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.

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

Thank you, Chair.

I have two quick questions. First of all, on the transparency of financial reporting, I think you were clear that, with these three funds that existed, there was some concern that if people had known how much money was really there, there might have been more claimants come forward. Definitely transparency will be important. I know that when it's removed, like it was in the first sitting of Parliament with Bill C-2.... The financial transparency for indigenous reporting was removed with some negative consequences.

Is there a way of perhaps combining the way the funds are reported, so that they are insurance and uncovered or uninsurable liabilities? Is that a way of reporting with transparency without necessarily dangling a carrot for others?

Public Complaints and Review Commission Act

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

Madam Speaker, the member took the liberty to talk about our budget. He made reference to the middle class, so I want to ask him a question about the middle class.

Given the Conservative policy of tax cuts, which is all they are advocating for nowadays, does the member feel any remorse or regret in regard to voting against Bill C-2, which provided Canada's middle class a tax cut?

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

Madam Speaker, it is a pleasure to rise to speak to an important piece of legislation, legislation that I would have liked, ideally, to have seen pass earlier. I would like to break down my comments into a couple of different sections. First, I want to talk about something that has already been raised by two previous speakers and that is the issue of timing.

It is important that we recognize that a substantive report was provided many years ago, when Stephen Harper was prime minister of Canada, that took a look at the ways we could reinforce public confidence in Canada's Royal Canadian Mounted Police, given some circumstances that were taking place at the time. That report came out with a number of recommendations.

One of those recommendations was the idea of having some form of an independent commission that would be able to address complaints, with respect to the RCMP, and to be able to investigate. I looked up that report, and I thought that it had been from around 2005 or 2006. I understand that it was actually brought to the House in 2006.

Mr. Harper was the prime minister at the time, and he chose not to take any sort of action on it. When the government changed in 2015, we did a considerable amount of work and effort on doing an overall review.

The Department of Justice had a number of pieces of legislation that would have been before them. We have been debating several pieces of legislation, virtually from 2015, on a wide spectrum of that department's responsibilities. This is our third attempt to get the legislation through, dealing with the commission.

I believe that our very first piece of legislation was Bill C-2, which was tax relief for Canada's middle class. Members will recall that this was when we reduced the taxes of Canadians, for the most part. We had the 1% wealthiest get the extra tax, but that was our first major piece of legislation.

From then to today, there has been an extensive legislative agenda. We have had to go through some fairly difficult times. For example, the worldwide pandemic required numerous pieces of legislation.

I do not know how many times I have stood up inside the chamber to talk about Conservative filibustering on government legislation. We have seen that consistently for years now. We take a look at it and we say, well, today, we are talking about Bill C-20, legislation that is significant. Not only does it reflect on a report that was provided back in 2006, but it is also a reflection on several years of consultations with Canada's border control agency. Not only are we talking about the RCMP today but we are also talking about the Canada Border Services Agency.

The CBSA plays a critical role, as does the RCMP, every day, seven days a week, 24 hours a day. That whole agency is now being provided the same opportunity that the RCMP with the public and the issues that have been raised with regard to both agencies. I see that as a very strong, powerful piece of legislation that will make a difference.

Earlier I asked about the Bloc's support for this. Its members were fairly clear that they would vote in favour of it. They saw the legislation as a positive and were anxious to see it pass through the House. Then we asked the New Democratic Party about the issue of getting the legislation through the House and the NDP seemed to be just as supportive, recognizing the value of the legislation and the desire to see it pass through the House. Both parties were somewhat critical of the government for not passing it earlier. That is why I highlighted the fact that there was substantial legislation.

If time permitted, I would go into the different types of legislation that the government has had to introduce. There is a finite amount of time that the House actually sits. That is one reason why, with the support of the New Democratic Party, we were successful in being able to extend hours so we could sit beyond six o'clock. If we need to sit until midnight for more debate, we are in that position, thanks to the support from the New Democratic Party. Both political entities have acknowledged that substantive legislation needs to be passed. One way we can ensure there is time for debate is to provide those additional hours, if more hours of debate are required, particularly by the official opposition, prior to passing the legislation.

From questions posed by the Conservatives, I am of the opinion that they also support this legislation.

Once again, we might actually find ourselves in a position where political parties support the legislation. I suspect the Green Party will take a position on it, likely in support. I must congratulate the leader of the the Green Party, the member for Saanich—Gulf Islands for taking on that role again.

I suspect we have legislation before the chamber that will receive unanimous support of getting it to committee. It would be wonderful to get a sense from the official opposition as to when it would like to see this legislation go to committee. In other words, how many speakers will the Conservatives be putting up? For example, if they are going to put up more than three or four speakers, maybe they should look to the government and suggest we sit additional hours in an evening, so we can get the legislation passed and get it to committee.

