Bill C-2 (Historical)

An Act to amend the Income Tax Act

This enactment amends the Income Tax Act to reduce the second personal income tax rate from 22% to 20.‍5% and to introduce a new personal marginal tax rate of 33% for taxable income in excess of $200,000. It also amends other provisions of that Act to reflect the new 33% rate. In addition, it amends that Act to reduce the annual contribution limit for tax-free savings accounts from $10,000 to its previous level with indexation ($5,500 for 2016) starting January 1, 2016.

Income Tax Act

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, the member from the government caucus talks about all that the Liberals are doing. I do not think so. We are still waiting over here. There has been a whole lot of talk in a chamber filled with thunderous noise and all kinds of assertions, but I have not seen anything tangible.

The reality is that when we look at Bill C-2, we see very clearly that it is rewarding those who have the highest incomes. Those who earn $45,000 or less are not benefiting. How on earth is this construed anywhere as a positive step in helping Canadians?

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, when I look at Bill C-2, it is just one of the many things being done to address some of the existing income inequalities that the previous Conservative government somewhat exacerbated.

An important component is that nine million-plus Canadians would benefit directly. Tens of thousands of workers from every region of our country would get tax money going back in their pockets. I see that as a positive thing.

When we take into consideration issues such as our senior pension programs, for which there will be substantial increases, from what I understand, coming in the March 22 budget that I know Canadians are waiting to hear, there is a movement in the other direction, a direction that empowers Canadians and Canada's middle class, which would be healthier for our economy. Would the member not agree?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I appreciate the opportunity to speak on this important bill. Tax fairness has been an NDP concern for decades. Unfortunately, I am not at all convinced that Bill C-2,, an act to amend the Income Tax Act, provides the fairness that Canadians have done without for quite some time.

I will begin by quoting from the Liberal Party's election campaign platform. The Liberals told us that they would give middle-class Canadians a tax break by making taxes more fair: “When middle class Canadians have more money in their pockets to save, invest, and grow the economy, we all benefit.”

However, there is a problem here. The Liberal definition of middle class seems to be a moving target. Worse, that vagary seems to be intentional. It wins votes, but at the same time it absolves them of accountability. It leaves us with many questions.

Which Canadian workers fall into the category of middle class? Let us look at the numbers. MoneySense estimates for 2013, based on Statistics Canada data, are that an individual Canadian earning an income between $23,000 and $37,000 annually makes more than the poorest 40% of Canadians and less than the richest 40%. It is reasonable, then, to assume that if one sits in a wage range where the number of Canadians making more and less is equal, one falls in the middle, a middle which at the top end, using this definition, is just under $37,000. In fact, the Liberal tax proposal excludes anyone making less than $45,000. In other words, this tax reform excludes the lowest 60% of wage earners. However, as I pointed out, the Liberal definition of middle class is a little vague.

Let us give the Liberals the benefit of the doubt and look at Canadians with an annual income falling between $48,000 and $62,000 per year. The tax benefit now kicks in at a whopping $50.

As an aside, and because the bill also proposes a rollback in the TFSA limit, it may be sad and somewhat surprising to learn that the claims of the previous minister of employment, the member for Carleton, turned out to be inaccurate when he said that 60% of individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000 in 2013. Were they middle class? Also, for those income earners, the additional $50 tax benefit, or 96¢ a week, does not amount to much. With that increase to one's take-home pay, they would have to wait two weeks just to buy themselves a double-double.

It seems to me that except for the fact that the Conservative Party leader seems to have had a change of heart and is now aligning herself with the 99%, the old Liberal-Tories same old story adage holds true here again today. Under the current Prime Minister's plan, the highest 30% of Canadian income earners are the main beneficiaries of this legislation while the wealthiest 10% pocket most of the money. One would think that an income tax deduction designed for the middle class should actually benefit a larger proportion of Canadians.

A federal tax system is put into place in order to create and maintain an equal and just society, to provide essential services for Canadians, and to ensure that not one of us is left behind. It is the vehicle of a strong social democracy. I would like to suggest that the plan should be sustainable. New Democrats know that is possible. How can the Liberals justify this change when it will result in a total revenue loss of $8.9 billion between now and 2021?

We have an opportunity to effect real change for the people who need it most, and, in doing that, everyone benefits. Unfortunately, the tax change proposed by the Liberals does not even come close.

Why not aim higher? Why not make changes that would ensure that no Canadian lives in poverty?

