Former Bank of Canada governor David Dodge said the Liberal government’s proposed GST holiday and plan to send $250 checks to 18.7 million working Canadians is a “bad package.”
“Today is a little snack to ease the pain of what’s to come,” he told Vassie Kapelos on CTV News Channel’s Power Play Wednesday night.
Prime Minister Justin Trudeau announced last week that starting Dec. 14, several items including groceries, restaurant meals and toys will be exempt from GST for two months. The federal government is also proposing a $250 rebate in 2023 for Canadians earning less than $150,000.
This affordable package will cost a total of $6.3 billion, with the GST holiday costing $1.6 billion and rebates costing the federal government $4.7 billion.
But Dodge argues that these measures will do nothing to improve Canadians’ incomes or productivity going forward.
“We’re borrowing money today to hand out little treats, without making the investments that Canadians need to earn more and improve their standards of living in the future,” he says. “So from an economic standpoint, this is not the right package.”
He added that the federal government’s policies are not meeting the needs of Canadians, explaining, “The real problem is that the average person’s income is not increasing enough to go out and buy groceries.”
The Liberals introduced a bill Wednesday that would enact some of the affordability policies, although they do not include worker benefits.
The NDP said it would not immediately support repealing the GST, saying it wants to change the rebate program to include students, seniors and people with disabilities who have no income. Meanwhile, the Conservative Party has said it will not support either bill, with leader Pierre Poièvre calling it a “temporary tax trick for two months.”
The House of Representatives is scheduled to vote on the GST holiday bill on Thursday, and it is expected to pass with support from the New Democratic Party.
The full CTV Power Play interview with former Bank of Canada Governor David Dodge is available at the top of this article.
