Income Tax Act
Bill to Amend--Second Reading
February 10, 2026
Second reading of Bill C-19, An Act to amend the Income Tax Act.
He said: Honourable senators, It is a privilege for me today to take part in our initial debate on Bill C-19, the Canada Groceries and Essentials Benefit Act.
As the sponsor of this bill in the Senate, I’d like to thank the Minister of Finance and National Revenue for entrusting me with this responsibility. It is an honour because I strongly believe that the targeted financial support provided for in this bill will make everyday essentials, such as groceries, much more affordable for Canadians who are still struggling to make ends meet in the wake of the recent period of inflation.
In this regard, the bill’s intent is singular and focused, and its structure is effectively designed to achieve its goal of targeting relief to those who truly need it most. That is because it is based on, and builds upon, the solid foundation of the existing Goods and Services Tax credit, commonly referred to as the GST credit. The prominent economic analyst Claude Lavoie in The Globe and Mail article entitled “The good, the bad and the puzzling of Carney’s new GST rebate,” published on January 29, 2026, wrote the following with respect to the GST credit:
Many see it as an ideal stimulus measure because it satisfies the three standard criteria: targeted, timely and temporary. The benefit flows to low-income Canadians who are more likely to spend it rather than save it, making it more potent than broad-based tax cuts to stimulate the economy. It can be rapidly delivered through existing systems, providing faster economic support than infrastructure spending which typically suffers implementation delays. And by being time‑limited, it avoids creating permanent fiscal obligations and creating inflationary pressure when economic conditions improve.
This analysis continues by pointing out:
Many economists also view it as an effective way to improve financial security for lower-income households and enhance the progressivity of Canada’s tax and transfer system. The Affordability Action Council, for instance, identified the GST/HST credit as the federal government’s best option for reaching vulnerable families. In 2023, the council proposed restructuring and expanding the credit to deliver more income support amid elevated food and shelter costs. Available analysis suggests recipients do indeed use the additional funds for household necessities — food, rent and heating — as intended.
Indeed, honourable colleagues, the Affordability Action Council was just one group amongst many working to address issues of affordability who favoured using the GST credit mechanism to deliver targeted financial support to those who need it most.
Right To Food Canada, for example, is a national organization whose mission is to transform the way we address food insecurity through an innovative, dignity-first model. Working with its 450 partners across the country, they accomplish this by creating and supporting community food centres, working to strengthen the community food sector and advocating for policy change.
As part of this advocacy, Right to Food Canada, in collaboration with the Affordability Action Council and in consultation with food security and poverty reduction organizations across the country, actually called on the federal government in October 2025 to use the GST credit mechanism to create a groceries and essentials benefit.
So it is not surprising that, when the Prime Minister announced the new Canada groceries and essentials benefit on January 26, Right to Food published a statement confirming its support for the measure. The statement said the following:
With more than 10 million Canadians struggling to put food on the table, we welcome this announcement. For many years, Right To Food, our partners, and other leaders in the food security sector have advocated for a Groceries and Essentials Benefit to help people afford everyday needs, especially food. The announced 25% increase over five years, combined with a one-time 50% top-up in 2026, will provide meaningful short-term relief to individuals and families working hard to make ends meet.
This statement goes on to say, “This is a meaningful step that will make a difference to our neighbours who are under deep stress.”
Honourable senators, we can clearly see that those on the front lines of the fight against food insecurity and its related challenges support the new Canada groceries and essentials benefit. We can also see how professional economists recognize that the existing GST credit mechanism is well suited to ensuring that this assistance is properly targeted.
I’d now like to take a moment to talk about what the benefit will actually mean. To sum up, starting in the spring of 2026, it will help more than 12 million low- and modest-income Canadians meet their basic daily needs, subject to Royal Assent, of course. In practical terms, this will involve an additional $402 for a single individual without children, $527 for a couple and $805 for a couple with two children. Through this supplement, the Government of Canada will effectively offset the rising cost of groceries, which has exceeded the overall inflation rate ever since the pandemic.
This will involve two steps. First, a one-time top-up will be paid as soon as possible in the spring — no later than June 2026 — equal to a 50% increase in the annual 2025-26 GST credit amount. This measure will provide $3.1 billion in additional support to individuals and families currently receiving the GST credit.
