Canadian Fuel Affordability Act

Bill C-38, Canadian Fuel Affordability Act · Second reading · now law Where it stands

What the law does

The law extends the temporary suspension of the federal fuel excise tax until January 31, 2027. Between February 1, 2027, and March 31, 2027, excise tax rates on fuels are set at 50% of their regular rates.

Official text (opens in a new tab)

65 statements

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“Our government is helping small businesses grow. We signed over 20 trade deals, brought in huge investments, and are training more skilled workers. I want the member across the way to support these efforts.”
Official Hansard

Mr. Speaker, that is one of the reasons we have a Prime Minister and a government committed to looking at expanding export opportunities, with 20-plus trade and security deals over the last 18 months. We can talk about the huge investment summit, a half-trillion dollars of infrastructure and so much more coming Canada’s way in terms of commitments. These are the types of things that are making a difference, like providing a Red Seal enhancement program that is going to see more Red Seals graduating. These are the types of things that are there to support and grow small businesses. I wonder if we can count on the member opposite’s support.

Doly Begum, Scarborough Southwest

Liberal
“People across the country need help with the cost of living. This bill will make life more affordable, and I want the member to support it.”
Official Hansard

Mr. Speaker, I understand that the member’s riding is going through difficulties similar to those across the country. Bill C-38 would make life more affordable for Canadians. Would the member support a measure that would make life more affordable for Canadians, something that people across this country are calling for?

Doly Begum, Scarborough Southwest

Liberal
“I want the House to pass this bill. It keeps fuel taxes lower until 2027 to help Canadians save money on gas and diesel while the cost of living is high.”
  • A repeated line

    “That is how we build Canada strong.”

    Said 20 times by 14 members since April 23.

    Every time it was said
Official Hansard

Mr. Speaker, it is an honour to rise in this House as I begin my journey as a member of Parliament for the wonderful riding of Scarborough Southwest. I am delighted to be back in the House after the summer break, when we had a chance to talk to our constituents, go to events and meet with a lot of constituents to find out the struggles they are facing. It is great to be back to speak to the issues we heard about from our constituents. My riding has people from all different backgrounds; it is a very diverse riding. People across my riding, just like those across Canada, are struggling right now, especially with affordability and making ends meet. Today, I am delighted to speak on behalf of my constituents about Bill C-38, the Canadian fuel affordability act. We have heard from across the aisle and throughout this afternoon about the importance of this legislation. This government’s effort has been to make life more affordable for Canadians across this country. Canadians are living through a period of economic uncertainty shaped by global instability and rising costs. The United States, as we know, has imposed new tariffs on Canada designed to hurt and divide us. At the same time, we know what is happening across Europe and the Middle East, which is also driving up prices around the world, especially here at home. In response, our government continues to focus on what we can control: building a strong Canadian economy, diversifying our trade partners abroad, delivering responsible fiscal management and supporting Canadians who are under pressure from everyday expenses. Throughout the summer, I heard from my constituents about the increase in the cost of living. Many are worried about the increasing price of essential goods like fuel, food, housing and other daily necessities. Before I forget, I would like to mention that I will be sharing my time with the member for Portage—Lisgar. Our government understands these pressures, and we are taking concrete and responsible actions to ease the burdens that many Canadians are facing, all while safeguarding long-term economic stability. That includes immediate support for daily costs. We know we have to make long-term plans, but at the same time we have to help the people who are struggling this very day. In April, we temporarily lifted the excise tax on gasoline and diesel through the summer months, initially planned until Labour Day. On the first day that took place, which is actually the same time I joined this House, back in April, gasoline prices declined by 11¢ per litre. That is real money back in the pockets of hard-working Canadians. This delivered immediate relief to consumers, including those in my riding of Scarborough Southwest. Knowing that Canadians are still feeling pressure, earlier this month the Minister of Finance announced an extension of this measure until January 31, 2027, after which 50% of the regular excise tax rate would apply from February 1 through to March 31, 2027. This measure is expected to continue reducing Canadians’ costs at the pump by up to 10¢ per litre for gasoline and four cents per litre for diesel until February 2027, and by up to five cents per litre for gasoline and two cents per litre for diesel until April 2027. These are measures that we know work, and we are continuing them. All told, they are estimated to provide $5.3 billion in total tax relief for Canadians, of which $2.9 billion is from the September extension alone. The pause in the excise tax lowers prices at the pumps and helps reduce transportation and production costs across the economy. We heard in this House and from those across our ridings about the impact. It is supporting families, farmers, truck drivers and the businesses that rely on them to move goods. In fact, all Canadians will see benefits from this measure. However, that is not the only thing we have done to make life more affordable for Canadians. Our government has also introduced the new Canada groceries and essentials benefit, which is providing additional significant support for more than 12 million Canadians. It is based on the goods and services tax credit, but it is more generous. As of July 2026, payment amounts have increased by 25% for five years, and in June, those 12 million Canadians received a one-time top-up payment. Again, that is real money back in the pockets of hard-working Canadians. Combined, this means that a family of four will receive up to $1,890 this year and a single person up to $950 this year. We know that housing affordability continues to challenge many Canadians, especially those trying to purchase their first home. This is why we eliminated the GST for first-time homebuyers on new homes valued up to $1 million, a measure that can provide savings of up to $50,000. We also extended the grace period under the homebuyers’ plan from two to five years for participants making a first withdrawal, until the end of 2028. This will provide cash flow relief of up to $4,000 per person per year for three years and will help households manage early expenses during the crucial first year of home ownership. I know how important that is, because when I talk to young people, some of them feel like they do not know if they can even dream of buying their own home for the first time. Taken together, these and other actions reflect a balanced approach. What that means is immediate cost relief, targeted support for those who need it most and prudent management of the public purse. Canada has the fiscal capacity to draw on our strengths and respond to global challenges. That is exactly what we are doing. We had the fastest-growing economy in the G7 in Q2 2026 and have managed our finances in a way that has reduced our deficit for 2025-26. While revenues have grown, we have directed most of this increase to helping Canadians with the cost of living. This is the balance that Canadians expect from their government: responding to global challenges with a responsible and pragmatic fiscal approach. We cannot control global forces. As our Prime Minister has said, we cannot expect to control what is happening outside, but we can control what happens here. We cannot control the global forces that drive up prices, but we can control how we respond to them. Our government is cutting taxes to help Canadians manage everyday expenses while we build a stronger, more independent economy. We will continue to respond to affordability pressures with fairness, discipline and a focus on results for Canadians, because that is what Canadians expect and that is what Canadians deserve. That is what Bill C-38 would do. This is how we build Canada strong for all.

