'A little candy today for pain down the road': Former Bank of Canada governor on GST holiday, rebate cheques

Front Bench: Dodge on proposed tax break Former Bank of Canada governor David Dodge speaks on the recently proposed tax break and worker rebate.

Former Bank of Canada governor David Dodge says the Liberal government’s proposed GST holiday, as well as their plan to send $250 cheque to 18.7 million working Canadians, is a “bad package.”

"It's a little candy today for pain down the road,” he told Vassy Kapelos on CTV News Channel's Power Play Wednesday night.

Prime Minister Justin Trudeau announced last week that starting Dec. 14, the GST will be taken off several items — including groceries, restaurant meals and toys — for two months. The federal government has also proposed a $250 rebate for Canadians who earned $150,000 or less in 2023.

This affordability package will cost a total of $6.3 billion, with the GST holiday costing $1.6 billion and the rebate setting the federal government back $4.7 billion.

But Dodge says these measures do nothing to raise the incomes and the productivity of Canadians going forward.

“We’ve been borrowing money to hand out a little bit of goodies today… without making the investments that need to be made so that Canadians can earn more in the future and raise their standards of living,” he says. “So, in economic terms, this is not the right package.”

He adds the federal government’s policies don't fit the needs of Canadians, explaining “the real problem is that our incomes have not risen fast enough for us to be able to, on average, go out and buy the groceries.”

The Liberals tabled legislation to enact part of its affordability package on Wednesday, though it didn’t include the workers benefit.

The NDP said they would only support the GST break right away, as they want the rebate program changed to include students, seniors, and people with disabilities who didn’t earn income. The Conservatives, meanwhile, have said they won’t support either measure, with Leader Pierre Poilievre calling it a “temporary two-month tax trick.”

The House of Commons is set to vote on the GST holiday bill on Thursday, and it is expected to pass with support from the New Democrats.

You can watch CTV Power Play’s full interview with Former Bank of Canada Governor David Dodge at the top of this article.