Second, the value of the Canada groceries and essentials benefit will increase by 25% for five years starting in July 2026. Gradually, over time, this increase will deliver $8.6 billion in additional support over the 2026-27 to 2030-31 period to over 500,000 new individuals and families.
What does this mean in concrete terms for people facing affordability challenges? It means that a single senior with $25,000 in net income would receive a one-time top-up of $267 plus a longer-term increase of $136 for the 2026-27 benefit year, for a total increase of $402.
In total, thanks to the top-up, they would receive $950 for the 2026-27 benefit year. A couple with two children with $40,000 in net income would receive a one-time top-up of $533 plus an increase of $272 for the 2026-27 benefit year, for a total increase of $805. In total, with the top-up, they would receive $1,890 for the 2026-27 benefit year.
To ensure that people who need this support get it when they need it most, the benefit would be paid out quarterly, at the start of the quarter, to permit timely access to the funds. Also, these amounts are in addition to existing benefits such as the Canada Child Benefit, the Canada Disability Benefit and the Guaranteed Income Supplement.
Now, I fully appreciate that the issue of food affordability is a complex one. Its origins are rooted in unfortunate developments from well beyond our borders, like the COVID-19 pandemic, Russia’s illegal invasion of Ukraine, rising global protectionism and the increased use of tariffs, and extreme weather events caused by climate change, all of which contributed to significant supply chain and commodity market disruptions that have adversely impacted countries around the world, including right here in Canada.
This is a problem with dimensions both on the supply side, in terms of rising food prices, and on the demand side, in terms of individuals’ ability to pay, which rests on broader employment and economic conditions. But this is something that the government recognizes and is working to address. For example, when the Prime Minister announced the Canada groceries and essentials benefit, at the same time, he announced a range of measures aimed at bringing down food prices on the supply side. He announced, for example, that the government is setting aside $500 million from the Strategic Response Fund to help businesses address the cost of supply chain disruptions without passing those costs on to Canadians in the checkout line.
To that same end, in response to developments on the trade and tariff front, the Prime Minister announced that the government will create a $150-million food security fund under the existing Regional Tariff Response Initiative for small- and medium-sized enterprises and the organizations that support them.
To lower the cost of food production, the Prime Minister also announced that the government is introducing immediate expensing for greenhouse buildings. This allows producers to fully write off greenhouses acquired on or after November 4, 2025, and that become available for use before 2030. This measure supports increased domestic supply and investment in food production over the medium term.
To ease immediate pressures with food banks, the Prime Minister announced that the government is providing $20 million to the Local Food Infrastructure Fund. This supports food banks and other national, regional and local organizations to deliver more nutritious food to families in need.
To tackle the root causes of food insecurity, the government is also developing a national food security strategy, one that strengthens domestic food production and improves access to affordable nutritious food. This strategy would also include measures to implement unit-price labelling and support the work of the Competition Bureau in monitoring and enforcing competition in the market, including food supply chains.
But the government has also been clear that strengthening the demand side of the equation is also key to overcoming food affordability challenges. In this regard, the Canada groceries and essentials benefit builds on other important supports that the government has introduced to make life more affordable. This includes cutting taxes for 22 million middle-class Canadians, eliminating GST for first-time homebuyers on new homes up to $1 million, reducing GST for first-time homebuyers on new homes between $1 million and $1.5 million, cancelling the federal consumer fuel charge and making the National School Food Program permanent, to name just a few examples.
By building on these cost-saving measures with further temporary and targeted relief, the Canada groceries and essentials benefit can and should play a role in shoring up demand and in supporting our most vulnerable through affordability challenges. But the government has also — and I believe rightly — positioned the new benefit as a bridging measure to carry us through these challenges until its investments in growth kick in and translate to more jobs and rising incomes, which represent a permanent and enduring long-term solution to issues of food affordability.
The Prime Minister’s top-line message in this regard is fundamental: The government is building a stronger economy to make life more affordable for Canadians. The way forward for the government has also been made clear: It is committed to securing new trade and investment partnerships abroad and to building our strength at home to create good career opportunities with high wages for Canadians.