New Democrats know that we do not have to get bogged down in the definition of who is middle class to see that Canadians are being left behind as a result of Conservative and Liberal government inaction. The gutting of our manufacturing sector and the loss of well-paying jobs and stable work has affected the economy and the lives of people in London, Ontario and all of Canada for decades. New Democrats understand this reality and know that we can do better. The fact that we have Canadians living in poverty is shameful. The income gap is growing and it becomes increasingly difficult for families to find accessible, affordable housing, and child care, health care, and education.

In their effective opposition, the New Democrats have proposed a number of realistic measures to help families struggling to make ends meet: a national child benefit supplement; guaranteed income supplement; $15-a-day child care for all Canadian families; and reinstatement of the labour-sponsored tax fund credit, to name just a few. The NDP understands the reality of the middle- and lower-income earners of this country.

If the country were to reduce the tax rate for Canadians earning less than $45,000 a year by just 1%, from 15% to 14%, 83% of those people, some nine million Canadians, would benefit. The cost difference would be minimal and could be easily recovered with a very slight increase of one half percentage point to the corporate tax rate. The New Democrats' proposal makes sense in and cents terms. Our proposal would also enable the government to increase the working income tax benefit, which has proven to be very effective for low-income workers, and put more money back into local economies.

As tomorrow is International Women's Day, let us talk a bit about equity.

We know that creating equity for workers with the lowest incomes benefits women. Federal tax policy is structured such that the ratio of profit between women and men is 60-40, more or less. It favours those with higher incomes, and since men by and large earn higher incomes than women, they are advantaged and women are disadvantaged under the current taxation regimes. This disadvantage follows them from the time they enter the workforce to retirement, as women on average fall more often into the category of low-wage earners and since those benefits are often calculated based upon annual income, which is more likely to be part time, precarious, or interrupted in order for women to raise children.

As members can see, tax cuts to the lowest tier of Canadian income earners, such as those proposed by the NDP, would not only benefit those workers and the communities but would also represent a small and vital step toward gender equality.

The NDP has always worked for seniors. I am very proud to say that we are the only party that has a national strategy on aging, and I am thankful to my staffer, Tara Hogeterp, who worked diligently in the last Parliament, with the aid of our NDP research staff team, to bring that strategy to the public.

We do not believe that an increased TFSA limit is the solution for lifting nearly 200,000 seniors out of poverty, so we support the government's proposal to amend it. We fought against the Conservatives' reckless decision to raise the retirement age from 65 to 67. We proposed to increase funding for the guaranteed income supplement by more than $400 million.

It seems to me that the government is missing an important opportunity here to create fair and equal taxation systems that would benefit all Canadians, missing an opportunity to fulfill one of its election promises. It makes me wonder whether it ever had any intention of doing so in the first place.

Instead of making smoke-and-mirror changes to tax policy that would not benefit anyone but copywriters, why not create a system that would actually serve the Canadian population and work toward real sustainable fairness and equity?

In doing so, the government would be able to say that election promises do matter. That would be a remarkable and refreshing change.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I thank my young hon. member for that question.

Indeed, the Liberal government is heading to create more deficits, and I worry about the younger generation. That is why we wanted our students to be able to save for education, our families to save to start a family, entrepreneurs to save for their businesses, parents to save for their children, and low-income seniors, who are close to my heart, save for retirement.

If Bill C-2 passes without change, these changes will make life less affordable for Canadians who are trying to save for vulnerable years. Therefore, we will vote against Bill C-2 in its current form.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, there are two provisions to Bill C-2. One is the reduction in the annual limit one can deposit into a tax-free savings account, and the other is a reduction in the second income tax bracket while increasing the top tax bracket. I will begin my discussion with the tax-free savings account.

The TFSA was introduced in the 2008 federal budget, back when the late Jim Flaherty was the minister of finance. Canadian families were able to invest their after-tax dollars and earn income tax-free through their TFSAs. TFSAs can be used to invest in all sorts of eligible financial products, whether they are GICs, mutual funds, or stocks and bonds, to name a few. Canadians were already taxed once on their income. The TFSA allows them to earn income on their savings without having to be taxed again. Unlike RRSPs, the TFSA alleviates the risk that governments will change the tax rates, as withdrawals from the TFSA are not taxed.

It is not surprising, especially with the Liberals set to increase taxes in the upcoming budget, that Canadians at all income levels are choosing to invest in TFSAs. The Liberals would like nothing more than to get their hands on the savings of Canadians. Simply put, the country benefits from Canadians saving their hard-earned money, and the TFSA allows them to do so. We should be encouraging saving and not discouraging it, as Bill C-2 will do.

The previous Conservative government was able to increase the TFSA contribution limit because our last full fiscal year in government was in surplus. The Auditor General confirmed this. Indeed, the Minister of Finance's own department, in the monthly “Fiscal Monitor” publication, showed that in the first nine months of the current fiscal year ending in December, Canada's budgetary surplus was $3 billion. Now the Liberals are choosing to squander this surplus and plunge us into massive deficits, including with Bill C-2.

