Official Hansard
Mr. Speaker, I am pleased to rise to take part in today’s important debate on the third reading of Bill C-38, the Canadian fuel affordability act. This bill aims to extend the federal excise tax on gasoline, diesel and aviation fuels. This is a very important issue at a time when many Canadian families continue to face a high cost of living. Some of them find it difficult to afford groceries, fill up their gas tank and pay all their bills. Before we continue, I would like to clarify a few things about the affordability challenges we are all facing. Let me start by saying that this is a global issue. Ultimately, all OECD countries are now feeling the effects of an affordability crisis that is challenging for many households. We need to try to put this into context. In fact, we need to go back to the time of the COVID‑19 pandemic. I know that seems like a long time ago, but it really had a significant impact on the global economy, especially in the period following the COVID‑19 pandemic, when consumer spending here, as elsewhere, rebounded very quickly, even as supply chains remained disrupted and were not yet operating at full capacity. This led to high and rapid inflation, here as elsewhere. In Canada, for example, the inflation rate reached 8%, a level not seen in generations. As a result, many Canadians, as well as Americans, Europeans, and Japanese, were caught off guard by this rapid rise in inflation and all the upheaval it caused. Just as we were starting to get a bit of a handle on the situation, the war in Ukraine broke out, triggering a sharp increase in energy prices due to the entirely justified boycott of Russian oil and natural gas exports. Ironically, some countries are currently backtracking on that boycott, but that is a discussion for another day. All of that contributed to a sharp increase in energy prices, which has kept inflation high and forced central banks to raise interest rates very quickly. This rise in interest rates also had an impact on housing affordability, as mortgage rates suddenly began to rise rapidly. Meanwhile, very few Canadian households were prepared to cope with those rising mortgage rates. In many cases, they rose from barely 1% to 3%, 4% or 5%. Needless to say, that can dramatically alter a family’s budget. Thus, a global crisis and a full-blown energy crisis were followed by shocks in food production, since Ukraine was also a major grain exporter. The price of raw food materials, in particular, rose rapidly as a result. All of this happened at the same time and, to make matters worse, in February 2026, a new war broke out in the Middle East, which led to the closure of the Strait of Hormuz. Suddenly the price of oil was back up to $100 a barrel. Just when things were beginning to get back to normal, everything went off the rails again. This situation began a long time ago outside of Canada, and it is complicated for us and for other countries. It is also worth noting, and so I will point it out, that there is a difference between the very high cost of living caused by all of the crises that I just mentioned, which caused price increases year after year, and the rate of inflation. As we saw this week, the inflation rate in Canada is currently 3.1% , which is not that far outside the Bank of Canada’s target range. The biggest factor driving inflation right now, in September and October 2026, is energy prices, gas prices. In Canada, the inflation rate is less than 2% if we exclude gasoline. The most recent shocks that have occurred since February 2026 because of the war in the Middle East are having a major impact on inflation. Inflation is returning to the target range, but the cost of living remains very high. That is the situation we are facing today. Similar conditions exist in many parts of the world. Naturally, our government cannot control decisions made elsewhere. What we can control, however, is what we do here at home. We can put in place measures that help families and households cope with these challenges. In a situation where the shock is external and persistent, government measures must be targeted, timely and temporary. They must be phased out quickly, because there is no certainty as to how long these external pressures may last. Through Bill C‑38, we will make it possible for millions of Canadians to save money by continuing to suspend the excise tax on gasoline. Canadians who drive to work and those who take their children to school or to sporting activities can continue to do so. The bill proposes to extend the suspension of the federal fuel excise tax until January 31, 2027. In February and March 2027, rates will then gradually return to just half their usual level, before returning, on April 1, 2027, to what they were. Canadians will therefore keep receiving relief of up to 10¢ a litre until January 31. Since that announcement was made, and although the price of crude oil remains above $100 a barrel, the price of gasoline has increased a bit, but remains relatively stable. As we had hoped, this shows that extending the excise tax suspension is directly benefiting Canadian consumers. We have seen all that take effect now. The government estimates that this extension will provide about $2.9 billion in additional tax relief to Canadians, raising the total fuel tax relief to approximately $5.3 billion in the 2026-27 fiscal year. It is important to mention that the cost of this to the government is substantial, at $5.3 billion. We are well aware that it is substantial. We are well aware that it takes effort, but it is effort that the government is willing to make, considering the steep rise in fuel prices confronting Canadian households. Something had to be done, and we acted quickly by implementing targeted measures aimed at lowering the price of gas. This is a temporary measure because, of course, we, like everyone else, want the crude oil market to return to more normal, stable levels, similar to where it was before hostilities broke out in late February 2026. We will reassess this at the appropriate time, but we are confident that this is a temporary situation and that our support measures should also be temporary. However, as I said, it is a substantial amount. We need to find a way to fit this $5.3 billion into the federal budget. As the Minister of Finance mentioned earlier today, the budget will be tabled on November 5, and we will be able to measure the progress of Canada’s public finances at that time. All that to say that $5.3 billion is no small sum. Canadian households can count on this significant support to help them get through this tough period. This measure is in addition to other measures that we have already put in place, such as the Canada groceries and essentials benefit and the tax cuts that we had previously made. These are a few measures that we have put in place and that we believe are necessary to help people get through this situation, but we should not assume that they will be permanent, because, as I just mentioned, the cost to the public purse is pretty substantial. However, there is a real need and we are in a real emergency, which fully justifies this situation. Bill C‑38 is a necessary tool. We have clearly recognized this reality, and we are responding to it. As Canadians continue to suffer the consequences of an uncertain global context, our government is taking action to help them. Bill C‑38 is a perfect example of that. It is a targeted measure that will help all Canadians cope with the cost of living. This is a measure that will provide real, direct help to families, workers and businesses. I therefore enthusiastically urge everyone here in the House to support Bill C‑38 and vote in favour of it.