This is an important nuance to recognize and take note of, honourable colleagues. The government recognizes here that the Canada grocery and essentials benefit is not a permanent solution to issues of food affordability. Rather, it represents material financial support for those Canadians who need it the most while the government’s plan to build the strongest economy in the G7 takes effect. But this in no way undermines the importance of delivering the Canada groceries and essentials benefit for Canadians on a timely basis.
The Canada groceries and essentials benefit is the right measure to bring in, and now is the right time to do so.
The measures in this bill are supported by people working on the front lines of the fight to address food affordability issues.
Professional economists have recognized the GST credit mechanism on which the benefit is based as ideal for this type of economic stimulus, because it provides targeted, temporary support at the right time.
Because parliamentarians recognized these advantages, they decided to fast-track the passage of Bill C-19 in the House of Commons.
For all these reasons, I believe that the bill deserves to be passed quickly in the Senate as well.
Thank you, colleagues, for giving me the opportunity and privilege to advocate on this issue today.
Thank you. Meegwetch.
Would Senator Boudreau take a couple of questions?
Certainly.
Thanks very much. First of all, the Carney Liberal government finally brought forward its budget for 2025 on November 4, more than a year and a half after the last budget was tabled by the Liberal government. Now a major budget item involving about $12 billion is being put before us just a few months after that. Why didn’t the government bring this forward as part of its budget?
I thank the member opposite for the question. Obviously, Bill C-19 clearly deals with the Canada groceries and essentials benefit act. It doesn’t deal with the budget. That is a separate bill that was tabled in Parliament, in both houses, and is still being debated. I don’t think it’s my role to argue why it wasn’t part of the last budget.
The important thing is it is here today because Canadians need that support today. That support was clearly shown in the House of Commons by the fast-tracking of the approval of this bill, and I hope that the Senate will do the same thing.
Well, you are the sponsor of the bill for the government on this. I would like the chance to ask the Leader of the Government in the Senate these questions, but I don’t think he is giving a speech on this topic, so you are the person I have to ask to answer these questions on behalf of the government.
This is a major budgetary item. Are you telling me that the government never contemplated this when they were putting their budget together for over a year and a half or even in the six months before that, from the time the government was elected to the budget time frame? Why didn’t they include a $12-billion item in their budget?
I thank the member for the question. Again, I would remind my colleague that I am the sponsor of Bill C-19, so I am not the sponsor of the budget. I can’t speak to the budget. I can speak to Bill C-19 and what’s being proposed as part of Bill C-19.
It is an investment of over $11.7 billion over the next six years to help families and individuals most in need across our country. That’s why I wanted to be the sponsor of this bill in particular — because of its importance. Canadians need this help now. They need it as soon as possible. The government has committed to delivering these allocations as quickly as possible. That’s why they chose to take an existing program, an existing benefit, and build upon it, as opposed to trying to build something from scratch. They wanted to make sure that they were able to put these cheques into the hands of Canadians as quickly as possible, and that’s what Bill C-19 would do.
Would Senator Boudreau take a question?
Yes, certainly.
Thank you, senator. Thank you for your speech. I have a couple of questions pertaining to things you said in your speech.
First, you highlighted the various reasons we find ourselves in this dilemma where we have to take these measures in order to help Canadians who are definitely suffering and having difficulties. Of course, the opposition wholeheartedly supports the measures because we recognize the hardships that Canadians are going through, even though, from time to time, the government paints this rosy picture of how things are, a contrarian picture nonetheless.
You mentioned in your speech the various international causes of inflation and food inflation, but you didn’t mention a bad fiscal order, debt and deficits rising consistently for over a decade, which always have a monetary impact on fiscal policy.
You didn’t mention the fact that Canada has one of the weakest performances over the past decade with respect to foreign investment coming into the country, and Canadian investment is fleeing Canada at a rapid pace, which has a huge impact on the dollar.
No one seems to be talking about the fact that if your business is participating in any form of importing and exporting, in order to spend US$100 to buy a product, you need to spend C$135. That is probably one of the biggest driving forces affecting the cost of food. I would like you to comment on that.
