44th Parl. 1st Sess.
March 22, 2023 01:00PM
- Mar/22/23 2:32:00 p.m.
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Mr. Speaker, we are seeing the cost of living continue to hit hard across the country. People are struggling with the cost of everything.
We know that some numbers have come down with inflation, but, really, where it counts, like groceries, inflation is still over 10%. That means people go into a grocery store, pick up items, realize they cannot afford them and put them back. At the same time, corporate CEOs for these grocery stores are making record profits.
When will the Prime Minister stop the excess profit being made by his CEO friends and stand up for Canadians so they can afford their groceries?
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- Mar/22/23 2:50:07 p.m.
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Mr. Speaker, once again, this is an idea we are already moving forward with, looking at federal properties and how we can convert them either through the rapid housing process or by working with municipalities to deliver more affordable housing.
I am very pleased to see the member opposite moving off his recommendation on buying Bitcoin as a way of avoiding inflation, and actually putting forward concrete ideas. It is great to have a real debate over ideas. I wish he had paid attention to the ideas we have so he can maybe propose different ones or perhaps better ones.
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- Mar/22/23 8:10:04 p.m.
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Madam Speaker, this also affects the survival of our microbreweries. It is important to people living in Quebec as it affects the prosperity of our towns and villages. What are the members' thoughts on the survival of these microbreweries?
In the context of inflation, providing direct assistance might be more impactful than cutting the excise tax, which would do very little.
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- Mar/22/23 8:14:18 p.m.
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Madam Speaker, I appreciate contributing to this evening's debate, although we had a bit of a late start.
What is important about today's debate is that it is set in the context of basic issues about affordability, basic issues about rising costs and the cost of living, which is a challenge for families right around the country. It is no different for my riding of Parkdale—High Park and for the 337 other ridings around the country. People feel it every week when they are at the grocery store. It is difficult for many people, and we understand that. That is why we put in place a series of measures to make life more affordable for millions of Canadians.
Our focus on this side of the House throughout this rise in the cost of living has been on Canadians who need the help the most. It is no longer possible to help everyone in Canada, as we did during the pandemic, so we are seeking and have been pursuing, quite diligently, targeted measures. That is really critical, particularly in light of the situation we are facing with inflation, as it currently stands. Our capacity to spend is not unlimited, nor would it be prudent to spend in an unlimited manner. What we are doing is trying to help those who need it the most.
Let me talk specifically about the nature of this evening's debate with regard to the excise duty on alcohol. Let us be very clear that we are not talking about an approximately 6.7% rise in the price of alcohol. What we are talking about is a rise in the excise duty. I can tell members what that translates into if we equate it to the price of a bottle of beer. I will say quite candidly that I am one of those purchasers of bottles of beer. Like many other members of this House, I appreciate a good bottle of beer, including from a microbrewery, such as Henderson's, from just outside my riding, such as Waterloo Dark, such as Upper Canada Lager, and the list goes on. When we translate what this means to a person like me, to a family like mine, to Canadians in this chamber and those watching our proceedings on this Wednesday evening, it translates to less than one cent per can of beer. It is less than one cent. In fact, it is 0.78¢, so not even one full cent per beer is what this price escalator reveals.
Why is it indexed in the manner it is? It is quite simple. We use this as a frequent tool to ensure that, as the cost of producing the goods we put taxation measures on changes and as the cost of living changes, so does the excise tax duty. There is a direct proportionality. That is the basic premise that we are dealing with.
I will be splitting my time with the member for Vaughan—Woodbridge, who is also a lover of finer things. I think he is more fond of wine. I am personally more fond of the great thing that comes from wheat and grain, including a good pint here and there, beer in particular. This is a good segue into wine, which is next in my speaking notes.
What we have been doing to support the sector is that we have implemented a wine sector support program, which provided up to $166.2 million to Agriculture and Agri-Food Canada in 2022-23, as it will in the forthcoming fiscal year, to support wineries in adapting to ongoing and emerging challenges. Indeed, the member for Niagara Falls, with whom I serve on the Standing Committee on International Trade, is very fond of promoting, as he should, the excellent wines from the Niagara Region. We are supporting those wines from the Niagara Region.
