Finance Minister Says Bringing Down Food Cost Is ‘Work in Progress,’ Urges MP to Pass GST Credit Boost

Finance Minister François-Philippe Champagne defended his government’s record in matters of food inflation as he testified before a House of Commons committee, while encouraging Conservative MPs to support the government’s proposed 25 percent increase to the GST credit.

Champagne appeared at the House finance committee on Feb. 3 to answer questions about his recently tabled Bill C-19, also known as the Canada Groceries and Essentials Benefit Act. The bill would amend the Income Tax Act to increase the maximum annual GST credit amounts by 50 percent for the 2025-2026 year, and by 25 percent for the following five years, with around 12 million Canadians being eligible for the credit.

Champagne told MPs on the committee on Feb. 3 that food inflation “remains stubbornly high” and has been exacerbated by “structural issues,” which he cited as the country needing to import most of its produce during the winter, differences between the value of the Canadian and U.S. dollars, tariffs, supply chain disruptions, and climate change.

Conservative MP and Deputy Leader Melissa Lantsman said food prices had risen by 7.8 percent since Champagne announced in 2023 as industry minister that the heads of Canada’s five largest grocery chains had “agreed to work with” Ottawa to stabilize food prices.

“You said that you would stabilize prices. You said that you would lower prices,” Lantsman said, noting that the price of peppers had gone up by 41 percent since then, coffee had gone up by 33 percent, and beef had gone up by 27 percent.

“I’d say it’s work in progress,” Champagne said, adding that food inflation is “challenging everywhere,” but that Bill C-19 would include measures to encourage more food production within Canada. The legislation would allow producers to fully write off greenhouses acquired after Nov. 4, 2025, and that are available for use before 2030.

Conservatives have blamed government policies such as high taxes for elevated food inflation, but have said they will support Bill C-19 and have moved to help expedite its review process. On Feb. 2, a Conservative motion pushing for quick approval of the Liberal government’s plan to increase benefits under the GST credit passed unanimously in the House of Commons, leading to Champagne’s appearance the next day at the committee hearing.

The measure being legislated through C-19 had first been announced by Prime Minister Mark Carney on Jan. 26, as part of a suite of initiatives meant to help with affordability. Back in 2024, the government under Prime Minister Justin Trudeau also introduced a similar policy that doubled the GST credit for six months in a bid to help with affordability.

Champagne told the committee that the government’s proposed GST credit increase would provide Canadians with “immediate support” to offset the cost of rising food prices, and that a payment of up to $1,890 this year for a family of four would make a “tangible difference.”

Costs, Deficits

Conservative MP Jasraj Singh Hallan raised the Parliamentary Budget Officer’s recent report estimating that the increased GST credit would cost $12.4 billion over six years, and asked if the Liberal government would find the money to “cover the cost” of the program by raising taxes, adding to the debt, or cutting expenses.

“I would say there’s another ways [sic] to grow the economy. That’s exactly what we’re doing. That’s why you saw in Budget 2025 that we have generational investments to grow our economy,” Champagne responded, later adding that the government estimated the GST credit boost would cost $11.3 billion.

Conservative MP Pat Kelly said the Tories would “always support tax relief for Canadians,” but they were concerned with the cost of the GST credit increase, particularly since Budget 2025 projected a $78.3 billion deficit for the current fiscal year.

When Kelly asked Champagne how the credit increase would impact the deficit projections, the finance minister said the measure was needed to support Canadians and increase resilience in food supply chains. After repeated questioning on the deficit, Champagne said that “every measure that we take is taken into account in the budget, and there will be other measures” to support Canadians.

Conservative MP Sandra Cobena also asked Champagne how the government would pay for the GST increase, and the finance minister then questioned whether Conservatives would continue to support Bill C-19. “What will you say to your constituents? You say you voted in favour, but you’re not willing to support Canadians, so I think people will be confused,” Champagne said.

“You are running a deficit. How much will the deficit be then?” Cobena asked.

“You’re voting in favour of it, and I think you should stand by your vote and say, ‘Yes, we favour that, because it’s going to support Canadians at the time of need,’” Champagne said.

Competition and Foreign Grocers

Bloc Québécois MP Jean-Denis Garon asked Champagne why the Liberal government would not send GST cheques out on a monthly basis instead of every quarter, given that Canadians tend to buy groceries weekly. Champagne responded that monthly cheques would include an added administrative cost, and the GST credit was “always quarterly.”

Garon also asked Champagne about his proposal back in 2023 as industry minister to encourage foreign grocery chains to come to Canada in order to increase competition. The Competition Bureau had released a report that year, which found a foreign grocer coming to Canada would put pressure on existing grocery stores to reduce their prices.

When Garon asked if any foreign grocery chains had settled in Canada, Champagne said clauses within the Competition Act prevented foreign players from coming to Canada, and the Liberal government removed them.

In 2024, the government amended the Act to give the Competition Bureau more power to take action against collaborations that stifle competition and consumer choice, including against restrictive commercial agreements in the grocery sector.