You said the government is using this as a temporary measure, but this is the fourth time since 2022 we’re using this form of credit to help underprivileged Canadians. Bill C-30, Bill C-46 and Bill C-78 were all the same story of facing the same problem over the past four years.
My last question is this: Is this an indictment of the government and an admission that it has brutally failed in helping poor Canadians?
I thank my colleague for the question. The point I was trying to make, when I talked about some of the international factors that are at play and affecting us, is that the challenge we’re facing in terms of food insecurity and the rising cost of food isn’t just a phenomenon happening here in Canada; it’s happening in countries around the world because of multiple issues affecting them. It’s not just a problem in Canada or in any particular province or territory in Canada; it’s a global problem. With Bill C-19, the government is trying to find a way to address it.
Basing it on the GST credit was the fastest way to help over 12 million low- and modest-income individuals and families across the country. I would remind all my colleagues here in the chamber that the GST credit has been around since 1991 and has a proven track record of producing results. People who are eligible receive this credit four times a year. It’s easier to administer than some of the other tax regimes, credits and rebates that have been put in place over the years.
Bill C-19 is building and improving on it to quickly put money in the pockets of Canadians — as soon as this spring. With a decent-sized bump this year and a 25% increase for the next five years, it will give people the chance to get over the hump we’re dealing with right now — globally, not just in Canada.
The federal government has been putting measures in place to address some of these challenges, but doing so, like with any measure, will take time. This is meant as a bridge to help Canadians get to the other side.
Senator Batters, do you have another question?
Yes, I do.
I was watching when Prime Minister Carney was making this announcement on, I believe, January 26. He kind of looked back at his finance minister for confirmation, but I recall him saying it was going to be about $9 billion. However, on February 2, the Parliamentary Budget Officer costed this measure at $12.4 billion, and I think, near the end of one of your answers to me today, you stated the measure has an $11.7-billion cost. Why the large difference between these numbers, and what is the actual cost of this major program?
I thank my colleague for the question. To the best of my knowledge, the cost of this program will be $11.7 billion over six years. That’s the number that I received from the department in my briefing notes.
The difference between the $12.4 billion released by the Parliamentary Budget Officer and the $11.7 billion from the Department of Finance is due to a slightly different calculation by the PBO. The Department of Finance does not calculate the last quarter payment of the last fiscal year, but the PBO does. So that’s the difference of $600 million. That would be that extra quarter. So it’s really just the different ways they calculated it.
I have been assured — after asking the question multiple times — that 100% of the people who receive the GST credit today will receive the increases this year, and that number is expected to grow moving forward in the subsequent five years because of the 25% increase and the eligibility being set year after year.
It’s expected that up to over 500,000 more Canadians will benefit from this credit over the next five years.
I would be curious to hear why Prime Minister Carney thought the amount was more like $9 billion, but I’ll move on.
What is the income threshold that someone would need to meet in order to be able to receive this? Is it the same as the GST credit? If so, what is that threshold?
You noted that 12 million Canadians would receive it. I’m assuming that the income threshold for receiving the GST credit is very low, and isn’t it unfortunate that 12 million Canadians would potentially earn so little that they would be receiving this?
I thank the member again for the question. I’m not sure I can give a fulsome answer to the question in terms of eligibility because it all depends on one’s revenue and on the number of kids one has — it’s a scale. There is a chart, though I don’t have that here in front of me.
As I said in my previous answer, 100% of the people who qualified for the latest GST credit in January of this year will qualify for this 50% top-up, as well as for the 25% bump starting in July. Then, year after year, the previous year’s income tax will determine what people’s qualification amounts are, so those will vary. But 100% of the people receiving it today will continue to receive it, and it is expected that over 500,000 more Canadians — over and above the 12 million who receive it now — will receive it at the end of the program.
I thank Senator Boudreau for that speech. Given his extensive experience — and as the former finance minister of New Brunswick — he is well suited to sponsor this legislation.
I have a question. I received an email from a Prince Edward Islander, and I’m trying to get the information to respond. I have not been able to obtain it yet. I’m wondering if you either have it or could make a commitment to get it to me so I can respond to this person’s concern.