Small and medium-sized brewers right now also benefit from the currently lower rate of excise duties on the first 75,000 hectolitres. One hectolitre is 100 litres, so that means, with my crude math, that one has to create 7.5 million litres before one hits the level of the higher excise duty applying. Just that simple feature of having a threshold that is hit at 75,000 hectolitres saved brewers up to $851,000 per brewer in 2022. That is significant in terms of supports that are already in place.
What we have also done as a government is repeal the excise duty on non-alcoholic beer. One may be a designated driver or one may not feel the need for alcohol on a given evening or at a given weekend barbecue. Sometimes people pursue non-alcoholic beer. That is a great thing. We have a vibrant non-alcoholic beer industry. What we did is repeal the excise duty on that particular type of beer altogether on July 1, 2022, to encourage growth in that sector.
What I also want to indicate today is that Canadians who are watching need to contextualize this discussion. When we talk about an escalator on the excise duty, when we talk about issues that relate to the cost of living, we have to put that in the context of what we are doing about the cost of living as the Government of Canada.
We are doing a great deal. The targeted measures that we have rolled out over the past several years are vast, and I am going to list some of them. We have implemented changes to the Canada workers benefit. That means eligible low-income and modest-income families can receive up to $2,461 this year alone. Single Canadians, through the Canada workers benefit's improvement, without children, could get up to $1,428. We have provided $2.5 billion to 11 million Canadian individuals and families with low and modest incomes through the GST credit payment.
We are providing tax-free payments of up to $650 per child per year. That is through a phenomenally popular program that covers dental expenses for kids under 12 through the Canada dental benefit, a program, among others, that the members of His Majesty's official opposition had the wisdom to vote against. That program alone has already helped 230,000 children with an aspect of their health care that was not covered previously, absent this new benefit that we have created.
We are offering a tax-free payment of $500 to help low-income renters who are struggling with the cost of housing. My first remarks in the context of this evening's debate were about helping those who need it the most. Our view is that people who already receive the Canada housing benefit are among the lowest-income Canadians who are struggling with the cost of housing and with affording their rent. They are precisely the people who need our help the most, and that is what we have been doing with that top-up. There have been 625,000 applications received for that top-up to the Canada housing benefit, demonstrating the acute need that exists in the economy at present.
We have heard the official opposition rightfully raise the issue of seniors on many occasions. Seniors and seniors in poverty deserve our assistance and they deserve it in a targeted manner. What we did is put a 10% increase on old age security payments for seniors who are 75 or older. That provides over $800 in additional support to full pensioners in their first 12 months.
Thanks to our agreements with provinces and territories, we are reducing child care fees. This is actually quite incredible. I believe the mover of this motion is from the province of Alberta. In his province, fees have already been reduced by 50%, ahead of schedule. By 2026, our Canada-wide early learning and child care plan will bring fees for regulated child care down to $10 a day on average from coast to coast to coast. In fact, the $10-a-day goal has already been achieved by some provinces that were early adopters of our plan. Unfortunately, I cannot say the same for my own province of Ontario, which was the very last adopter of this plan. We will not realize the benefits of $10-a-day child care in Ontario as fast as we could have, had there been a bit more earnestness on the part of Premier Ford, but I will leave that discussion for another day.
In terms of the province of the mover of this motion, Alberta, the savings already in effect will be an estimated $8,610 on average per child, per year, for my friend's constituents. If we compare the magnitude of that kind of savings with 0.78¢ per can of beer, I think members can appreciate the priority we are placing and where we are placing it, in terms of Canadians and their true needs. Canadians are facing challenges; there is no doubt.
In these final two minutes, what I would say is that improvements have been occurring. Last month alone, 22,000 jobs were created, more than double what was expected. More than 20 million Canadians now have jobs. That is 830,000 more Canadians employed than prior to the COVID-19 pandemic; 126% of the jobs that were lost since the peak of the pandemic have now been recovered. On average, wages have increased 5%. For women, age 25 to 54, the participation rate is now at an all-time high of 85.7%. I will draw a direct linkage between that statistic and the child care policy that I just outlined. By empowering affordable child care, we unlock the potential of women to fully participate in the economy. That is a critical initiative. That is a gender-focused initiative. That is a feminist initiative. That is an initiative I am proud to stand by.
