Excise Tax Act

Honourable senators, I rise today to speak to Bill C-38, the Canadian fuel affordability act, which extends the temporary suspension of the federal fuel excise tax.

Let me make our position clear right at the outset: When the government adopts a Conservative proposal that saves Canadians money, we welcome it. We support this bill because Canadians need the relief it provides, and they need it badly.

In March this year, Food Banks Canada recorded 2.35 million visits to food banks in that single month — more than double the figure for 2019. One third of those visits were for children.

Nearly 18% of food bank users are Canadians who work but still cannot afford to feed their families. In fact, half of employed Canadians say their spending equals or exceeds their take-home pay.

More than one in four report that a paycheque delayed by just one week would leave them struggling to pay their bills. And 44% of Canadian adults report that they are within $200 of being unable to meet their monthly obligations.

There is precious little room left for another grocery bill hike, another repair bill or another jump in fuel prices. And that is why this relief matters.

Colleagues, as you know, when farmers pay more to run their tractors and trucks pay more to deliver our food, families face those costs at the grocery store.

Every dollar we can take off their fuel bill matters, and I am glad that the government has finally accepted that cutting fuel taxes helps with affordability. That is a significant admission, and I commend them for getting there, even if it did take some time. As you know, I’ve been asking about this for a decade.

However, having accepted that fuel tax relief helps Canadians, we must ask, “Why is the government already preparing to withdraw it?”

Bill C-38 extends the full suspension of the federal fuel excise tax until January 31, 2027. The tax will then return at half the regular rate on February 1, with the full rate reinstated on April 1. It is not an April Fool’s joke. For gasoline, this means a five-cent-per-litre increase in February and a further five cents in April. For diesel, two cents will be added in February and another two cents in April.

Those amounts may sound small when expressed in cents per litre, but they add up with every fill-up, every delivery and every shipment. And the government has set the dates for those increases without any assurance that Canadians will be in any better position to afford them in just a few weeks.

Colleagues, that is the fundamental flaw in this bill. It provides relief today, but, at the same time, it is putting the tax increases back on the calendar. Yet, the government has given us no reason to believe that Canadians will be better able to afford them when those dates arrive.

Perhaps the government is taking too much comfort in its own announcements. If you listen to it congratulate itself, you would scarcely know how many millions of Canadians are struggling.

On October 8, the Prime Minister declared that across Canada there was “. . . a new energy, a new confidence.” On October 20, his government was again celebrating its track record of lowering costs and building a stronger economy.

Colleagues, the government may be confident in its own performance, but Canadians have yet to see any evidence of this in their ability to make ends meet. They would like to have some confidence that their paycheque will cover their bills and that they can afford groceries without borrowing or going to food banks.

And that is why we have pressed this government repeatedly to make decisions that enhance affordability, including reducing the federal tax burden on fuel. Back on April 2 of this year, the opposition called for all federal taxes on gasoline and diesel to be removed for the remainder of 2026.

Twelve days later, the government announced a partial version of that proposal. It suspended the federal fuel excise tax, but only until Labour Day, and left the other federal costs in place.

The Conservatives kept pressing. On August 16, the Conservatives called on the Prime Minister to cancel the planned Labour Day increase and to remove all federal taxes on fuel until at least Canada Day 2027. On September 2, the government announced an extension.

That was the right decision, and I’m pleased that the government made it.

Canadians will now keep more of their own money because we kept on pressuring, and we will continue to make the case that lower taxes on fuels make for lower costs at grocery stores, allow Canadians to drive their cars and families around in a more affordable fashion and allow farmers in the agricultural sector to produce food at a more competitive price.

Colleagues, look at what is in front of us. The government is already scheduling the return of the tax. We must ask what will happen on February 1 that will make these costs easier for Canadians to bear. What changes on April 1? The answer is absolutely nothing. Families will still have the same mortgage and rent payments; they will still have grocery bills. Businesses will still need to transport their goods and meet payroll. The government has not established that any of these pressures will have eased by the dates it has arbitrarily picked. It provides relief at the pump with one hand while handing Canadians the bill with the other.