Doly Begum, Scarborough Southwest

Liberal
“I support this bill because people need help with fuel costs right now. It gives quick, temporary relief, while we also work on separate, long-term plans.”
Official Hansard

Mr. Speaker, we believe in building an economy that is strong, that helps people grow and that helps people be independent in their own ways, even when they need support, as we saw during COVID, for example. What we are facing right now is unprecedented, so we need to provide support immediately. This is an immediate support that would help people get going to make ends meet. In terms of long-term efforts, we will be doing those as well. They are two different things, and we need to be very focused on both of them.

Jean-Yves Duclos, Québec Centre

Liberal
“Some members say the government cannot work on trade abroad and help people with the cost of living at home at the same time. I want the member to explain why it is important to do both.”
Official Hansard

Mr. Speaker, I was obviously delighted, as many others were, to listen to one of our newest members of Parliament on this side of the aisle. I listened carefully and heard from her that she believes it is important both to fight for the interests of Canadians and Canada outside of Canada by building more alliances and by diversifying our trade relationships and to fight for the interests of Canadians, especially those who are struggling more with the high cost of living. Why, in her view, is it important to do those two things, especially in the context of what we hear from opposition MPs, who say that the Prime Minister should not try to address both challenges at the same time?

Doly Begum, Scarborough Southwest

Liberal
“We cannot depend only on the United States anymore. Canada needs to trade with more countries around the world and build new partnerships to strengthen our economy.”
  • Reply to a debate question

    Relevance 44 of 100

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Official Hansard

Mr. Speaker, we have had a good relationship with our friends next door, the United States, and in the past it worked really well. Unfortunately we are facing a time right now when we cannot depend on that friend. Therefore, we must diversify, we must strengthen our economy and we must face the challenges we have at this very moment, which means that, while we have these kinds of measures, we also need to strengthen our ties across the world. We have great partners that are really interested. During the summit, we have seen the type of interest we are getting from across the world. It is high time that we diversify our trade and build those partnerships as well, because Canada is a place where people want to invest. We are lucky to have a wonderful country like this where people are looking to unlock those opportunities.