I will now bring my attention to the second part of Bill C-2, which is the proposed adjustment of the income tax brackets. Since I was elected to the House of Commons in October 2008, the rates for the federal tax brackets have not changed. There is a 15% bracket, a 22% bracket, a 26% bracket, and the top bracket of 29%. With this stability, Canadians can reliably predict how much income tax they would be paying.

The new Liberal introduction of a higher tax bracket would create a situation where top-paid and top-performing professionals in Canada will be discouraged from working further and encouraged to look into ways of legally reducing their taxable income levels. In particular, I would like to point out that when we add together the combined federal and provincial marginal tax rates, Canadians who live in over half of our provinces will be paying a top combined tax rate of over 50%. These provinces include Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, and Prince Edward Island. This means that people in the top tax bracket will be paying the government more than half of their income for each extra dollar they make.

Does anyone in the House believe that these individuals will be seeking to earn more money when they will be paying more than half of their income in the form of income taxes? We should be encouraging Canadians to work hard and earn more money. This income tax change will have the opposite effect for those highly paid professionals who qualify for the top income tax bracket. There will be a point when people will choose to work less because the money they earn will simply be given to the government. Indeed, I foresee the only growth in high-paying jobs resulting from Bill C-2 will be of tax accountants, who will be finding ways to reduce the income tax burden on highly paid professionals. That was maybe the Liberal plan after all.

Speaking of Liberal plans, the other fact that the Liberals promised in their election platform is that the reduction of the second tax bracket will be paid for by the increase in taxes in the top tax bracket. Subsequent projections from the Department of Finance have indicated that Bill C-2 will not be revenue neutral but will put us further into deficit.

Indeed, our previous government's election commitments, including an increase to the TFSA annual contribution rate, were contingent on balancing the budget. Not only have the Liberals squandered the surplus, but they are implementing changes that were clearly from incorrect premises.

In summary, Bill C-2 is wrong for Canadians. I will be voting against it in its current form.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, it is an honour to rise in the House to join the debate on Bill C-2. I would like to spend some of my time speaking on why definitions of the middle class are so important.

In the last election the Liberals campaigned on a promise to reduce taxes for the middle class and support those working hard to enter the middle class. Canadians took them at their word. Like most Canadians, I agree with my NDP caucus that additional benefits should be targeted at the middle class and those who need them the most.

The problem with this legislation is that the Liberal definition of “middle class” seems to have been created by the Donald Trumps of the world. Surely only the very rich would devise a bill that would give most of the tax benefits to those making around $200,000 a year while offering Canadians who make $40,000 a year nothing at all and still call it a tax cut for the middle class. Definitions matter for the middle class.

The bill in its current form would not help Canadians who are working harder than ever, yet falling further behind. The Liberals promised to join the campaign to fight against growing inequalities, which was a big part of why they were elected, but in this legislation they are doing the exact opposite. Canadians do not like to be misled, and the Liberals will have to answer for that. Canadians also do not like empty rhetoric and grandstanding.

Let us see what needs to be done to fix this bill. We were all sent here to work together to deliver positive results for all Canadians, and I believe it is not too late.

The government needs to present its definition of who is included in its understanding of the middle class. There are different ways to define the middle class, but regardless of the definition, those definitions should always at least cover one, if not both, of the following characteristics. First, we could look at the income of all Canadians and see where most people land. This is also considered to be the median income in a country. Second, the population could be divided into groups of equivalent size, such as five blocks each comprising 20% of the population, and targeting the groups in the middle as the middle class.

Let us see if the current definition of “middle class” in the bill meets these requirements.

First, the median income in Canada is $31,000. Under the Liberal plan, any Canadian making the median income, or near it, would receive zero benefit. Second, if we divide the population into equal blocks of 20%, the bill would not benefit the lowest 20%, nor would it benefit the second tier of Canadians. For those in the third or middle block, the bill would still provide no benefit at all. Furthermore, the benefits would only kick in halfway through the fourth block, and they would begin very small. The vast majority of the benefit would go to the highest-income earners in Canada alone.

I will look at my riding of Courtenay—Alberni. In the fifties and the sixties, Alberni Valley was a booming community. It had the highest median income in the country and was sending lots of money to Ottawa. Most recently, it was rejected for a Building Canada grant for scheduled air service at its airport. It was rejected because it did not have scheduled air service.

The people in Alberni Valley feel as though they are being betrayed by Ottawa. The median income is $25,000 a year, and one in three children is living in poverty. Alberni Valley wants to move forward, but it needs help. The Liberal government promised that it was going to help the middle class.

