Heather Scoffield talks the U.S. Federal Reserve on TVO's The Rundown
Heather Scoffield | TVO's The Rundown | February 2, 2026
What happens to Canada’s approach to monetary policy when the world’s most powerful central bank, the U.S. Federal Reserve, is in turbulent times? Heather Scoffield breaks it down here for The Rundown on TVO.
Three things Canadians should know about Carney’s new GST credit
By Heather Scoffield | Originally written for the Toronto Star on January 28, 2026
Prime Minister Mark Carney’s new multibillion-dollar top-up to the GST credit to help low-income Canadians afford food and essentials is definitely progress.
By using the existing system to target the sector of the population that needs the most help in making ends meet, the measure is more efficient and fairer than other tax measures that tend to show upon the menu.
But let’s get a few things clear.
First, a technical clarification. The prime minister has framed the enhanced and rebranded GST credit as a way to alleviate the costly grocery bill many households struggle with continually.
In fact, there is no GST on most groceries except snacks. Recipients can spend their new-found money on whatever they want, as the PM himself noted. But since so many of the recipients find that food gobbles up disproportionately large portions of their income, the new credit can help. It’s not nearly as generous as anti-poverty advocates had hoped, but it’s not nothing. It’s $11.7-billion over six years, reaching 12 million people.
Second, the credit is not going to do anything to drive food prices down. Conservative Leader Pierre Poilievre is right about that. Food prices are high in most developed countries these days, but especially high in Canada — for many reasons, including weather, currency and supply chain glitches.
Rather, there’s a separate collection of new funds for the “root causes” — money to address supply chain disruptions, encourage the construction of new greenhouses, produce food close to home and help the Competition Bureau ensure there’s less bad behaviour.
And third, it’s dripping with politics, as you’d expect in a minority government. While the new benefit can be spent on anything at all, the Conservatives and the NDP alike have hammered the Liberals non-stop on food prices. And so that’s the framing — putting the opposition on the spot.
But it is progress all the same, mainly because it’s a concrete acknowledgment of the bread-and-butter hardships that a growing percentage of the Canadian population is feeling — a policy-oriented recognition that was scarce in the federal budget and what has been hard to hear in Carney’s response to the chaos that is U.S. President Donald Trump.
To be clear, there’s no expectation that Carney be warm and fuzzy. The closest he got to public emoting was the hug he gave to the Bonhomme Carnaval last week in Quebec City. He is a charts-and-graphs fan who writes his own literary references into his speeches.
(Indeed, at his news conference on Monday, he spontaneously used his hands to make a graph to explain that the total cost of the tax rebate measure was the delta between the change in overall inflation and the change in food inflation since the end of the pandemic.)
But the charts and graphs from pollsters have continually shown that Canadians are just as concerned about job security, economic stability and making ends meet as they are about Trump.
They’re related, of course. But Carney has not really connected the dots very well until now. His focus has been institutional investors, big business, and foreign leaders.
“The world is knocking at our door, and momentum is building. But as the Minister of Finance just said, the biggest payoffs will take time,” Carney said on Monday with Finance Minister Francois-Philippe Champagne at his side. “And many Canadians are feeling the pressures right now of everyday expenses. Canadians need a boost today and a bridge to tomorrow.”
Central in the Carney government’s first budget in November was a plan to use federal tools and its balance sheet to drive $1 trillion in capital investment in Canadian infrastructure over the course of five years.
He has been aggressive on committing to defence spending, and aggressive on diversifying Canadian trade away from the United States.
And as we all know, he has won praise around the world for vowing to build networks of middle powers — a “third way” to navigate through the antagonism that the United States and China bring to international relations.
With the enhanced GST credit, now branded the Canada Groceries and Essentials Benefit, the Carney government signals it knows it can’t get from here to there without ensuring Canadians at all levels of wealth and income are in solid shape.
“The world is knocking at our door, and momentum is building. But as the Minister of Finance just said, the biggest payoffs will take time,” Carney said on Monday with Finance Minister Francois-Philippe Champagne at his side. “And many Canadians are feeling the pressures right now of everyday expenses. Canadians need a boost today and a bridge to tomorrow.”
Yes, they do. Statistics Canada reports that poverty has been creeping up, the ability to make ends meet has declined and wealth inequality was on the rise last year. Those are not the ingredients Canada needs to attract growth and investment, let alone maintain a decent quality of life.