In this final minute, what I will say is that Canadians are here, and on all sides of the House. We promote our wine and our beer industry. It is vital to job growth in this country. It is a vitally proud industry for Canadians of all stripes, from all political backgrounds. What we are not debating is support for that sector. What we are debating is the impact of the excise duty escalator. What I would say to Canadians who are watching tonight is that, yes, the price will go up by 0.78¢, less than one cent per can of beer, but what we are doing is addressing the costs of Canadians by the acute measures that I have outlined. That is important and I think we should all raise a toast to just that kind of initiative.
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- Mar/22/23 8:29:29 p.m.
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Madam Speaker, I am pleased to rise today to speak to our country's economic situation. Our government understands that many Canadians are struggling to make ends meet during this period of high inflation. Fortunately, inflation in Canada has been slowly declining recently. The OECD expects inflation to return to its target level by the end of 2024. Inflation in Canada was 8.1% in June 2022. It has since fallen to 5.2% in February.
Canadian inflation is still too high, but it is lower than what we see in many peer economies. It is going in the right direction, and going lower. For example, it is 8.5% in the European Union, and 10.1% in the United Kingdom. In fact, as we continue navigating through these difficult times, our country is faring much better than most other G7 countries. Canada is facing the same global economic headwinds from a position of fundamental economic strength, a sound fiscal balance sheet, an AAA credit rating, and an unemployment rate at a very low level.
The facts speak for themselves. Our government made targeted investments to support Canadians and our economy through the pandemic, and these efforts are paying off. Last week, it was great to see the announcement by Volkswagen, which is bringing literally tens of thousands of jobs here to the province of Ontario and benefiting Canadians from coast to coast to coast.
As a result of our government's leadership, Canada has experienced a strong rebound from the pandemic recession, with a 3%-plus growth rate in 2022, which is one of the strongest in the G7. On top of that, we continue to see the strongest increase in real disposable income in the G7.
In addition, the more than 170,000 jobs created in January and February and a historically low unemployment rate of 5% clearly demonstrate the resilience of the Canadian economy.
However, we recognize that many Canadians are struggling to make ends meet. Canadians are feeling the consequences of high inflation when they go grocery shopping, fill up their gas tank or pay their rent or mortgage.
Unfortunately, we can no longer help everyone, as we did during the pandemic. That said, our government has put measures in place to continue to help those who really need it.
We will help those most impacted by inflation.
With regard to the excise duty on alcohol, when it comes in inflationary adjustments to the excise duty rates on beer or wine, I would like to reassure my colleagues that they do not generally represent an increase in real dollar terms. They broadly preserve the effectiveness of these excise duty rates over time and generally ensure rates stay constant relative to the product on which they are levied.
Our government recognizes the important contribution that Canada's wineries, breweries, cideries and distilleries make to the national economy through job creation and the sale of high-quality products.
That is why the government implemented the wine sector support program, which is providing up to $166.2 million to agriculture and agri-food in the 2022-23 and 2023-24 fiscal years. This will help wineries adapt to current and emerging challenges.
Canadian small and medium-sized brewers currently benefit from reduced excise tax rates on the first 75,000 hectolitres of beer produced per year. This has provided support of up to $851,350 per brewer in 2022.
The government also repealed the excise duty on non-alcoholic beer starting on July 1, 2022, to encourage growth in this sector of the beer industry.
For the Canadians who need it the most, those most vulnerable, those most impacted by rising prices or inflation and those who feel the bite of rising prices most acutely, our government is there with inflation-relief measures. For example, we provided a one-time $500 payment to Canadian low-income renters through the Canada housing benefit.
We cut regulated child care fees by 50%, on average, across the land. Here in Ontario, day care fees have come down 52.7%, representing up to $6,000 or $7,000 of real before-tax savings for families in Ontario in some instances. Those are hard-earned dollars that stay in the pockets of Ontario families, and our government led the charge on this. We collaborated and worked with all the provinces, and we got it done. It is helping Canadian families not only here in Ontario but across Canada.
We have also doubled the GST credit for six months. This measure alone provided $2.5 billion in additional targeted support to the roughly 11 million individuals and families who already receive the credit. This includes the more than half of those receiving the benefit who are Canadian seniors.
