Federal Conservatives opposed to tax break and rebate

Photo: Contributed

Central Okanagan-Similkameen-Nicola MP Dan Albas

In my column last week, I discussed two recently announced proposals from the Liberal government that responded to what the finance minister called a "vibecession" here in Canada.

For context, a "vibecession" refers to a disconnect between a country's actual economic performance and the public's negative perception of it. Essentially, the Minister of Finance was arguing that it was Canadians sense of their quality of life that was the problem, not the economy.

To counter those “bad vibes”, the government of Prime Minister Justin Trudeau proposed two programs. The first is a GST Christmas Holiday—a temporary expansion of GST-exempt items running from Dec.14, 2024, to February 15, 2025.

The second program was the proposed Working Canadians Rebate, a $250 payment planned for early spring 2025. The rebate would go to 18.7 million Canadians who worked in 2023 and earned up to $150,000 in individual net income. The “so called” rebate was found wanting by many Canadians, who quite rightly pointed out it excluded persons with disabilities and retirees in favour of those making six-figure incomes.

I say “so called” rebate because many pointed out to me these cheques will not be rebates, but money borrowed by the federal government, added to our deficit and ultimately paid (back) by our children and grandchildren in higher taxes down the road.

Those who regularly read this column will note we have essentially doubled our interest payments servicing the federal debt. As of the last budget, the expected debt servicing for this year will cost more than $52 billion, far more than we spend on health transfers to provinces or the Canadian Armed Forces.

Following up on my column from last week, I can now confirm the GST Christmas “holiday" — the temporary expansion of GST-exempt items — passed second reading in Parliament, despite opposition from the Conservative Party.

Why did the official Opposition oppose this measure? Conservative Leader Pierre Poilievre made the party's position clear (his MPs) support permanent tax reductions, such as eliminating the federal carbon tax and removing GST on new housing up to $1 million in value.

(Conservatives) oppose these temporary tax measures, arguing they will provide minimal benefit to Canadians, while creating administrative burdens for retailers who must navigate unclear federal guidelines about which items qualify for the temporary GST relief.

The second proposed measure, the $250 Working Canadians Rebate, was withdrawn by the Liberal government and did not come before the House for a vote. The reason for the withdrawal was related to the fact none of the opposition parties were prepared to support that policy as it stood.

Opposition parties cited several key concerns—the program would fail to help those most in need, it represents poor tax policy and more spending can lead to more inflation.

To date, Trudeau has not indicated whether, or how, he will modify the proposal to address those concerns and gain support from one or more of the opposition parties.

A recent Leger poll reported by the National Post found only one in five respondents considered the tax holiday and promised $250 cheque "good measures" that would help people cope with inflation. The poll also revealed Canadians overwhelmingly view these policies as "purely electoral."

This comes amid recent news reports where former Bank of Canada governor Stephen Poloz stated, "I would say we're in a recession—I wouldn't even call it a technical one."

This brings me to this week's question:

Based on your own experiences, what do you think is the current state of Canada's economy?

I can be reached at [email protected] or call toll-free 1-800-665-8711.

Dan Albas is the Conservative MP for Central Okanagan-Similkameen-Nicola.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.