The person wrote me an email that stated:
According to my review of the proposed legislation, a single person with a $40,000 net income would get a payment of $399.75, while a single person with a net income of $10,000 would receive $261.75. The question, of course, is: Does the government feel someone with a $40,000 income needs more help than someone with a $10,000 income?
I thank my colleague for the question. That’s certainly not an answer I can provide on the fly, but I will commit to getting an answer for my honourable colleague and make sure that he receives a response.
Senator, I appreciate that. The person goes on in their email, and this is the heart of their concern:
The problem here is that the proposed legislation is based on the GST credit. Simply put, the GST credit gives a larger credit to some people with higher incomes because the government of the day was trying to honour an election promise that their credit would offset the impact of the GST. Since people with more money would spend more, they were expected to pay more GST. The GST credit is odd. It should not be the basis for this new credit.
Could you find a rebuttal from the government for that concern?
Thank you for the question. I certainly will. As I committed to do for the first question, I’ll try my best to get an answer on the second one. Again, all I can say is this certainly goes deeper than what I received in terms of a legislative briefing for Bill C-19. But again, the idea of building this new program, this new benefit, on the GST credit that has been in place since 1991, is a point that can’t be neglected here.
This credit has been around for a long time. It has survived successive governments, it has helped tens of millions of Canadians, and it was deemed to be the quickest way to get this additional money into the pockets of Canadians who need it most. That’s the intent behind Bill C-19.
Would the senator take another question?
Yes, of course.
First of all, I’d like to congratulate you on your speech. I believe this is the first time you’re sponsoring a bill in this chamber. It’s an interesting experience that will give you a better understanding of how the Senate works.
Before I ask you my question, I’d like to share an observation with my colleagues. Many of my fellow economists and I agree that this tax measure is much more targeted and better designed than a certain temporary GST cut, which some called a gimmick. I believe there is a great deal more support for this measure in the House of Commons and the Senate.
This is the most significant tax measure since the pandemic. Outside of the budget cycle and the pandemic, we rarely see amounts as high as $11 billion.
I would like to know if you can provide this chamber with any assurance that we can afford this measure without a new budget framework. In my opinion, during the Department of Finance briefing, Mr. LeBlanc was less cautious than he should have been when he said that he believes Canada can afford such a measure. What did he base that statement on?
Thank you for your question, colleague, and for referencing economists. Although I am not one myself, I agree with them that a targeted measure is preferable for helping those who need it most.
I’m obviously very pleased with the government’s decision. Twelve million Canadians will be affected by this measure. As for whether the government can afford such an initiative, it is not my role, as the sponsor of the bill, to answer that kind of question. I’m sure there are people in the Department of Finance who could provide you with a more detailed answer.
Thank you, Senator Boudreau, for your work as sponsor of this bill, and congratulations, since this is the first government bill you have sponsored. I’m sure there will be many more to come.
I rise today, honourable colleagues, to speak to Bill C-19, An Act to amend the Income Tax Act, which will increase benefits under the Goods and Services Tax credit and rename it as the Canada Groceries and Essentials Benefit.
At its core, Bill C-19 takes the existing GST/HST credit, an established quarterly, non-taxable payment meant to help low‑ and modest-income Canadians, and transforms it in two ways.
First, it provides a one-time payment equal to 50% of the current benefit, tied to eligibility in January 2026, with the stated intent of delivering relief as early as possible in the spring of 2026. This measure is estimated to deliver $3.1 billion in immediate assistance to individuals and families who currently receive the GST credit.
Second, it bakes in a multi-year increase by raising the maximum annual credit amounts by 25% for five years, with payments continuing quarterly, beginning July 2026 and running through April 2031. This measure is estimated to deliver $8.6 billion in additional support over the 2026-27 to 2030-31 period. In total, the government projects that 12.6 million individuals and families — about 30% of the population — will benefit.
We are told that the practical impact of these changes will look like this: A single senior with $25,000 in net income would receive a one-time top-up of $267, plus a longer-term increase of $136 for the 2026-27 benefit year. In total, they will receive $950 for the 2026-27 benefit year.