We enhanced the Canada workers benefit to put an additional $2,400 into the pockets of low- and modest-income families.
We are also brining in the Canada dental benefit, which provides parents with children under the age of 12 who do not have access to dental insurance with direct payments of up to $650 per year, for a total of $1,300 per child over the next two years for dental care. It is estimated that 500,000 Canadian children will benefit from this targeted investment of $938 million.
These are just a few examples of what our government is doing to help Canadian families from coast to coast to coast. However, we understand that our spending capacity is not infinite and that it is important that we continue to pursue a tight fiscal policy. The measures we are implementing to help Canadians are not adding fuel to the fire of inflation. They are simply providing targeted and fiscally responsible assistance to those who need it most.
The Deputy Prime Minister reaffirmed the government's commitment to presenting prudent fiscal management ahead of budget 2023 at a recent meeting with chief economists for the major Canadian financial institutions. Canada has the lowest deficit and net debt-to-GDP ratio in the G7, maintaining our AAA credit rating through the COVID pandemic, and we are going strongly for the future.
We also committed to $9 billion in savings from a government spending review in the 2022 budget. According to a recent OECD survey, Canada's net debt-to-GDP ratio is well below the average for the OECD, the European Union and the United States. This continued track record of fiscal strength has allowed the government to continue providing necessary targeted economic support to those who need it the most: those most impacted by the inflationary period that Canada went through and is still going through, but which is receding.
In conclusion, Canada's economy is performing relatively well compared with the economies of our G7 peers, and there are good reasons for optimism. However, our government understands that many Canadians still need some support to get through these difficult times. That is why we will continue providing inflation relief to Canadians who need it the most and are the most vulnerable, for example, those who are most exposed to inflation and those on fixed incomes. We will continue doing so in a targeted, fiscally responsible way. The last thing we want is to make inflation worse. We are making life more affordable for Canadians while continuing to build an economy that works for everyone, helps the middle class and helps those working hard to join the middle class.
As we prepare for budget 2023, we also understand the need for further investments to create good jobs for Canadians to ensure that Canada remains a competitive place to do business, particularly in light of the U.S. inflation reduction act.
The Global Automakers were here this evening. I sponsored that event. It was great to see the representatives from Volkswagen there. Obviously, we congratulated them and I congratulated them on choosing Canada for their first North American battery plant. It is a plant for the future and creating thousands of jobs.
As the global economy undergoes the most significant transformation since the industrial revolution, Canada cannot be left behind. That is why we will continue to work tirelessly to create more high-quality jobs, invest in our communities and build a more prosperous Canada for future generations. We are preparing measures that will give Canada the tools it needs to succeed.
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Madam Speaker, I will be sharing my time with the hon. member for Abitibi—Témiscamingue.
As members know, unlike sales tax, which represents a percentage of the value of a product, the excise tax on alcohol is a fixed amount by volume as set out in the Excise Tax Act. Traditionally, that amount was occasionally reviewed and adjusted to inflation through an amendment to the act. However, since 2017, the act has included an automatic indexing formula, which means that the amount of the excise tax goes up every year based on inflation. That is why the excise tax on alcohol is going to increase by 6.3% on April 1 to reflect the high level of inflation we have seen over the past year.
Today's motion will not actually have a very big impact. We are talking about 1¢ per can of beer. This motion is not a real response to the increased inflation that is driving up the price of food in particular. This is a clear example of the populism of the Conservatives who are more interested in coming up with gimmicky slogans than they are in developing serious public policy.
Furthermore, when it comes to beer, only large breweries will benefit from the adoption of today's motion. Given that microbreweries only pay a fraction of the excise tax, they will benefit far less from a freeze on the tax rate. Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals.
The decision to apply a different tax rate to microbreweries, the artisans who are passionate about agri-food living in every region, was implemented in the 2006 budget after the Bloc Québécois advocated for it for years. The Bloc Québécois has been fighting for our microbreweries for a long time. That decision would give them the opportunity to compete against the giants of the industry, whose production costs are much lower thanks to economies of scale. Since the implementation of the preferential rate, the number of microbreweries has skyrocketed and increased eightfold to our great pleasure. For a small artisanal microbrewery, indexing the amount of the excise tax might only represent a 0.1¢ or 0.2¢ increase per can. We are talking about that very small amount today. This means that when we buy a 12-pack of beer, we would pay an additional amount of just a little over 1¢.