To lock in the benefits of the new measures, Canadians and government both need to build on the progressive measure taken this week.
Canadians need to make sure they file their taxes — even if they haven’t done so in the past, and even if they aren’t paying any tax on a regular basis. This will ensure they’re in the system to receive the federal payouts.
And governments need to figure out the next step in taking on poverty, inequality and paycheques that don’t cover the bills.
As Carney well knows, the tax equivalent of a warm, fuzzy hug with Bonhomme only goes so far.
Overview of the Quebec tax system – 2026 edition
A report led by Tommy Gagne-Dube and Suzie St-Cerny for the Research Chair in Taxation and Public Finance, the University of Sherbrooke
This year’s edition offers a detailed and current overview of Quebec’s tax system presented through more than 100 charts, tables and sidebars. The report covers topics such as the tax burden, its structure, tax expenditures, the progressivity of the tax system and its impact on income inequality. The report reveals that Quebec is still the province with the highest tax burden in Canada and ranks 11th out of 32 advanced OECD economies as a proportion of GDP. The report also highlights the province’s dependence on income tax, the significant progressivity embedded in the province’s tax system, and the substantive role of taxation in reducing inequality. The full report and a document outlining 10 key findings are available in French here:
By Tommy Gagné-Dubé and Suzie St-Cerny | Research Chair in Taxation and Public Finance, the University of Sherbrooke
Cette édition du Bilan propose un portrait détaillé et actualisé de la fiscalité québécoise à partir de plus de 100 graphiques, tableaux et encadrés, couvrant notamment le poids de la fiscalité, sa structure, les dépenses fiscales, la progressivité du régime et ses effets sur les inégalités de revenus. Elle montre entre autres que le Québec demeure la province où le poids de la fiscalité est le plus élevé au Canada, tout en se situant au 11e rang sur 32 économies avancées de l’OCDE en proportion du PIB. L’analyse met également en évidence une forte utilisation des impôts sur le revenu, une progressivité marquée du régime fiscal et un rôle significatif de la fiscalité dans la réduction des inégalités. Le Bilan complet ainsi que le document des 10 faits saillants sont disponibles ici:
Tax havens cost Canada some $15 billion a year in revenue. Is Ottawa’s crackdown working?
By Heather Scoffield | Originally written for the Toronto Star
Canadian parliamentarians are taking a crack at squeezing out more government revenue from tax havens, and we wish them all the luck and stamina.
Tucked away from the Conservative-to-Liberal floor-crossings and the nail-biting confidence-vote drama that have dominated this Parliament, MPs on the House of Commons finance committee were contemplating all the places where corporations put their profits.
What initially started as an Opposition “gotcha” strategy meant to tie Prime Minister Mark Carney to the tax practices of Brookfield Asset Management has turned into a fairly serious exercise to tackle one of the thorniest issues in fiscal policy.
Political soap opera this ain’t, but the implications are in the billions of dollars every single year — and Canada is missing out.
That’s anything but new, and Canada is far from alone. Tax avoidance and its more nefarious cousin, tax evasion, have bedevilled policymakers for time immemorial.
Over the years, Canada has thickened its tax code, added auditing resources and investigative powers to the Canada Revenue Agency and law enforcement, joined complex international agreements and is always adopting more advanced technology in the hopes of gaining the upper hand.
But companies and wealthy individuals often seem to be a step ahead, especially those that are well-resourced enough to navigate increasingly complex rules and murky financial transactions.
Taxing corporations and high net-worth families fairly is more important than ever. Canada needs the economic activity, governments need the tax revenue, and Canadians need to know that the tax system that they pay into — year in, year out — is equitable.
Taxing corporations and high net-worth families fairly is more important than ever. Canada needs the economic activity, governments need the tax revenue, and Canadians need to know that the tax system that they pay into — year in, year out — is equitable.
“There’s a constant balancing act between competitiveness — we want our businesses and our multinationals to succeed when they’re competing in foreign markets — and a desire to not facilitate inappropriate tax avoidance and erode the Canadian tax base,” Trevor McGowan, associate assistant deputy minister at the Department of Finance, told the committee.
