With the House of Common back in session, Opposition Day is back. Opposition days, also known as 'supply days'  are where the opposition parties can table a motion for debate in the House.

For the Official Conservative Opposition, the motion we tabled this week read as follows:

“That, in the opinion of the House, given that the government's tax increases on gas, home heating and, indirectly, groceries, will fuel inflation, and that the Parliamentary Budget Officer reported the carbon tax costs 60% of households more than they get back, the government must eliminate its plan to triple the carbon tax.”

Triple the carbon tax?

I have found that many Canadians are unaware that the Trudeau Liberal Government plans to raise the carbon tax from the current level of $50 a tonne to $170 a tonne by 2030, with increases each and every year.

This breaks the promise the Trudeau Liberals made in 2019 when they stated that “The plan is not to increase the price(carbon tax) post-2022”.

This new rate will also apply to carbon taxes created under provincial law, such as British Columbia.

Should a provincial government refuse to increase their carbon tax in step with the federal government, the Supreme Court of Canada has confirmed that the federal government can impose its own carbon tax as a backstop.

Why does the Official Opposition believe this is a problem? 

As we have watched 40-year high inflation take hold in Canada, one of the key drivers of inflation is the high price of gasoline.

Higher gas prices not only harm household budgets, but they also increase transportation costs and in turn raise prices on groceries and other consumer goods – all increasing inflation.

Earlier this year the Bank of Canada was asked to calculate the cost of the carbon tax ,at current levels, and how that affects inflation here in Canada.

The answer from the Bank of Canada was alarming: “if the charge (carbon tax) were to be removed from the three main fuel components of the consumer price index (gasoline, natural gas and fuel oil) it would reduce the inflation rate by 0.4 percentage points. In other words, if that policy had come into effect at the start of the year, January’s inflation rate would have been 4.7% instead of 5.1%.”

Defenders of the carbon tax will often reference that there are rebates. 

Unfortunately, rebates do not fairly reflect the differences in services available here in Canada.

For someone in Toronto who does not own a car they will likely come out ahead under any carbon tax. 

However, for someone living in a rural community, like Hedley B.C., where there is no high school, no middle school, no hospital, no major grocery stores, and very limited transportation options, they are forced to drive to communities such as Princeton and Keremeos and are much more severely impacted by the carbon tax as a result.

There is also a larger problem that our major trading partners, the United States and Mexico, do not have a carbon tax which means that producers located in those countries can undercut Canadian producers and at the same time there is no actual emission being reduced. 

Finally, we must also recognize that not every factor that drives inflation is within the control of the Canadian Government. 

International supply chain factors and Putin’s war against the Ukraine are all outside of the control of the Bank of Canada,  when the Bank raises interest rates.

This leaves the question what can the Government of Canada do to help increase affordability and reduce inflation? 

As the Bank of Canada has confirmed the carbon tax is inflationary, the Official Opposition is calling on the Trudeau Liberal government to stop its planned tripling of the carbon tax.

​My question this week:

Do you agree?

I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.

​This week the House of Commons is back in session in Ottawa.

The government has introduced two bills intended to provide relief for some Canadian families struggling with higher interest rates and inflation.
 
The two bills are C-30 “An Act to amend the Income Tax Act (temporary enhancement to the Goods and Services Tax/Harmonized Sales Tax credit)” and Bill C-31 “An Act respecting cost of living relief measures related to dental care and rental housing”.
 
Bill C-30 proposes to raise the GST rebate to a low-income earner by 50% of what they normally would receive on their GST rebate.

This one-time measure, over the proposed 6-month time frame, will cost the treasury $2.5 billion.
 
What would the increase in the GST credit look like?

Here are a few hypothetical situations:

A low-income senior couple with a combined annual income of $45,000 would receive an additional $353.30.

A single student who makes $25,000 would receive an additional $612.
 
A single parent with one child and $45,000 in net income would receive an additional $257.15 .If they earned $50,000, that additional payment would go down to $132.15.

However, if that single parent earned above $55,000 in net income, they would receive no payment. 
 
Similarly, a couple with two children and $45,000 in net family income would receive a reduced extra payment of $337.65 (compared to $467 at $35,000 in net income), would receive $87.65 at $55,000 net family income.

The GST credit increase is completely phased out at a net income of $58,500 or above.

Bill C-31 proposes a two-year dental benefit for children under 12 that would provide a maximum of $650 a year per child, for two years, for families earning less than $70,390 a year.

Families that have an income between $70,390 and $90,000 would see the benefit reduced to somewhere between $390 down to $260, depending on the income cutoff.
 
What is interesting is that thus far the Liberals are proposing that this dental benefit would be “provided upfront, before the child sees the dentist, and parents won’t have to automatically submit receipts or return any unused money…” as reported by the National Post.

It should be noted that dental care programs for low-income children already exist in all provinces and territories except Manitoba and the Northwest Territories and almost 70 per cent of Canadians have dental coverage.
 
This creates two challenges.
 
Without any type of verification process the program could be open to abuse and fraud.
 
Secondly, without any verification or billing information being required, there is no opportunity for the government to compile data that can be used to assess and monitor how well this program is actually working.
 
The Canadian Dental Association has stated that “the federal government can best ensure funding will quickly and efficiently benefit those Canadians who need it most: namely, by collaborating with provinces and territories to stabilize and enhance existing provincial and territorial dental care programs.”
 
While this advice is reasonable the Trudeau Liberal Government has not followed it.
 
