an analysis of this measure and we’re convinced that women — especially single mothers — will really benefit from this measure being adopted. As far as single women are concerned, this measure will help single mothers and it will help seniors as well. As you know, among our seniors, there are more women than men. Senior women are more likely to end up in poverty.

Since this is a measure that targets the most vulnerable and because there are more women in this most vulnerable category, you are right to say that this measure will target women. I would say that it will also target children. That’s why I also talked about households. Obviously children are not individuals that the Canada Revenue Agency has direct contact with, but they will benefit from this measure.

At the Standing Senate Committee on Legal and Constitutional Affairs, the Minister of Justice agreed to submit, at our request, not the complete text of the Gender-Based Analysis Plus, but a summary of the important elements of the analysis, in order to inform the committee’s study of the bill.

Will you undertake to table what the minister called a summary of the elements contained in the gender-based analysis of Bill C-30 to help us with our study of the bill?

Senator, could my office and I follow up with you directly? I wasn’t there when Minister Lametti appeared before your committee, but we could follow up with you to understand what specific information you would be interested in.

Thank you.

Thank you very much, minister, for being here this evening, and thank you also to your officials for the work that you all have been doing to help those most in need. You have also been very generous this evening about answering questions that are not related to the bill. Thank you very much for that.

When you are this close to the end of the list, most of the questions — if you could see my note pad here, there are scratches and editing along the way.

Minister, as we heard during the study of Bill C-12, which was another bill that boosted Old Age Security benefits this past winter, we learned that Canada Revenue Agency, or CRA, cannot do any preparation work until a bill has actually passed. Has CRA provided a timeline of how long it will take — if the bill receives Royal Assent — until the department can make the changes? Basically, my question is about how soon Canadians who qualify can receive payments?

It is an excellent question. It is one we have been much seized of. Thank you for thanking the officials who have been working really hard. I would like to offer a little bit of a plug for the people who work at CRA and for Minister Lebouthillier. The CRA has been the workhorse of supporting Canadians during the pandemic. When we looked around to see what tools were at our disposal for providing some inflation relief, we turned to this mechanism that existed and to the CRA, which was really reliable and effective at providing the support.

You are right. It is a challenge that the CRA can only get to work once the law is passed. Canada is a country founded on the rule of law, and they need to know that we, as legislators, have passed legislation to enable it. I’m glad to have the support here.

Let me just say this: We — actually, Mr. Jovanovic and our tax people — have a very good, close working relationship with our counterparts at CRA. Obviously, we worked with them closely in determining that this was going to be the fastest way to do it, notwithstanding the real challenge of it not covering every single person.

They are going to work hard. They have told us they are going to do this as quickly as they can. This is the mechanism that — of all of the different possibilities we discussed — is absolutely the quickest. They are going to work hard to have it happen really soon.

Thank you, minister. Since others have gotten off the topic of Bill C-30, let me say that I am very supportive of the dental plan for children under 12. I guess it is because I used to be an elementary school teacher in my other life, and dental health is good health.

Minister, at committee hearings in the House you noted that Bill C-30 is not going to be a cure-all, and we all understand that. It’s a help but it isn’t a cure-all.

Can you tell us what you think this one-time payment will do for those who need financial help?

Senator, you’ve mentioned dental care, so I’m going to take an opportunity to mention it, too. I think it is a really important measure, and we’re going to find that it has an impact beyond what we may have imagined. A doctor I spoke to about it today, talking about this measure, made a very important point, which is the mouth is the centre of a lot of our health and our health problems for the rest of our body. It sounds as if, as a teacher, you encountered that.

Let me in advance urge people to look at the dental health measure from that perspective. We’ve been talking about inflation and the immediate relief Canadians need, but we have also been talking about the fact that there are some long-term measures people need, and dental care is one of those.

Thank you for being so sensible and recognizing what I think we all recognize, which is that this is a good measure. It’s an important measure. I’m glad we’re doing it and doing it quickly.

Welcome, minister. I stand between you and the rest of your Thursday evening, which I hope will give you some downtime and relaxation.

You have been clear about how this bill is about relief for targeted groups to deal with cost-of-living issues in the wake of rising inflation. You’ll be aware that there is a growing discussion also about how efforts to combat inflation might be excessive and might lead to an economic downturn, perhaps less so in the United States and in Canada but certainly in the rest of the world, particularly developing countries. This is an issue that I know is monetary policy and not your domain, and it’s also principally driven by the Federal Reserve that has become ultra‑hawkish. You, as our Minister of Finance, meet regularly with the finance ministers of the G7. You have been meeting, I think, maybe with the G20 finance ministers. You are going to the World Bank-IMF meeting very soon.

What are you saying to them about overtightening, about broader risk to the system as opposed to simply dealing with the problems of your own country and being short-sighted about it? I’m worried about beggar-thy-neighbour policies and how they might affect the world and ultimately ricochet back to Canada.

That’s the question that should have been the first one and we should have had five hours to discuss it. It’s a very smart question, and you have touched on a lot of the issues, senator, that I think anyone thinking about the Canadian economy and Canadians needs to be thinking about.

I will be travelling to Washington next week for the IMF‑World Bank meetings. It’s a good time for the finance ministers of the world’s leading economies to be getting together for two reasons, both of which you identified. The way I like to think about it is that what’s happening right now is we are landing the plane of the COVID economy. When COVID hit, we had this unprecedented thing of the rich countries of the world closing down and providing unprecedented support: COVID recession.

Then we had the reopening with the inflationary pressures that came as part of that, exacerbated by the war in Ukraine, by Putin’s invasion of Ukraine. We’re now in the third act of the COVID economy, and that is dealing with the inflationary pressures and the economic slowdown that the central banks’ work of dealing with those inflationary pressures is creating. Exactly as you say, that work is happening in a global economy, where what each country does has a real impact on everyone else.

Speaking for Canada, it’s important for us to coordinate with our partners, and I will be doing that next week and I’m glad to have that opportunity.

Speaking for Canada, from my perspective, one of the things we need to do is keep our powder dry. I think this is a moment to recognize that there is a lot of uncertainty in the global economy and Canada needs to be really ready for that.

The good news I would say to all the senators and to Canadians is we are in a strong fiscal position and in a strong economic position, particularly comparatively. We do have the lowest deficit in the G7. We do have the lowest debt-to-GDP ratio in the G7. Our job recovery from the COVID recession has been remarkably strong.

I don’t in any way want to downplay the challenges of today or the challenges of the future, but maybe I can close on a note of optimism, reassuring us all and the Canadians, who I’m sure are tuned in in their millions tonight, that Canada is facing these global storms from a position of fundamental economic and social strength.

Honourable senators, the committee has been sitting for 95 minutes. In conformity with the order of the Senate, I am obliged to interrupt proceedings so that the committee can report to the Senate.

Minister, on behalf of all senators, thank you for joining us today to assist us with our work on the bill. I would also like to thank your officials.

Hon. Senators: Hear, hear!

Thank you, Madam Chair, and every other senator as well.

Thank you very much for your hard work and the really careful and thoughtful questions. I appreciate it and I’ve noted many points, as I mentioned during my answers.

Honourable senators, is it agreed that the committee rise, and that I report to the Senate that the witness has been heard?

Hon. Senators: Agreed.

Honourable senators, the sitting of the Senate is resumed.