I will talk about another demographic in my riding, the Nuu-chah-nulth people. The median income of the Nuu-chah-nulth people is $17,000 a year. The Liberal government made a lot of promises about a new relationship with aboriginal people, but this legislation does not include aboriginal people across Canada. They feel forgotten.

Seniors feel forgotten. Inequality is at an all-time high, and this legislation does not address it.

The Nuu-chah-nulth people use a word in their language, uu-a-thluk, which means “taking care of”. They use this word in reference to their fishery. They have been in a court case for over 10 years defending their right to catch and sell fish. They feel again that Ottawa has betrayed them with respect to recognizing their aboriginal rights and title. They want to take care of the resource. They want to work with Canadians so we can take care of each other. This legislation forgets to take care of the people in my riding.

Folks in my riding will do anything to support maintaining the tax-free savings account system, but they want a return to the annual cap of $5,500. This would allow my constituents the ability to put more savings away, but it would not open the door that would, in effect, give the richest Canadians a tax break. We know this because 93% of Canadians with tax-free savings accounts were not able to contribute the full amount, so the expanded limit would allow only the wealthiest Canadians—and we have seen this before—to utilize the full amount of the savings account.

To return to the income tax changes, people in my riding in the Alberni Valley, the Comox valley, and Oceanside, and aboriginal people across this country, are feeling left out. Who will see the biggest benefits from the definition of “middle class”? As I said, clearly it is not the majority of people in my riding, but those who make as much as members of Parliament here. Those who make over $160,000 a year would see their taxes lowered by almost $700, while nearly 60% of Canadians would get nothing at all. This is not fair, and the NDP opposes those measures.

How do we fix this? Instead of targeting the second bracket, as the Liberals have done, the NDP has proposed lowering the first tax bracket.

How would this help? The tax brackets are in layers, and Canadians who earn enough to enter the second and third tax brackets are still taxed on the first layer. Therefore, to focus the benefit on the middle class, one must get a tax break on the first layer rather than the second, which skews the benefits disproportionately to the top earners. The NDP plan would reduce the first tax bracket from 15% to 14%. This would give the largest benefit to those making $45,000, rather than those making $200,000, who would benefit under the Liberal plan. Because the NDP plan actually focuses on the middle class, 83% of taxpayers would benefit from our proposed idea.

It may seem strange to some folks watching at home, but the way we can fix this bill is to implement this reasonable amendment from the NDP to get the bill to committee. New Democrats want to fix this bill so that the substance matches the title. This way, a bill that is supposedly intended to help middle-class families would actually deliver on that promise, instead of giving MPs a $680 tax break that they do not need.

I was elected to hold the government to account and to work with it, wherever possible, to bring much-needed relief to those struggling in my riding. As the Nuu-chah-nulth people say, “Let's use uu-a-thluk. Let's take care of each other.”

I hope members will consider that in this bill and in making this amendment.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I want to thank my seasoned colleague from Bellechasse—Les Etchemins—Lévis for sharing his time with me.

What we have before us today is the debate on Bill C-2, which, to some extent, implements the financial commitments made by the Liberal Party, which now forms the Canadian government.

To put it mildly, the reality presented by the Liberal Party during the election campaign is a far cry from the reality facing Canadians today. In fact, the two could not be more opposite. We are talking about black and white, night and day.

I would remind the House that during the election campaign, the current Prime Minister boasted that the Liberals were going to make changes to the tax system that would benefit the middle class, that the wealthy would finally pay their fair share, and that it would all be revenue neutral. That was a serious mistake. First of all, let us be honest: these Robin Hood stories never work. Should we be surprised to see such a political approach from this Prime Minister? Is this not the same person who said on February 11, 2014, that “the budget will balance itself”?

When someone who believes that the budget will magically balance itself finds himself in government, reality hits hard. The Liberals' promise that the tax changes would be revenue neutral were nothing but a pipe dream.

The parliamentary budget officer recently announced that the Liberals' promise would result in a $1.7-billion deficit. That is far from a balanced budget, far from revenue neutral, and far from the Prime Minister's pipe dream that the budget would balance itself.

The tax changes for the so-called middle class come at a cost. The bill is being sent to our grandchildren and great-grandchildren who are not yet born, but who will be paying for this government's lack of political judgment, as seen in Bill C-2.

Speaking of the middle class, my colleagues, the New Democrat member for Saint-Hyacinthe—Bagot and the member for Bellechasse—Les Etchemins—Lévis, told us how the interpretation of middle class is rather broad, to say the least, especially when someone who earns more than $180,000 is supposed to be part of the middle class. The scope is quite large.

