DAN ALBAS -- Opposition parties cited several key concerns: the program would fail to help those most in need.

In my report last week, I discussed two recently announced proposals from the Trudeau 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 these ‘bad vibes’, the Trudeau Government has proposed two programs. The first is a "GST Christmas Holiday"—a temporary expansion of GST-exempt items running from December 14, 2024, to February 15, 2025.

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

I say ‘so called’ rebate, as many pointed out to me that these cheques were not rebates, but this money would be borrowed by the Federal Government, add to our deficit and ultimately be paid by our children and grandchildren in higher taxes down the road. Those who regularly follow my reports will note that we have essentially doubled our interest payments servicing the federal debt. As of the last budget, the expect debt servicing for this year will cost over $52 Billion- far more than we spend on Health Transfers to provinces or the Canadian Armed Forces.

Following up on my report from last week, I can now confirm that 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? The Leader of the Official Opposition, Hon. Pierre Poilievre, has made the Conservative Party's position clear: they support permanent tax reductions, such as eliminating the federal carbon tax and removing GST on new housing up to $1 million in value.

The Official Opposition opposes 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 that 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 represented poor tax policy, and more spending can lead to more inflation.

To date, Prime Minister Trudeau has not indicated whether or how he will modify this proposal to address these concerns and gain support from one or more opposition parties.

A recent Leger poll reported by the National Post found that only one in five respondents considered the tax holiday and promised $250 cheque to be "good measures" that would help people "cope with inflation." The poll also revealed that Canadians overwhelmingly viewed 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 Dan.Albas@parl.gc.ca (mailto:Dan.Albas@parl.gc.ca) or call toll-free 1-800-665-8711.