In budget implementation Bill C‑19 from spring 2022, the Bloc Québécois managed to extend to cider and mead producers the same support that had been extended to microbreweries 15 years ago. They are now completely exempt from the excise tax. Our support for small local producers is not limited to microbreweries. Unfortunately, since the government has a very restrictive definition of cider and mead, the producers who flavour their products with berries and aromatics continue to pay the tax. That is something we really hope to see resolved in the next budget, just like the application of the tax on wine made from other fruit such as pears, blueberries or even maple, which showcases our land. They should be treated the same way as our apple cider producers.
For hard alcohol, we are talking about an increase of roughly 25¢ for a 750-millilitre bottle. Again, we are not talking about a catastrophic increase, but it adds to the overall price increases.
With respect to spirits, frankly, the Bloc Québécois would have preferred that the Conservatives propose applying to microdistilleries the model that is already in place for microbreweries and impose only a fraction of the tax that is required of the industry giants. That would have a much greater impact. It would come down to about $3 per bottle rather than the meagre 25¢ that is being discussed today, but it would apply only to our small local producers. We hope the government listens carefully to what the Bloc Québécois is saying and will take it into account in its budget next Tuesday.
Our small producers are suffering, struggling to compete with the industry giants. As I said before, they would benefit greatly from a more targeted measure. Unfortunately, that is not what today's motion proposes. It has very little impact on consumers.
On every one of their opposition days, the Conservatives come back with their mantra: We need to lower taxes, cut EI by lowering the premium rate, cut retirement income by lowering the pension contribution—which also has an impact in Quebec, because the Canada pension plan and the Quebec pension plan are harmonized. They keep coming back to the idea of eliminating pollution pricing to pander to the oil companies.
Today's motion, while not intrinsically bad, is along the same lines and does not represent a real plan to fight inflation. We are talking about 1¢ for a can of beer or 25¢ for a $40- or $50-bottle of spirits. This is not the end of the world, especially considering that alcohol represents only 4% of the average household's market basket.
Skyrocketing housing and food prices are crushing Quebeckers and Canadians, especially those living on modest or fixed incomes. Measures that address the causes and effects of inflation would be much more useful than today's motion, which will have an essentially marginal impact on consumers. However, we do recognize that it could have a greater impact on restaurant and bar owners, who have been profoundly affected by the COVID‑19 crisis.
As members are well aware, the Excise Act does not just determine the amount of the excise tax. It also determines the terms and conditions for the sale of alcohol. Along with the Importation of Intoxicating Liquors Act, it states that only the government of a province can import or distribute alcohol. Quebec or the province can delegate that responsibility to a private importer or distributor by granting them a licence, but the province holds the exclusive power to govern the importation and trade of liquor on its territory. The fact that international trade is an area of federal jurisdiction is incongruous, and I am going to talk briefly about the history behind that.
Canada's first referendum took place in 1898. In the late 19th and early 20th centuries, many Protestant churches, particularly Baptist churches, were strongly advocating for the prohibition of alcohol. These prohibitionist movements were active in the United States and English Canada, just like in Lucky Luke.
The Canadian plebiscite on the prohibition of alcohol, which was held on September 29, 1898, was on the passage of a law prohibiting the importation, production and sale of alcoholic beverages across Canada. This law on prohibition would have taken the form of an amendment to the Criminal Code.
The yes camp won by 51.2% to 48.8%. It was a tight vote, but the yes camp won. However, the referendum exposed an important cultural divide in Canada. Every province except Quebec voted yes, but opposition to prohibition in Quebec was massive: 81.2% of the population voted against it, as they did in the case of conscription. The opposition was not only massive, but it was also very acrimonious. The members from Quebec in the House of Commons stated that they could not vote for a prohibition law because their families and communities would never forgive them.