A couple with two children, with $40,000 in net income, would receive a one-time top-up of $533, plus an increase of $272 for the 2026-27 benefit year. In total, they would receive $1,890 for the 2026-27 benefit year.
Regrettably, this bill is necessary because millions of people are under acute pressure at the checkout line, and they have been for years. According to Statistics Canada, the overall Consumer Price Index inflation in December 2025 was 2.4% year over year, but food purchased from stores was up 5% year over year.
These are not academic numbers. They are the difference between a family keeping up and falling behind, and Canadians are falling behind.
Food Banks Canada reports nearly 2.2 million food bank visits in a single month, colleagues, with children representing one third of those visits.
Abacus Data found in late 2025 that 81% of Canadians cite grocery prices as a concern, making it among the most universal affordability pressures in the country.
The 2026 edition of Canada’s Food Price Report states that the average family of four is expected to spend $17,572 on groceries in 2026 — about $1,000 more than in 2025 — and compares that to $12,180 for a family of four way back in 2019, an increase, colleagues, of $5,000 from pre-pandemic times to today.
Yes, help is needed, but the real question is this: Why are we here again with another patch, another cheque and another press conference?
You may recall that, in October 2022 and March 2023, the Trudeau government passed what was framed as an affordability measure through GST-credit doubling and a so-called grocery rebate. Then, in late 2024, they implemented a temporary GST holiday on certain items, another short-term fix. Now, under the new Liberal government of Mark Carney, we are back here again to approve another bigger, stronger Band-Aid.
Honourable senators, Conservatives support this bill because we recognize that this is the best that Canadians, unfortunately, can expect from this government. This is the best they can do, because the government is failing to do what it promised, which was to govern competently, manage the economy responsibly, deliver affordability through growth and productivity, unleash our natural resources, get the economy revving again and start creating wealth for all Canadians. That was the promise.
Just over a year ago, Prime Minister Carney stood in a community hall in Edmonton, Alberta, and launched his campaign to become the leader of the Liberal Party of Canada. His message was clear: While the opposition had nothing but sound bites and slogans, according to him, he had a plan to get Canada’s economy back on track and deal with Donald Trump. He positioned himself as the grown-up in the room who understood economics, had navigated global crises and possessed the gravitas to deal with the unpredictable American president and the growing international and Canadian inflationary crisis that we are facing. Yet, we are now almost a year into his tenure as Prime Minister, and Canadians who thought they were getting a steady hand on the rudder are likely now dashing and looking for Gravol at all costs.
In fact, I would argue that Prime Minister Carney’s leadership has increased the turbulence by becoming precisely what he criticized: a leader who substitutes rhetorical flourishes for a coherent strategy and swings between narratives, depending on what serves his political brand rather than Canada’s economic interests.
It has been a year, colleagues. There are no excuses after 10 months of seeing a government continually implement inflationary programs which are absolutely immune to growing deficits and debt. The debt over the last 10 months has hit new historic levels. The deficit under this government has hit new historic highs, regardless of how they use the accounting magic of what only Liberals do when they audit books.
His recent performance at the World Economic Forum in Davos exemplified this approach. The speech was polished and widely praised for its cohesive arguments, yet beneath the surface, it was riddled with and full of contradictions. He compared the United States and China as coequal hegemons threatening global stability, yet days earlier he celebrated renewed trade engagement with Beijing as if it represented a turning point in the international world order.
He warned that authoritarian powers weaponize markets yet treats deals with those same regimes as routine pragmatism rather than strategic risk. He called for middle powers to band together in defence of shared values, yet his actions suggest that Canada’s principles bend conveniently whenever a headline beckons.
But it is his signature line which is most troubling to me: Canadians can “. . . give ourselves far more than the Americans can ever take away.” Remember that one?
This is a stirring sentiment, designed to invoke national pride and resilience. But when scrutinized, the proposed path to achieving this independence collapses. Yes, removing interprovincial trade barriers will help. But the notion that eliminating barriers between provinces can somehow replace or rival the scale, proximity and infrastructure advantages of the American market is economically illiterate.
But I want to go deeper. In the last 10 months, how many first ministers’ meetings were there? How many press conferences next to premiers were there? How many press releases were there celebrating that we’re tearing down trade barriers between provinces?
