Unaffordability isn’t just a bad vibe

Photo: Parliament of Canada

Kelowna-Lake Country MP Tracy Gray

Affordability remains a pressing concern that I consistently hear about from residents. Canadians are still facing a cost of living crisis, with more and more people unable to afford even basic necessities.

Now, the Liberal government has announced its solution—a two-month temporary GST “trick” reduction on select items, to be implemented by retailors the evening of Friday, Dec. 13. Despite the government’s fanfare, this measure is a band-aid solution that does not address causes of cost increases and has garnered little public support.

The finance minister claimed there’s a disconnect between “positive economic data” and how Canadians feel, leading to people talking about a “vibecession.” I’m not sure what people she’s referring to as I’ve not had one person mention this, nor know anyone who’s heard of this word before. The new temporary tax measures, she argues, will help bridge the gap between Canada’s economic picture and how Canadians interpret it.

Statistics Canada figures show food prices increased 35% since 2015, with grocery prices jumping 20% the past three years alone. Food prices rose 36% faster in Canada than in the United States – a gap that started when the federal government’s carbon tax came into effect, increasing costs across the agri-food supply chain. Families will spend $700 more on food this year than last year. Fuel costs have soared and housing costs have doubled. More than two million people are going to Canadian food banks in one month and reports of child poverty and scurvy are increasing in Canada. It isn’t just a “bad vibe” people are feeling.

Canada’s GDP per capita has fallen by 3% over the last four years. That means there’s less money to go around to more people and Canadians’ quality of life has decreased. As a comparison, the GDP per capita of the United States increased by 7% in the same period.

The Organization for Economic Co-operation and Development expects Canada to have the slowest growth in per capita GDP among its 38 member countries over the next 40 years without fiscal and economic policy changes in Canada.

The Canadian dollar has dropped to the lowest it’s been in five years and is now hovering around 70 cents, compared to the U.S. dollar. Our weak Canadian dollar makes buying anything from the U.S. more expensive.
Unfortunately, the worst is still yet to come. Government MPs, supported by NDP MPs, don’t want to talk about the fact they voted to increase taxes on the very same products they claim they’re giving a temporary tax reduction to. On April 1, 2025, the excise tax on all liquor will increase and the carbon tax will also increase 19%, on the way to be 61 cents per litre (of gasoline).

Additionally, I’ve heard from many local small business retailers who are upset with the confusing GST tax removal for a couple of months. There are business organizations across the country who say the changes will cause significant logistical consequences for small businesses.

The Canadian Federation of Independent Businesses stated the tax measures “may add confusion and complexity for general retailers with both taxable and new exempt items,” and “Canadians need permanent, not temporary tax relief.”

Ian Tostenson, president of the B.C. Restaurant and Food Services Association, said the tax relief will likely have little effect in stimulating the restaurant economy, noting he thinks “it’s a misguided policy.”

These organizations are correct in stating we need real policies to combat rising unaffordability. As such, Conservatives will axe the carbon tax to reduce costs of fuel, food, construction and everything shipped, which has increased the cost of almost everything.

Conservatives will axe the carbon tax on everything, for everyone, forever and cut the GST on new homes sold under $1 million, to build more homes. The will save families up to $50,000 on their home purchase. These are real solutions to combat unaffordability.

Feel free to reach out to me if you have thoughts to share on the so-called “vibecession,” the government’s temporary tax reprieve on select items or the impending tax increases on April 1.

Please reach out to 250-470-5075 or [email protected] if have any thoughts to share–on this issue or others—or if you need assistance with any federal programs.

Tracy Gray is the Conservative MP for Kelowna-Lake Country.

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