Doly Begum, Scarborough Southwest

Liberal
“Our government is already doing what the member asked for. We are listening to people and giving them the help they need.”
  • Reply to a debate question

    Signal 36 of 100

    Much of this statement went to praise, blame, greetings, routine procedure or general stories rather than reasons, requests or specific points.

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    Clarity 47 of 100

    Much of this statement used imprecise wording, lacked details on timing or responsibility, or made broad claims without support.

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Official Hansard

Mr. Speaker, that is exactly what we are doing. The Prime Minister has been in government for just over a year. I joined in the last couple of months, and I am so proud that the government really listens to the communities we are representing, understanding those challenges and doing exactly what Canadians want us to do, which is fight for them and put in the measures of support they need as well.

Doly Begum, Scarborough Southwest

Liberal
“We are working on many things to help Canadians. I want the opposition to stop delaying our work and support what we are doing.”
  • Reply to a debate question

    Relevance 46 of 100

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Official Hansard

Mr. Speaker, there are a lot of measures we are working on. I would like the other side, the opposition, to actually support our measures and help expedite and move them along so we can actually help Canadians from coast to coast to coast. People need our support. People need us to govern. I would like the opposition, instead of delaying and instead of talking about different tactics, to come on board and do what people want us to do.

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“I want the House to pass this bill to lower gas taxes. It does not matter which party had the idea first. It will help Canadians, and I want the member to agree.”
Official Hansard

Mr. Speaker, I have enjoyed the debate today, and I wanted to express the whole idea behind this. I have said this before. New Democrat Wab Kinew got elected and brought in getting rid of the tax levy on gasoline for the first six months, and I do think he also extended it. It was a great idea. I have been talking about the benefits of getting rid of the gas tax. That is one of the reasons that earlier the Prime Minister got rid of the carbon tax. It was the very first initiative he had. The issue is that it does not matter who comes up with the idea. I am grateful that we are going to be passing Bill C-38, because Canadians would actually benefit. Does the member not agree with that?

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“The member says he stands up for poor seniors, but Conservatives vote against helping them. They want to cancel the dental program that helps seniors on low incomes. I want him to tell us if he supports this dental program now.”
Official Hansard

Mr. Speaker, the member makes reference to the issue of the senior who makes $20,000 a year. I imagine that senior who is making $20,000 a year on a fixed income being able to receive dental benefits, yet the Conservatives want to take that dental benefit away from them. On the one hand, the member wants to stand up for seniors. On the other hand, he is voting against things that support affordability for seniors. Does that mean there is a new light that has shone over that particular member and he will say to the seniors who make $20,000 a year on a fixed income that he actually supports the dental program that the federal government is providing?

Jacques Ramsay, Parliamentary Secretary to the Minister of Public Safety

Liberal
“We acted quickly to pause the fuel tax after the war started. The Conservatives want to make this tax cut permanent, but no expert can predict oil prices that far ahead.”
Official Hansard

Mr. Speaker, after listening to the Conservatives, the perception is that this government has been slow to react. I would like to remind my friend on the other side of the aisle that the Iranian war started on February 28 and by April, this government came up with the fuel tax suspension. It is not adequate to say that we have been slow to react. I think we have actually been quite quick to react. The Conservatives would like to make this measure permanent. If they want us to make this permanent, then I must assume the Conservatives feel they can confidently predict oil prices over the next six to 12 months. I certainly have not heard any expert saying that, so I am curious to know how they can.

Greg Fergus, Hull—Aylmer

Liberal
“Permanently cutting taxes will not make life more affordable. If the government cuts taxes, oil companies will just raise their prices.”
Official Hansard

Mr. Speaker, a permanent tax reduction is the Conservatives’ go-to response in every situation. How would that improve affordability? How is that going to help people, when the reality is that if the Government of Canada permanently reduces taxes, the oil companies will jack up their prices?