The truth of the matter is that 10 months later, and after umpteen press conferences, press releases and first ministers’ conferences, we have not torn down a single thing or moved the yardsticks at all.
Similarly, his pledge to double non-U.S. exports within a decade and conjure $1 trillion in domestic investment through massive government spending reads more like campaign theatre than executable policy. These are not strategies; they are slogans dressed up as solutions.
The stubborn reality is this: Roughly three quarters of Canadian exports still flow to the United States. After decades of talk about diversification, our export concentration has not meaningfully changed. Diversification is worthwhile at the margins, but it cannot replace the foundational relationship that geography, infrastructure, supply chains and decades of integration have created.
The real question is not how to replace the United States as a trading partner. The real question is why Canada is becoming less competitive everywhere, including with our closest ally.
Why has foreign investment abandoned this country? Why is Canadian investment leaving at records we have never seen before? Why is Canadian productivity one of the lowest in the OECD of the G20 countries?
These are the questions that the government has to tackle. If we do not tackle these questions, we are going to continue to deal with legislation that deals with poverty, and we will get into semantics.
Senator Percy Downe says very often — and he is absolutely right — there are pros and cons to this particular program, but the truth is, colleagues, the more that somebody spends at the grocery store, the more they will get back in rebates. Obviously, if you have more to spend, you are not as poor as the person who has less to spend. Again, this is nothing more than a Band-Aid solution. It is far from perfect. It does not tackle the core problem. The core problem is that bad monetary policy as well as irresponsible debt and deficit spending have weakened our dollar to the point where everyone is fleeing from it.
That brings us to the problem that Carney’s rhetoric is designed to obscure: Canada’s catastrophic productivity decline. Our GDP per capita has fallen from 94% of the U.S. level in 1981 to just 78% in 2023. Labour productivity sits at US$74.70 per hour worked compared to US$97 in the United States. Investment in machinery and equipment per worker has collapsed from 60% of the U.S. level in 2008 to 41% today.
It is catastrophic, colleagues, when we think of that.
Intellectual property investment per worker has dropped from 50% to 30% of the U.S. level. These are not abstract statistics; they are the scoreboard of national decline. In practical terms, this productivity crisis is why Canadians feel like life is getting harder even when they are working just as hard. When each hour of work produces less value than in competing economies, businesses cannot pay competitive wages, governments collect less revenue without raising taxes and we have fewer resources for health care — 6.5 million Canadians without a doctor — as well as less money for infrastructure, defence and considerably less for social programs.
Over time, this manifests as stagnant wages, fewer quality jobs and rising costs for housing, vehicles and imported goods without corresponding increases in Canadian paycheques.
You cannot message your way out of that gap. Unless Canada invests more in better tools, technology and innovation and actually gets projects built, our standard of living will continue to drift and spiral downward.
Colleagues, it is my firm conviction that our trading relationship with the United States should and will outlast Donald Trump, just as it has outlasted every other president. This is because geography does not change with political winds, and it certainly cannot change the economic and geographic realities of our continent.
Our economies have been stitched together by pipelines, rail corridors, highways and integrated supply chains that make cross-border commerce structurally cheaper and faster than any other alternative anyone can dream up.
Ottawa’s job today is to manage turbulence without pretending we can simply pivot away from the market that matters most — the market that every nation in the world is trying to find ways to penetrate.
A serious strategy would stabilize and strengthen the U.S. relationship rather than antagonize it for domestic political points. It would remove the internal barriers choking investment and focus relentlessly on capital formation, innovation and project execution.
Diversification should be pursued steadily as insurance, not sold as a substitute for the only market that can absorb Canada’s production at a competitive cost.
Prime Minister Carney promised substance over slogans. Instead, he has delivered slogans disguised as strategy, contradictions masked as principle and a foreign policy that oscillates between confrontation and flattery depending on the audience and depending on the moment.
And this is what we are seeing once again with the legislation before us today. In his January 26 press release, the Prime Minister said his government is introducing, “. . . new measures to make groceries and other essentials more affordable . . . .” to bring down our costs.
