GST break and $250 Working Canadians Rebate 'fiscally unwise'

Photo: Parliament of Canada

Central Okanagan-Similkameen-Nicola MP Dan Albas.

We are just days away from Dec. 14, the day when the Liberal government’s temporary expansion of select GST-exempt items is scheduled to take effect.

I mention this because Bill C-78, which enables the temporary expansion of GST-exemption on items between Dec. 14 and Feb. 14, still needs to pass in the Canadian Senate.

Does this mean the GST “holiday” will be delayed? While technically that is possible, despite the prime minister’s claim to have appointed “independent” senators, I expect the bill will be passed and will receive royal assent in time to meet the governments politically selected timeline.

Regarding GST exemptions, the House of Commons voted earlier this week on the Conservative’s plan to permanently exempt new homes under $1 million from GST. The tax policy would save Canadians up to $50,000 on the price of a new home and it is estimated it would stimulate the construction of 30,000 additional homes and apartments annually across Canada.

Surprisingly, the Liberal MPs voted against this measure. As noted by many experts and stakeholders, it appears contradictory to promote a temporary GST exemption on items like junk food, candy, select alcohol and video gaming systems while opposing a policy that would make new housing more affordable.

It is understandable why during its review of the bill, some senators said they found the Liberals' temporary GST exemption policy to be both "ill-considered" and "decidedly unserious."

Next week will be the final sitting week of the House of Commons before its winter break. On Tuesday, the government will present the long-delayed Fall Economic Statement, which will provide Canadians with a clearer picture of the country's current federal fiscal position.

The Fall Economic Statement will also provide an opportunity for the government to outline its future spending priorities. I am particularly interested in its projections, given the prime minister's promise to NATO allies to meet the 2% of GDP target by 2032. Further complicating the fiscal picture is his government's reliance on the NDP to maintain power. The recent credit downgrade of British Columbia from its triple-A rating demonstrates the risks of mismatched deficit spending and revenue.

Recent leaks to the media suggest this dynamic between deficits and revenue may explain rising tensions between the prime minister and his finance minister over the government’s Working Canadians Rebate, a proposed $250 payment planned for early spring 2025. The rebate would be distributed to 18.7 million Canadians who worked in 2023 and earned individual net incomes up to $150,000.

The reporting indicates finance officials consider both the GST break and $250 cheque pledge "fiscally unwise," while the Prime Minister's Office views these as important politically strategic spending measures.

My question this week:

Do you support the government's proposal to send $250 cheques to 18.7 million working Canadians who earned up to $150,000 in individual net income during 2023? Why or why not?

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.