At the House of Commons Finance Committee, we proposed extending the full suspension until Canada Day, followed by a later period at half rates. Those amendments were defeated.

Let us be clear about where the limitations of this bill come from. They are no accident; they are choices. The government could have accepted prolonged relief but chose not to.

Our position remains clear: Remove all federal taxes on gasoline and diesel until at least Canada Day 2027 and permanently scrap the Clean Fuel Regulations and the industrial carbon tax. We support the relief before us but also believe Canadians deserve more than what this government is offering at this time.

Honourable senators, that brings me to the broader fiscal picture, and this is where I wish to spend the rest of my time.

Last week, the Parliamentary Budget Office, or PBO, published the report Economic and Fiscal Outlook – October 2026. It serves as a warning that deserves the attention of every senator and every Canadian. In the report, the PBO projects public debt charges of $59.3 billion. By 2030-31, those charges are projected to reach $83 billion. That is almost $24 billion more in annual debt charges, an increase of approximately 40% in just a few years. By the end of that period, almost 14 cents of every dollar of federal revenue will go to servicing the debt.

The PBO report also noted that the federal debt is projected to rise from approximately $1.4 trillion this financial year to almost $1.7 trillion in 2030-31. When combined with the market debt of Crown corporations, our total borrowing requirements will exceed $2.7 trillion by 2030-31.

The government tells Canadians that all this borrowing will strengthen the economy, but that is far from guaranteed. In fact, there are many days when I feel as though this government is gambling with billions of dollars and simply hoping for a return.

Parliament needs to closely monitor whether the government is actually delivering the results it has promised because our ballooning debt means there are fewer dollars left for other priorities, including tax relief.

Honourable senators, that is directly relevant to Bill C-38. The government says Canadians need a tax break today, but the accumulating debt load will put upward pressure on their taxes tomorrow. We are being asked to celebrate temporary tax relief even when the government undermines its ability to keep taxes low.

If the government accepts that Canadians cannot afford higher taxes today, why is it leaving them with an even bigger tax bill for tomorrow?

The government says Canadians need a tax break today, but the accumulating debt load will put upward pressure on their taxes tomorrow. We are being asked to celebrate temporary tax relief even when the government undermines its ability to keep taxes low.

If the government accepts that Canadians cannot afford higher taxes today, why is it leaving them with an even bigger tax bill for tomorrow?

Colleagues, let me be clear: Conservatives are well aware that extending tax relief reduces government revenue, but that is exactly why the government must spend less.

Our position is simple: Canadians should keep more of what they earn, and the government should not be mortgaging our grandchildren’s future by leaving them an inheritance totalling trillions of dollars in debt.

This is not an impossible task. It requires making choices. It requires examining programs that do not deliver results, controlling administrative costs and ending the assumption that every new problem demands another federal spending commitment.

Families across this great country are making difficult choices every month to meet their obligations, and they are entitled to expect the same discipline from their government.

We cannot simply believe that future growth will cover the cost of spending decisions made today. At some point, the government must demonstrate that it has a realistic plan to control its debt load.

Colleagues, we will support Bill C-38 because every dollar Canadians save matters. We will continue to press for broader relief and prolonged relief. We will continue to demand that this government manage public money responsibly so that Canadians do not lose tomorrow what this bill allows them to keep temporarily today.

I also wish to take this time to thank our colleague Senator Forest, who is the sponsor of this bill. I thank Senator Forest for his stewardship on this bill. I thank him in particular for all the great service he does for this institution. He is always doing the heavy lifting at the Standing Committee on Internal Economy, Budgets and Administration and the Subcommittee on Senate Estimates and Committee Budgets. He has been a picture of fiscal responsibility in this institution, so I wish to again thank him for his work, and thank you, colleagues, for the time you have accorded me.