This brings us to the structural deficits run by the Liberal Party. Let us remember that, during the election campaign, the Prime Minister said over and over again that there would be very small deficits for the first two years. In the third year, the deficit would be even smaller, and then, bam! In the fourth year, the budget would be balanced again. That was what the Liberals were saying during the election campaign. Unfortunately, reality has now caught up to the Liberal Party. What did the Minister of Finance say just two weeks ago? He had to confess that Canada was headed for an $18-billion deficit.

Prestigious banking institutions all across Canada have concluded that, in the next four years, we are headed for deficits of $100 billion, $130 billion, and $150 billion. That is a far cry from the very small actuarial deficits that were going to be eliminated during the third year. Is this not the same Prime Minister, who during the election campaign, said that the budget would be balanced by the fourth year? Today, he can no longer say that. In an editorial board meeting with La Presse, he indicated that he could not confirm that the budget would be balanced.

Let us not forget the government's election platform. Unfortunately, the Standing Orders do not permit me to show it, but I have it here with me. The party leader was not present when the platform was released. I have been actively involved in politics for seven years. I was a journalist for 20 years and, honestly, this is the first time I have seen a serious national political party present its economic platform without the party leader being present. Some might say that perhaps it was better that way, because he believes that budgets and deficits balance themselves. However, the minister from Quebec City, my neighbour, was there and I commend him for that.

What did the Liberal government's economic plan say? On page 3, it says, “We will be honest about the government of Canada’s fiscal position”.

Really? In fact, that is not untrue. Last week, they acknowledged that we are headed to an $18.7-billion hole. In terms of being honest, that is a start.

Further on it says, “We will run modest deficits for three years.” That did not happen.

On page 4, it says, “A new Liberal government will release a fall Economic and Fiscal Update.” That is true. We got that update.

In the April to November 2015 Fiscal Monitor published by the Department of Finance, we see that there was a $1-billion budgetary surplus. It is true that in this regard, they kept their promise. They released a report, a positive one when it comes to what they inherited from the Conservative government.

Nonetheless, the sad thing in all of this is to read in black and white on page 7, “With the Liberal plan, the federal government will have a modest short-term deficit of less than $10 billion in each of the next two fiscal years...After the next two fiscal years, the deficit will decline and our investment plan will return Canada to a balanced budget in 2019/20.”

It is a pipe dream. These promises are not worth the paper they are printed on. That is the reality of the current Liberal government.

What really gets us is that the government is in the process of literally killing the rich legacy left by the government led by the right hon. member for Calgary Heritage. We left the house in order.

I want to remind members of the facts. We took power in 2006 and remained in power until 2014. In 2008, the entire world was hit by the global economic crisis, the worst crisis since the great recession of the 1930s. No one denies that. What did our government do? It took the bull by the horns. It made bold, brave decisions, with the result that in 2014, our record was very good. We had the best debt-to-GDP ratio. That is important, because if debt is under control, it does not cause problems, especially when the ratio is good and our GDP is higher than our debt. That is the legacy of the Conservative government. The best debt-to-GDP ratio in the G7: that is our legacy. The best job creation record in the G7 during the crisis: that is our legacy. The fastest economic recovery in the G7: that is our legacy.

We believe in infrastructure programs. As all sides of the House have noted, we are glad to see the hon. member for Lac-Saint-Jean back in fine form today. I applaud my colleagues for welcoming him back in a civil and honourable fashion. On his watch, our government introduced the boldest infrastructure plan ever. Our top priority was always to reduce taxes and let people keep more money in their pockets. Our government passed over 140 measures in 10 years. Let me remind everyone that the grandest and most effective of them was reducing the GST from 7% to 6% and from 6% to 5%. We promised, and we delivered. They promised revenue-neutral tax cuts, but they are not delivering. That is why we strongly condemn this government and will not vote in favour of Bill C-2.

Saving money is another issue that is close to our hearts. That is why our government created the TFSA, which this government is trying to water down, unfortunately. That is the wrong approach, and we hope the government will see the light on this.

This government's policies are unrealistic and irresponsible. The government is putting Canada on the road to disaster. It is scuttling the Conservative government's legacy. The Liberal Party has at times left an onerous legacy and at other times left a rich legacy. It is a political party that has vigorously tackled deficits. As the MP for the riding of Louis-Saint-Laurent, I would like to point out that the Right Honourable Louis Saint-Laurent was the prime minister who eliminated the debt after the war. The Right Honourable Paul Martin also steadfastly addressed deficits not so long ago. He made very contentious decisions including the decision to drastically reduce health transfers to the provinces. However he at least wanted to leave a strong economy and, above all, healthy public finances. That is not what the current government is doing.