The prime minister at the time, Wilfrid Laurier, noted that there was a cultural divide between Quebec and English Canada on this issue. He felt that the federal Parliament did not have the legitimacy to legislate, which would amount to imposing the decision of the majority on the minority that wanted nothing to do with it—the French Canadians at that time—even though it had the constitutional power to do so.
I hope the government is taking notes. It must not take unilateral action, and it should tell every province and Quebec to manage their own jurisdiction. That is how it was during the first years of Confederation. Instead of introducing legislation imposing prohibition across Canada, it chose to amend the laws on the importation and trade of alcohol and leaving it up to the provinces to regulate.
That is why still today that responsibility falls to the provinces. Of course, this creates some inconsistencies, such as the ban on transporting alcohol from one province to another, which prohibits a resident of Ottawa from bringing home a bottle that he may have purchased at the liquor store in Quebec. However, the principle is interesting: If there is a difference between Quebec and Canada on a given topic, then the federal Parliament should refrain from imposing a blanket solution that applies indiscriminately from coast to coast to coast.
I hope that the government and my colleagues from English Canada are listening carefully to this history lesson. I hope they will draw from it and stop imposing the will of Canada on Quebec when there is a difference of opinion, and delegate the powers. To my colleagues, I would say, “a word to the wise”.
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- Mar/22/23 8:55:47 p.m.
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Madam Speaker, I thank my colleague for his question. Obviously, I will let the Conservative Party explain its reasons.
To answer the question on inflation, there are a number of elements. We can think, in particular, of social housing, which should be better funded. In the budget being tabled by the minister next Tuesday, we hope to see significant funding allocated to social housing to ensure change, even if only at this level.
To come back to the excise tax, I hope that my colleague will be able to speak with his cabinet colleagues. We would like to have the same model for microdistilleries as for microbreweries, namely a progressive excise tax to allow small players to enter the market and compete with the giants.
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- Mar/22/23 9:23:26 p.m.
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Madam Speaker, I will retract that, but it is good to see him.
We do not want to scrap the tax. We want to restructure it so that it is fair. For it to go up 6% in one year when we are already facing the effects of inflation is too much to ask of these producers. We want it capped and we want all these taxes restructured so that small producers are treated fairly and can compete.
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- Mar/22/23 9:25:17 p.m.
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Madam Speaker, I do not think it would be too difficult to ask for. When the government brought in this escalator tax, inflation was pretty marginal. There was very little inflation, so it was only going up 1% or 2% per year. I would like to see something less drastic than just following inflation every year, because if it goes up 6%, that is drastic. What would be more important for these producers, especially the small producers, is to develop a fair sliding scale of excise tax payments that makes it easier for them to compete with the bigger players and especially the imports.
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- Mar/22/23 9:47:42 p.m.
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Mr. Speaker, I will refrain from commenting on the need for an independent public inquiry. In a context where the federal government is experiencing significant budget surpluses and in a time of high inflation, why does the Liberal government want to increase the tax by 6.3%?
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- Mar/22/23 9:48:05 p.m.
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Mr. Speaker, I would not say the federal budget is in a surplus situation. I think we are still going to see deficits. The 6% increase to the tax is due to the fact that we have an automatic mechanism to escalate the tax.
I think this is wrong. We as parliamentarians need to have debates and make deliberate decisions about tax increases. In the current environment, we are in a period of extreme inflation compared to previous decades. I do not think now is the time to have an exceptional tax increase on these products.
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- Mar/22/23 10:04:50 p.m.
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Mr. Speaker, the bureaucracy and other obstacles such as this government's tax system are driving investments to other countries. This needs to stop. The Conservatives were strongly opposed to this escalator tax when it was first introduced by the Liberals. We even campaigned on the idea of getting rid of it. Members within the Liberal caucus do not seem to agree with this policy. Just ask the member for London North Centre, who said that the government should not move forward with this tax and it should not be tied to inflation either.
In conclusion, the cost of living keeps going up faster than the prevailing wage, and measures to make goods more affordable are sorely lacking in Canada. I sincerely hope that the government and the Minister of Finance will listen to the Conservatives, but mostly to Canadians, and that they will cancel this tax in the budget they are bringing down next week. I hope that the other opposition parties will join us in voting on this motion in order to pressure this government into doing what is necessary and scrapping this tax for once and for all.
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