But Bill C-19 does nothing of the sort. Dalhousie Professor Sylvain Charlebois called the measure “political theatre,” saying it treats the symptoms of high food prices, not the root causes. He warned that putting more cash directly into the hands of consumers could backfire by potentially allowing grocers to raise prices even further.
And I would remind you, colleagues, that this is not the first time the Liberals staged a performance and promised results that never materialized.
In 2023, the finance minister made a big show of calling grocery CEOs to Ottawa and threatening them, promising to ensure prices would come down. There was all kinds of theatre there. We saw the results. The CEOs came and went, and nothing changed. Canadians were left with higher prices and higher food bank usage.
That show definitely might have made for a good headline, but it did not make groceries affordable, and neither will the legislation before us today.
Conservatives support the relief provided in Bill C-19 because Canadians need relief badly, but we will not pretend it is a plan. It is not. It is a stopgap measure that was cobbled together to buy the Liberals more time to try to figure out what to do.
By the way, as I said earlier in my question to Senator Boudreau, it has been tried four times by the same government expecting the same result. We know what happens when you try the same thing over and over again while expecting a different result. We know what we call that. Perhaps you think that I’m being too hard on the government; I understand that. It is my role, but I’m trying to be constructive. But consider for a moment that Budget 2025, a 405-page document, included pages and pages of affordability measures, such as tax cuts, automatic benefits administration and school food programming, but did not once mention a permanent GST credit expansion of the kind now being proposed through Bill C-19.
The ink on the budget document has barely dried, and the first budget implementation act has not even been passed, colleagues, and yet this government is already tacking on an ad hoc program and blowing past its deficit and debt projections.
This is no small thing. The government is asking Parliament to legislate a one-time payment and ongoing increases for millions of Canadians.
Yet this initiative arrives in a manner that once again raises serious questions about planning and fiscal discipline. We are not looking at a carefully sequenced affordability strategy anchored in a stable fiscal framework. We are looking at another bolted-on policy afterthought with no consideration for the long-term financial implications.
Former finance minister John Manley correctly had it right when he warned last week, “We can’t keep borrowing our way to prosperity.”
Colleagues, relief without reform becomes a permanent dependency on temporary cheques and schemes. And although the government claims that the 25% increase in the GST tax credit is only for a five-year window, I can guarantee you that, no matter who is in government, it will not be reversed in 2031. That is just the political reality, and we all know it — those of us who understand how this town and politics work. The government is building in a permanent increased cost, instead of tackling the root causes behind our unaffordability crisis. This is what they have been doing for 10 years.
Honourable senators, Bill C-19 is necessary because Canadians are under pressure. The data is unmistakable and clear: Food inflation remains elevated relative to overall inflation, and food bank usage has hit record levels.
But Bill C-19 is also an indictment. It is proof that the government’s promises to make life affordable have not been met with any tangible results. There is the proof: the fact that we need to go back to the well with this smoke-and-mirrors piece of legislation.
So let us do two things at once, because Canadians deserve both. First, we should pass the relief and pass it quickly so that low- and modest-income Canadians get support through a system that can deliver it immediately.
Second, we should tell the truth about what this bill represents, tell the truth that it is a stopgap that exists because of a decade of mismanagement, fiscal drift and a governing style that too often substitutes theatre for substance. It is our obligation in this place of sober second thought to speak the truth.
Conservatives will support Canadians getting help at the checkout line, because Canadians need it now. They are desperate. We have met with them. We have talked to them. We have gone out. I encourage all of you independent senators to go out and meet your constituents in your respective regions of the country. They will tell you how much they are suffering, and the grocery store will be the first place they will talk to you about.
But we will not pretend that this is a success. It is not. Bill C-19 is nothing to celebrate. It is a warning. It is another flashing danger sign. It should be a turning point for this country, away from improvisation and political theatrics and towards more serious, disciplined economic leadership — one that is thoughtful, long-term and that provides results to Canadians. Thank you, colleagues.
Are senators ready for the question?
Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
(Motion agreed to and bill read second time.)
Honourable senators, when shall this bill be read the third time?
(On motion of Senator Boudreau, bill placed on the Orders of the Day for third reading at the next sitting of the Senate.)