It is never too late to do the right thing. Bill C-2 could be amended to give Canadians a better economy and, above all, to ensure that their government is realistic and responsible.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I thank my colleague for his question and excellent work.

He has given me an opportunity to recall that tax-free savings accounts are benefiting people who earn $60,000 or less, those who are not targeted by this measure. Sixty per cent of those people are putting money aside for retirement. This tool is provided for those who have less capacity to save money, so they can better enjoy their senior years.

In a nutshell, Bill C-2 would prevent them from saving money. It is not the way to move forward to ensure that working people today can save money and not pay more taxes.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, my riding of Sarnia—Lambton has a lot of seniors in it. The average age is 54 in fact. As I was going door to door in my campaign, I saw a lot of them, especially those on a fixed income who are really struggling to make ends meet.

I wonder if the member could comment on how he thinks Bill C-2 would impact seniors.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I will be sharing my time with the member for Louis-Saint-Laurent. This is actually the first chance I have had to share my time with him.

The latest election returned a lot of new members from the Quebec City region. We are very proud to have them here in the House of Commons to participate in this important work. I am particularly proud to have my colleague from Louis-Saint-Laurent here with us. He is a passionate and talented MP whom the esteemed journalist, Jacques Samson, even compared to Peter Stastny.

We like having high scorers on our team. These days, we really need good net minders because the Liberal government seems keen on racking up deficits like hat tricks. Unfortunately, taxpayers end up paying the price, particularly those who need help the most.

That is why I am rising in the House today. I want to make it clear that, on behalf of the people of Bellechasse—Les Etchemins—Lévis, I will oppose this bill. In theory, the Liberals seem to want to help the middle class, but the fact is that they will do exactly the opposite, as I am about to show.

Through the tax measures they have proposed, the Liberals seem to want to drive those most in need of help into poverty and debt. These measures will prevent the public, which does not always have access to tax shelters, from saving and setting money aside tax-free.

According to the Institut de la statistique du Québec, the median employment income of workers in Bellechasse between the ages of 25 and 64 is $38,289. The median income for workers in Lévis in the same age bracket is $46,384. Those data are from 2013, so they are quite recent.

The measure we are talking about today does very little, since it is really a tax cut only for those who earn an annual salary of $45,282 or more. Anyone who earns less than $45,282 gets nothing.

What is more, this bill is not revenue neutral. In other words, in order to pay for a tax cut for those who earn more than $45,000, those who earn less will be forced into debt and therefore into poverty. That is the reality with regard to the bill currently before us. The Liberals are saying that they have something else, but today we are talking about Bill C-2.

People who earn less than $45,000 will see the government debt, our collective debt, increase so that those who earn over $45,282 can pay 1.5% less in taxes. That also applies to those who earn $150,000, $200,000 or $300,000 a year. Everyone with an income in the $45,282 to $90,563 tax bracket, the so-called middle class, will be eligible for these savings.

However, 70% of the population earns less than $35,000, so one can only imagine how many people have incomes less than $45,000. All of these people will get poorer because the measure is not revenue neutral. Tax savings come at a cost. According to Statistics Canada, the nearly 18 million people who earn less than $35,000 a year will go into debt and become poorer because of this measure.

Speaking of the middle class, it is really a Liberal myth. Who is part of the middle class? It is difficult to determine and could be defined in a number of ways. Some say that the middle class is the portion of the population that is neither rich nor poor. However, what is the middle class? I would like to share what renowned Quebec economist Pierre Fortin has to say on the matter.

He considers the middle class to include families with incomes between $44,660 and $95,700 per year. A typical family has two incomes. Once again, families that fit the definition of middle class do not earn enough to benefit from the Liberals' tax cut. That is the reality.

However, people who earn $150,000, $200,000, $300,000 or $500,000 a year will pass go and collect their savings of 1.5% on the portion of their income that falls within that tax bracket. That speaks volumes. I gave the average income of people in Bellechasse. I gave the average income of people in Les Etchemins. We are talking about $38,000 a year. The measure that the Liberals are proposing kicks in at a minimum of $45,000 per year and therefore does not apply. It is not good for Lévis, it is not good for Bellechasse, and it is not good for nearly 70% of the Canadian population.

What we know is that this will create a deficit. The parliamentary budget officer said so. He said that this measure would lead to a deficit. Obviously it is the taxpayers who will have to pay. That is the main reason I am against the measure before us today. It is in stark contrast to the tax measures and policies that our government put in place over the past 10 years.