Scotiabank has also said that these new spending announcements will increases the likelihood the Bank of Canada will need to raise interest rates above 4%.

If that occurs, it will financially punish many citizens who will not benefit from these proposed new programs.
 
My question this week:

Are you supportive of Bill C-30 and C-31?

I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.

​In my last report I referenced the recent news that the Bank of Canada had once again increased its benchmark interest rate (also called the 'overnight rate') a further 75 basis points from 2.5% up to 3.25%.

Since March of this year, the rate has increased by 300 basis points, which is the largest increase in roughly 30 years. 

I closed off my report asking If your household “has, or will be adversely impacted by these increased interest rates, or even if you are in a situation where you are not impacted, I would appreciate hearing from you.”

Over the past seven days I have received a strong level of response to that question, and I would like to thank the many people who took the time to get back to me on this issue.

After hearing from so many, a clear pattern began to emerge.

For those who are wealthier, typically they were concerned about rising interest rates and the possibility of a recession but were otherwise not personally impacted. 

Some even reported that were earning more money because of higher interest on certain investments.

However, for many working families struggling to pay bills and having some outstanding debt, many were severally impacted.

Several people took the time to share, in detail, just how hard financially, in terms of actual dollars, they were attempting to mitigate and absorb.

The anxiety and stress that is being caused as the Bank of Canada continues to raise interest rates is causing serious hardship for some Okanagan families.

It is fair to say that some family households are carrying a far larger burden than others as interest rates continue to rise.

Many asked when will the increases end? 

This is a fair question without a simple answer.

Last week our Federal Finance Minister, while in Vancouver, stated:   "We also understand right now that our government has a real responsibility to be fiscally responsible".

Flash forward to this week and our same Finance Minister, with the Prime Minister while in New Brunswick, announced $4.5 billion in spending for “inflationary relief”. 

Why does this matter?

Many economists and major Canadian Banks are warning Prime Minister Trudeau that the relentless spending by his government is part of what is driving up inflation, making the problem worse.

Bank of Nova Scotia economist Derek Holt, in response to this week's $4.5 billion spending announcement, stated:

“It seems sensible to assume that this will add to pressures on measures of core inflation,” and further stated “Any belief that it will ease inflationary pressures must have studied different economics textbooks.”

As reported by Bloomberg, the Canadian Imperial Bank of Commerce, Bank of Montreal and Bank of Nova Scotia, have all released reports expressing concerns over using revenue windfalls for additional spending.

I have two concerns: one,

1) My Conservative caucus and I have raised inflation and cost of living concerns formally with the government for months.

After a summer of silence, to now hear that some planned help for some families is welcome, although it is clearly not designed to be broad based enough to help the general population with the cost of living increases.

In addition, due to new legislation being required, it is an open question when these supports will be forthcoming. 

2) These supports are new spending which, as indicated earlier, will have inflationary results.

Conservatives have been proposing a 'pay as you go' rule where government departments should find an equal amount of savings before proposing new spending.

In Budget 2022 the government argues that it will have a 'policy review' where it anticipates it can find savings in its existing budget. Had it paired these new spending supports with savings elsewhere, the inflationary concerns would in many cases be offset or lessened. 

My question this week:

Are you concerned about the ongoing spending by PM Trudeau, or do you believe it is necessary in these challenging times of inflation and higher interest rates?

I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.

​Canadians woke up to news this week that the Bank of Canada has once again increased its benchmark interest rate (also called the 'overnight rate'), a further 75 basis points from 2.5% up to 3.25%.

Since March the rate has increased by 300 basis points, which is the largest increase in roughly 30 years.

For many Canadian households, how this increase in the benchmark interest rate will impact your household budget will depend on a number of factors.

For those who have a mortgage that is locked in or have a 'fixed payment' this may be of little concern.

For others who have a variable payment that rises with the cost of increased interest, this may be a very serious concern.

Some may have a variable rate mortgage where their costs simply go up or down with the prime rate (plus or minus any negotiated discount) which tracks the Bank of Canada benchmark rate.

Others with variable rate mortgages with a 'trigger rate' may be contacted by their bank or lending institution, advising them that because rates have risen significantly, their scheduled payment amount must be higher as the interest portion on their mortgage is now higher than the principal payment.

As we have had historic low interest rates for an extended period of time, these 'trigger rate' increases are not common and those with this kind of mortgage will likely have some 'sticker shock' when they see the revised payment amount. 

Conversely for those with an interest only line of credit or other forms of debt such as credit cards, there may also be a significant increased payment because of this interest rate increase. 

One of the challenges when trying to assess the impact to family households of these types of increases, on debt related interest payments, is a lack of region-specific information.

In addition, with many mortgage lenders in the marketplace, the impact on some borrowers may be very different from others as a result of contrasting lending practices.

While there is an Ottawa imposed “stress test” that is applied uniformly across the mortgage industry, as some citizens have pointed out, it does not take into account the increase in local property taxes that in many cases are also well above inflation.

In addition, for those who live in strata properties, insurance costs have also gone up with premium increases significantly beyond the rate of inflation.

For those that are impacted by higher interest rates, let us recognize that -- with less disposable income -- there is less money to put into our local economy. 

My purpose in raising these concerns related to the increase in the interest rate is to ask you if this is something that will impact your household to the point of serious concern?

If your household has, or will be adversely impacted by these increased interest rates, or even if you are in a situation where you are not impacted, I would appreciate hearing from you. 

I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.