Canada, like many other countries, is thirstier than ever for business investment, especially now that the global economy is in an uproar and the United States is no longer a dependable source of mutual benefit. And with trust in public institutions in a fragile state, the federal government can’t afford to be lenient.
Parliamentarians find it hard to determine the scope of the problem. CRA has measured the “tax gap” — the difference between what corporations should be paying and what they actually pay — in the past and says that in 2018 it amounted to between $1 billion and $3 billion a year, lower than previous years.
But CRA’s efforts focus on tax evasion (actually breaking the law) rather than tax avoidance, which is just playing footsie with the rules. And they admit up front that their estimate is uncertain.
Independent analysts who try anyway to measure the cost of tax avoidance come up with far higher numbers. Canadians for Tax Fairness figures Canada misses out on $15 billion a year because of tax haven abuse.
But as the prime minister himself said when he was faced with tough questions about Brookfield during the election campaign last spring, setting up corporate shop in a low-tax jurisdiction is legal and a legitimate business strategy.
Even trickier than counting up the missing tax revenue is figuring out what to do about it.
Canada has tax treaties and agreements with a growing number of key low-tax or no-tax jurisdictions — agreements backed up by domestic law that actually allows for Canadian firms to repatriate some types of income back to Canada without paying tax.
In the past few years, the federal government has tightened the screws.
- Like many other developed countries, Canada now imposes a global minimum tax of 15 per cent, mainly touching large companies with foreign subsidiaries. The Department of Finance sees collecting an extra $2.1 billion a year this way.
- Ottawa has now curtailed the deduction of excessive interest and expenses, expecting to raise between $1.6 billion and $1.8 billion a year.
- The government has significantly boosted CRA’s budget for audits and has also updated its anti-avoidance rules that apply to corporations.
- In the last budget, the federal government bolstered its authority over transfer pricing that companies use to account for in-house international trade.
Officials believe their measures are chipping away successfully at the tax avoidance problem, delivering results.
Critics and parliamentarians of all stripes want more though — with good reason. But there are no magic solutions.
The approach of the past has often been to add more rules and complexities, but there’s a chance that amounts to a road map for dodgy activity. The same issues apply to multilateral agreements and tax treaties.
If the entities you’re trying to stymie specialize in hiding behind complexity, adding even more complexity may make things worse. Simpler rules, on the other hand, could help.
The other main approach is transparency. Europe and Australia are legislating public country-by-country reporting (PCBCR), which requires multinational corporations to make public key financial data in every country they operate.
Canada has some requirements along these lines but the information is not public.
The hope is that transparency will dampen tax avoidance.
“PCBCR really is sunlight as the best disinfectant. It would allow academics and researchers outside of the tax authorities to engage in the kind of research that we need to deal with this whack-a-mole problem,” D.T. Cochrane, senior economist at the Canadian Labour Congress, told the committee.
“There will always be incentive to create these schemes. We need more methods of confronting them.”
A balancing act indeed.
Show Me the Money: Tax, Infrastructure and Who Pays?
Taxes shape more than government revenue. They shape trust. In this episode of “Canada’s Economy, Explained”, host Marwa Abdou sits down with the Canadian Tax Observatory’s Heather Scoffield to unpack the federal budget and explore how Canada’s tax and fiscal systems influence the country’s ability to build, grow and compete.
With Marwa Abdou & Heather Scoffield | Canada’s Economy, Explained Podcast
Mistrust of the CRA leaves low-income Canadians missing out on benefits
By Heather Scoffield | The Toronto Star
PM Mark Carney says he wants to issue pre-filled tax forms for those in “simple” tax situations.
But “simple” is in the eye of the beholder. In financial terms, “simple” can mean you probably don’t have intricate investments. You likely don’t owe the government money. Nor do you draw your income from multiple sources.
In socio-economic terms, however, life for low-income taxpayers who are reluctant to fill out forms for the Canada Revenue Agency is anything but simple. And if the CRA wants its new proposals to work, it will need to address that complexity head-on.
Thank you for the input – Prosper Canada, Elizabeth Mulholland, Lisa Rae, Kaite Burkholder Harris, Alliance to End Homelessness Ottawa, Rebekah Smylie, West Neighbourhood House.
In socio-economic terms, life for low-income taxpayers who are reluctant to fill out forms for the Canada Revenue Agency is anything but simple. And if the CRA wants its new proposals to work, it will need to address that complexity head-on.