Yesterday, I was reading Le Soleil, and Romain Gagné, from Quebec City, said:

From the...2008-09 recession through all the subsequent years until 2014, Canada had the strongest economic growth of the G7 countries, with 15.6% [growth, surpassing the Americans]. The debt burden was the lowest of the G7 countries at 15.6% versus 13.5% for the United States, and the middle class was the wealthiest of the G20 countries, according to a study cited by the New York Times.

Indeed, we have sound fiscal management, but we also put in place effective measures, not like the ones in Bill C-2, which do nothing for the workers in Bellechasse and Les Etchemins who do not earn $45,000 a year, who earn less. Our measures helped those who needed it most. That is what our government did. That is how we ended up in The New York Times with the wealthiest middle class in the G20.

It was because we brought in income splitting for seniors. More than a million senior couples were able to benefit from it. Hon. members will recall that in 2011, we increased the guaranteed income supplement to help the most vulnerable. We also implemented a number of tax measures, including more than 100 tax cuts, ensuring that the average family would benefit from a tax cut of more than $5,000.

We can be very proud of the fact that the tax-free savings account helps 2.7 million seniors. That is another thing that this bill attacks. The Liberals want to restrict this safe and flexible savings option. They want to prevent Canadians from having tax-sheltered savings. They want to push us into debt and give the rich a break, at the expense of those who earn less. In short, that is the rather obvious reason why I oppose this measure.

I would like to remind members that over the past 10 years, under a Conservative government, almost 400,000 seniors were taken off the tax rolls. We did not go looking for money in the tax brackets for those earning a lot of money, but we did, in a way, erode the tax base so that those who earn less no longer pay taxes. Those are the responsible and progressive tax measures that the Conservative Party introduced. That is not at all what we have in Bill C-2.

In closing, it seems that when the Liberals moved from the opposition to the government benches, they forgot what they had said. I would like to quote the member from Papineau, who, on May 13, 2015, said:

Mr. Speaker, if the Prime Minister thinks that wealthy families like his and mine should be getting new benefits, then I look forward to the debates.

That is what we are talking about today. Society's highest-earning members are giving themselves a tax cut. Those who earn the least, such as the people of Bellechasse—Les Etchemins—Lévis, are being taken for a ride because they will have to foot the bill for the deficit and pick up the pieces. We are talking about $8.9 billion over the next six years.

We will stand up for taxpayers and families, for the people who most need help, and we will vote against the Liberal government's bill, which will make the neediest even poorer.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, my question follows on the question from my Liberal colleague, who tried to suggest that Bill C-2 was a progressive measure to help Canadians who need help, the middle class. The member who spoke identified that there are many people who aspire to the middle class or consider themselves to be the middle class, who would not be helped by the measures in Bill C-2 at all, and in fact it would then raise taxes on a whole range of other Canadians.

The previous Conservative government undertook a reduction to the GST to reduce consumption taxes. The lower-income and lower-middle-income people consume most of their income, and therefore lowering the consumption taxes and raising the basic personal exemption, which the Conservative government also did, also took hundreds of thousands of Canadian families off the tax rolls entirely.

Could the member comment on how Bill C-2 would actually miss some Canadians who are probably the most deserving of relief?

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I have had the opportunity to listen to a number of New Democrats talk to Bill C-2. We look at Bill C-2 as a commitment that was made to Canadians. The Liberal Party wants to build the middle class, believing that a healthy middle class means a healthy economy. This is an investment in the middle class.

The New Democrats are somewhat critical of it, but they are supporting the legislation, and I do appreciate their support. When we complement Bill C-2 with other actions the Government of Canada is taking, such as the child benefit plan, which is going to raise literally hundreds of thousands of children out of poverty, would she not say that, looking at the bigger picture, for the first time in many years we are seeing a very progressive attitude in dealing with the issues of poverty and enhancing the strength of Canada's middle class?

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am pleased to rise in the House today to debate Bill C-2, which was introduced in December and is now being debated in the House.

Middle-class families are losing ground even though they are working harder than ever. What these families need is a government that is concerned about their situation and will fight against growing inequality. Unfortunately, we see that this government is doing the opposite. Liberals have repeated for months and months that they have a plan for the middle class. They promised quick, urgent and positive change. However, we see today that we know very little about how these major changes will happen and even less about when they will happen.

Bill C-2 was a golden opportunity to make good on these promises and to put words into action. Unfortunately, the Liberals' plan is quite disappointing.

The Liberals' proposed tax plan does nothing for 60% of Canadians, six out of 10 Canadians. Once again, the wealthy are the ones who will benefit. The NDP put forward solutions that would benefit a large number of Canadians and would allow a fairer distribution of tax cuts: boosting the national child benefit supplement, increasing the guaranteed income supplement, creating a $15-a-day national child care program for all Canadian families, and restoring the tax credit for labour-sponsored funds. These realistic, progressive measures would provide real help for the middle class.

