MP Report: Tax increases and inflation


If you think life is getting more expensive every day, you’re right.

This week, inflation hit 5.7%. The last time inflation was this high, people were hearing the word “internet” for the first time – in 1991. Yet, the federal government is still moving forward with increases to two federal taxes.

I’ve questioned the finance minister numerous times in the House of Commons about what the federal government’s plan is to tackle inflation in Canada. Rather than presenting a plan to address inflation and cost-of-living increases, that she simply states increases are happening across the G7.

This is true, but what separates Canada from countries like the U.S., Germany and the U.K. is that our federal government has not announced any measures to tackle inflation. Canada should be looking to follow the example of our allies and take action so Canadians are not left to fend by themselves.

I am also hearing from many constituents about the recent surge in gas prices. People I speak with cannot remember the last time it cost so much to refuel their vehicles.

This week, the Governor of the Bank of Canada, Tiff Macklem, tabled documents with the Standing Committee on Finance revealing the government’s federal carbon tax increased inflation by 0.4%, compounding the cost-of-living crisis.

The carbon tax is set to increase again on April 1 by another $10 per tonne, costing families and transportation drivers across Canada an extra 11 cents per litre at the pump.

Increases in gas prices will lead to price increases in everything else, which will only add to Canada’s record inflation. The cost of goods sold goes up for small businesses hitting their bottom lines, everyday necessities like groceries rise as the cost of transportation increases, and families driving kids to activities will cost more.

Canadians simply cannot afford the high-tax high-spend agenda and the official Opposition has called on the government to halt this tax increase.

While some residents may look to turn to electric vehicles in the long-term, they remain costly even with subsidies. Though new residential complexes often will have a few electric charging stations, these are not widely available yet, and I’ve talked to many residents who live in multifamily buildings with no charging stations, making it a barrier for them to even consider an electric vehicle at this time.

While international conflicts like Ukraine have contributed to fuel increases, they do not solely explain the rise in the price of gasoline. It is not the invasion of Ukraine that will add 11 cents a litre on April 1, that will be the federal government choosing to raise the floor of the federal carbon tax at a time where Canadians are struggling to stay afloat with record price increases.

Politicians will often say there is no magic wand to keep gas prices low. However, such broad statements ignore that small measures such as freezing, deferring or scrapping tax increases can provide some relief. Where we can offer that relief, we should.

Another place where the federal government should be offering relief is to our local wineries, breweries, cideries, and distilleries. Excise escalator taxes on their products are also set to rise April 1. I’ve called on the government to halt this increase.

As a result of the cycle of lockdowns and restrictions over the last two years, many of these small local alcohol producers have lost their most profitable avenues of sale. Onsite sales and purchases, through restaurants, bars, and hotels, were at times nonexistent and their bottom lines were squeezed with higher costs. It will take a long time to recover even as restrictions are lifting.

The kicker here, is that these excise taxes are based on the Consumer Price Index, meaning, it’s based on inflation. Therefore, it will be higher than ever before adding to inflation increases itself.

If the federal government does not take our advice to halt all tax increases, residents and small businesses here in Kelowna-Lake Country will be served with these two April Fool’s Day tax increases.

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