Corey Hogan, Parliamentary Secretary to the Minister of Energy and Natural Resources

Liberal
“The world is moving toward green energy, but that transition takes time. It does not help Canadians who drive gas cars and face high fuel prices today. Pausing the fuel tax helps them right now. I want to know if my colleague supports short-term relief like this.”
Official Hansard

Mr. Speaker, I agree with my colleague that energy consumption is changing globally. Perhaps I do not see it happening as rapidly as he hopes, but I agree that the world is in the process of electrifying and greening, and cost curves are clear for renewables and storage. However, that does not provide relief today to Canadians affected by price spikes driven from global uncertainty or Canadians who own combustion engine vehicles. It seems to me that postponing the excise tax is a practical and prudent response in the short term. I would ask my colleague if he sees a place for short-term affordability measures, such as the suspension of the excise tax.

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“Our government is helping people with the cost of living in many ways. We cut the carbon tax, lowered income taxes, and are pausing the gas tax. We also created programs for dental care, medicine, and school food. I want to know if the member supports all these measures.”
Official Hansard

Mr. Speaker, the member has been interesting. What the Government of Canada has done is taken more of a holistic approach in dealing with affordability, because it is not new. It is something the Prime Minister has made a commitment to since the last federal election, and even prior to that. He has been Prime Minister for 18 months, and there have been a number of different measures. We can talk about getting rid of the carbon tax. We can talk about the income tax break for over 20 million Canadians. Today it is the excise tax on gas, which is important legislation. I am glad the Conservatives are going to support it. What about other initiatives that are also helping out with the issue of affordability, such as the dental program, the pharmacare program and the national food program in our schools? Does the member support the whole package?

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“The member did not answer my question about making life affordable. Our dental care program helps seniors who do not have much money. I want the member to answer: does he support government programs like that?”
Official Hansard

Mr. Speaker, the member did not answer the aspect of the question dealing with affordability by providing supports. Let me give a specific example about a senior on a fixed income, collecting $20,000 a year. The government has a program for dental services for that particular senior, and that makes the dental services more affordable for the senior. Does the member support that aspect of governance? Does he believe the government has a role in programs of that nature with respect to affordability?

Jacques Ramsay, Parliamentary Secretary to the Minister of Public Safety

Liberal
“I want the House to pass this bill. It temporarily pauses the federal tax on gas and diesel to help Canadians with high fuel prices.”
  • A repeated line

    “We have also made the national school food program permanent.”

    Said 14 times by 11 members since May 7.

    Every time it was said
Official Hansard

Mr. Speaker, I am very pleased to speak to the debate on the Canadian fuel affordability act. This measure is truly helping the people of my riding, La Prairie—Atateken, who sometimes have to travel long distances to get to work or as part of their job. Our government is well aware of the pressures associated with the cost of living in Canada, specifically the rising cost of fuel as the world faces serious geopolitical tensions. Across the country, we have seen gas prices skyrocket. This is causing difficulties for many Canadians, so much so that filling up at the gas station has become a source of anxiety for many people. Our government understands this situation well. That is why we have decided to extend a concrete measure that gives consumers a break. One day, all Canadians will have electric vehicles and will no longer be at the mercy of international events, such as closures of the Strait of Hormuz. However, that day has yet to arrive. That is why the Prime Minister announced in April that the government would suspend the federal excise tax on gasoline and diesel until Labour Day, September 7. Still, our approach has always been flexible. It became clear over the summer that geopolitical tensions were still elevated, which was keeping prices at the pump high. That is why the Minister of Finance announced this month that the full suspension would be extended until January 31, 2027, followed by a 50% reduction until March. In my opinion, this decision demonstrates that our government is truly listening to Canadians, studying the facts and developing tangible measures to support Canadian families and businesses. With this announcement, we are suspending the federal excise tax of 10¢ per litre of gasoline and four cents per litre of diesel. We estimate that this suspension of the excise tax is saving Canadian consumers about $5.75 on filling a 50-litre tank using regular gasoline. This suspension comes on the heels of the cancellation of the federal consumer fuel charge that was enacted on April 1, 2025, which was already delivering direct savings to Canadians at the pump. That measure helped reduce overall inflation and lower costs for all Canadians. The suspension of the federal excise tax is a step in the same direction. This is just one way our government is working to make life more affordable for all Canadians. I want to mention the tax cut to lower the tax burden on Canadians, which came into effect on July 1, 2025. Canadians are paying less tax because our government lowered the first marginal personal income tax rate from 15% to 14%. Thanks to this change, 22 million Canadians now benefit from tax relief of up to $840 per year for a two-income family. The government also cut the GST for first-time homebuyers of new homes valued up to $1 million and reduced it for new homes valued between $1 million and $1.5 million. This represents savings of up to $50,000. Furthermore, we are helping 12 million low- and moderate-income Canadians pay for essential goods with the new Canada groceries and essentials benefit. Since the spring, we have been making regular, increased payments to the families and individuals who are eligible for this benefit. The amount has been increased by 25% for five years, starting in July 2026. These payments, made at the start of each quarter, will provide quick access to funds to help families cover their day-to-day expenses. In total, these measures mean that a family of four will receive up to $1,890 this year thanks to the new Canada groceries and essentials benefit. They will then receive $1,400 per year for the next four years. A single person, meanwhile, will receive $950 this year and $700 a year after that. Our government also made the national school food program permanent. I am especially proud of this measure, which provides school meals to nearly 400,000 children every year, saving participating families with two children in school roughly $800 a year in grocery bills. Another equally fundamental but less publicized measure is our roll-out of automatic federal benefits. By the 2028 tax year, 5.5 million low-income Canadians will automatically get the benefits they are entitled to, including the Canada groceries and essentials benefit and the Canada child benefit. Automatic income tax filing for these Canadians ensures that they receive the benefits they are eligible for without having to apply. Finally, I will close by also mentioning the ambitious measures we have implemented to foster competition in the telecommunications and financial services sectors in order to lower prices, allowing Canadians to change providers more easily and pay less in banking and service fees. At a time when disruptions in global supply chains and geopolitical tensions are pushing prices up, our government is taking action. Our government wants to build a stronger economy to create more job opportunities and higher wages. Simultaneously, we will lower costs to make life more affordable across the country. That’s how we can ensure more certainty, security and prosperity for more Canadians, now and in the future. I hope this bill will provide Canadian consumers with some much-needed relief when it comes to gasoline and diesel.