The Liberals campaigned on a platform focused on the middle class. As my colleague from Rimouski-Neigette—Témiscouata—Les Basques mentioned in his speech in the House, we want to know how the Liberal Party defines the middle class. This is a legitimate and important question. This government keeps promising tax cuts for the middle class. However, as the parliamentary budget officer explained very clearly in his report, the real middle class will not benefit from this government's promised tax cut. A tax cut for the middle class should benefit the middle class.

When we really look at the Liberal plan, it is quite clear that unfortunately, it does not make sense. The median income in Canada is about $31,000 a year. Obviously, this means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.

If we imagine a pizzeria worker in my riding who earns $20,000 a year, will he benefit from this tax cut? Unfortunately, no. Will a social worker who earns $43,000 a year benefit from this tax cut? The answer is still no. The reality is that someone who works hard and earns $50,000 a year will probably receive only $20 or $30. Is that real change?

One has to wonder who is really going to benefit from this change. Who is really going to benefit from these cuts? Who could benefit? When we look closely at the figures, we see that this will benefit people who earn more than $90,000 a year. What is more, someone who earns $200,000 a year will get the most out of this tax cut. Saying that this will benefit the middle class is not entirely true.

I hope I did not lose too many of my colleagues with all those figures, but they are important in understanding just how much hard-working families, our seniors who often live in poverty, and the real middle class will unfortunately not benefit from these measures.

If we take the median income, people will receive nothing. If we take the income that everyone associates with the middle class, in other words, $45,000, people will receive nothing. Those who will receive the biggest slice of the tax-cut pie are the top 20% income earners. That is not the middle class. The Liberals' proposed tax cuts will help the rich, not students or young families.

When I talk to groups in my riding and my constituents about this, they are disappointed. Like me, and like most Canadians, they expected the tax cuts to help those who need it most and to benefit the real middle class.

During the election campaign, people who believed they were part of the middle class were told over and over again, for nearly 80 days, that they would finally have room to breathe and that they would be given tax breaks. Today, they are realizing that that is not the case.

Unfortunately, the middle class will not benefit from these measures; only the richest 20% will. That is what the figures say. When middle-class Canadians file their income tax returns, they will be surprised, and not in a good way.

In fact, most Canadians will see that they cannot benefit from the tax cuts that this government promised them. Only 20% of the population will be eligible for the tax cuts, even though they were supposed to give the middle class some breathing room.

The fact that the tax breaks will benefit those who earn $200,00 a year and not those who earn $39,000 shows just how inequitable the proposed tax breaks make the tax system. That is really unfortunate.

After the bill to amend the Income Tax Act was introduced, I read with interest what Luc Godbout, an eminent tax expert in Quebec, had to say about it. When looking at how this would affect couples, he determined that, if a couple had a combined income of $250,000 a year, they could receive a tax break of up to $1,120. However, a hardworking couple in my riding with a combined income of $75,000 a year, who sometimes has trouble making ends meet, would receive an average of zero to four dollars. That is really disappointing.

The NDP developed a plan to fix the Liberals' tax plan, to ensure that the government's measures truly reflect its campaign promises. Our plan would reduce the tax burden on middle-class and lower-class workers. We urge the Liberals to take our suggestions so that we can help those who truly need it.

Our plan is simple. The NDP calls on the government to lower the tax rate for Canadians in the first tax bracket from 15% to 14%, instead of lowering the tax rate for Canadians in the second tax bracket. This way, eight out of ten taxpayers would see a change in the amount of tax they pay. This solution would benefit many more taxpayers. Under our proposal, people earning the median income could see a reduction of up to $250 a year, but these people get nothing under the existing plan.

Our concrete proposal could really help the middle class. That is what the people of Saint-Hyacinthe—Bagot and the 337 other ridings want.

[Arnold Chan, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I want to thank my friend from Regina—Qu'Appelle for his comments. I listened very carefully to his contribution to the debate on Bill C-2, and I take to heart what he was saying about the inflationary factors that ultimately may erode the savings of Canadians, but what we really ultimately need to look at is a fundamental difference in approach with respect to savings.

This side of the House is not opposed to Canadians saving their hard-earned money. The question at the end of the day is this: who ultimately benefits? Who can actually maximize the contribution limits that had been proposed by the previous government, the new savings limits that had been proposed for TFSAs? From the perspective of his particular party, was the increase from $5,500 to $10,000 an inflationary factor, or was it fundamentally about rewarding those who fundamentally do not need it?

The House resumed consideration of the motion that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee, and of the amendment.