Jacques Ramsay, Parliamentary Secretary to the Minister of Public Safety

Liberal
“I support pausing the fuel tax right now. Foreign wars and supply problems make fuel expensive today. We can bring the tax back once these risks end.”
Official Hansard

Mr. Speaker, it is important to understand the timing of the tax suspension. Our Conservative friends will tell us they have been advocating for this measure for years. However, a measure is only effective when it is implemented at the right time. Right now, we are experiencing geopolitical tensions due to the war in Ukraine and especially to the war in Iran and the closure of the Strait of Hormuz. A measure is only effective when it is implemented for a specific reason, and we will be able to cancel it once this risk disappears, which I hope will be as soon as possible.

Jacques Ramsay, Parliamentary Secretary to the Minister of Public Safety

Liberal
“I want this bill to pass. Pausing the fuel tax is only temporary, and it is keeping gas prices lower. Without it, gas would likely cost over $2 a litre because of global events. I see no proof that oil companies are taking the extra money, though we should keep watching them.”
Official Hansard

Mr. Speaker, my colleague is glossing over the fact that this measure is temporary, whereas he is proposing a measure that will be permanent and may not be appropriate. That said, his concerns are valid. I think we do need to monitor the situation. I have no indications and have not heard anything to suggest that the tax suspension has benefited the oil companies. Obviously, the cost of gas has continued to rise, but I think that can mostly be attributed to the closure of the Strait of Hormuz. I think that, without the tax suspension, the price at the pumps would be even higher today, probably above $2 per litre.

Louis Villeneuve, Brome—Missisquoi

Liberal
“My colleague treated thousands of patients as a family doctor. I want to know why affordability is so important to him.”
Official Hansard

Mr. Speaker, as a family doctor, my colleague treated thousands of patients during his career. I would like to know why affordability is so important to him.

Jacques Ramsay, Parliamentary Secretary to the Minister of Public Safety

Liberal
“As a former doctor, I know that people need enough money, good jobs, and healthy food to stay healthy. Having enough money is the most important part of good health. Our government is always working on this.”
Official Hansard

Mr. Speaker, I thank my colleague from Brome—Missisquoi for that excellent question. As we know, affordability means economic security, income, employment, food security, and healthy food to eat. These are all key determinants of health that enable Canadians to be productive and enjoy life. This is what I saw every day in my office. Our job is not just to heal all ills. We must also advocate for quality of life, and that starts by looking at the key determinants of health, economic security being probably the most fundamental one. I am very pleased to say that my government is constantly thinking about this issue.

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