It seems to me that the desire is there to see the legislation pass to the committee. There are more government bills on the horizon on which we would like to have debate. When I hear that all members are supporting the legislation, my concern is that the Conservatives might double down, insisting they put up speakers until the government brings in time allocation. The leader of the Green Party will be in opposition to that time allocation and we will have to bring in other parties to support it in order to get the Conservatives to pass the legislation and allow the bill to ultimately go to committee.

We should try to avoid all that. If it is not resolved today, I would encourage the opposition House leader, in particular, to let the government House leader know how many actual speakers the Conservatives anticipate, so we can get it into committee. Literally thousands of people are being directly or indirectly impacted. I would argue that all Canadians are, in one way or another, affected by it.

With respect to the cost expenditure, we are talking about well over $100 million over five years, but the trade-off with the cost factor is building what is absolutely essential when it comes to law enforcement, whether it for our borders or anywhere in between. Public confidence in our border agency and RCMP is absolutely critical. This is one way we can reinforce the many things that need to be done related to the fine work that both CBSA and RCMP agents do for us seven days a week, 24 hours a day.

In listening to the comments from members, I want to provide a general thought with respect to bad apples versus the vast majority. For the vast majority in both agencies, we continue to receive the best service that is humanly possible.

I do not have a problem in comparing our national institutions, in particular, the RCMP, to any other law enforcement agency anywhere in the world. Its members are constantly called upon from other countries and from within Canada to perform in many ways, whether it is training and assistance in countries like Ukraine and many others throughout the world to the absolutely fantastic work they do in Canada.

The same principle applies to the majority of those who work at the Canada Border Services Agency, and I recognize their phenomenal effort. It is very delicate work, as some members have implied. It is almost like a border agent is a semi-god of sorts when someone comes into Canada. That individual is completely dependent on that border agent to make a decision that is favourable to the nation and that decision could ultimately prevent the person from coming into Canada.

The bad apples cause a great deal of issues for both agencies, and we often will see that take place. After all, it is the incident that the public will react to through media reporting which reflects negatively on the institution. For example, when an RCMP officer takes an action that reflects negatively on the entire force, that gets amplified, whether through social media or mainstream media. That is when the seeds of doubt or questionable behaviour are planted in the minds of many, and justifiably so. However, it is because of those bad apples in particular that we need this legislation.

This is why it is so important to recognize the finances to support the public complaints and review commission. That is money well spent.

The public complaints and review commission will have the ability to review and investigate the conduct and level of service of an RCMP officer or a border control agent when an has been issue raised. That is the essence of the legislation. It will allow the chair of the commission to initiate some form of a disciplinary action where it is deemed warranted. Again, that type of action is necessary. At the beginning, when I talked about the time frame, I put it in the form of a question. There has been a lot of time since the report, but the essence of the legislation is far beyond what was recommended back when Stephen Harper was the prime minister.

The vote of confidence that is established when the commissioner provides a recommendation on a behaviour that has taken place is what provides that confidence. Through that recommendation, we will receive an annual report. That annual report will highlight the many different things with which the commission has had the opportunity to deal.

I recognize the importance of the makeup of the commission. I suspect, given some of the suggestions or ideas from the opposition party, we will likely see some healthy debate on this at the standing committee. Given the department's interest and level of time commitment to the legislation, I believe the government is open to suggestions, and I would encourage members to bring those ideas to committee.

I understand there are concerns, particularly related to a number of issues of the day. The Conservatives have raised issues like illegal guns crossing the borders. When we think of the Canada Border Services Agency, it is important to note that it deals with issues such as arrests, detentions, removals, human trafficking, customs, trade, immigration and illegal firearms. The Conservatives are quick to criticize the government on that issue.

I suggest that the Conservatives might not want to bring that issue up during questions and answers. If they do, I will talk about the tens of millions of dollars in cuts to the Canada Border Services Agency that the Conservatives put in place, which reduced the number of border services officers and that enhanced the opportunities for illegal trafficking of guns and weapons coming into the country. I will remind them of their responsibilities to the issue and their lack of commitment and support of Canada Border Services Agency before. Maybe they could come up with a different question, but I will not tell them what they have to ask.

I hope, as I explained in depth why it is important, that the legislation passes.

Motion in relation to Senate amendments

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

Mr. Speaker, I want to take this opportunity to give a little ad at the beginning of my speech. Tomorrow is an important day. June 12 is Philippines Independence Day. I want to invite all members from all sides of the House to come out after their caucus meetings and walk across the street from West Block to SJAM to participate in the Filipino heritage event.

I want to add my thoughts in regard to Bill C-59 and I will approach it in two ways. First I will speak to the process that has brought us to the bill before us today and then I will provide thoughts in regard to some of the content of the bill itself.

To say that the issue of security and freedom is a new debate in the House of Commons would be a bit of a stretch. I can recall the debates surrounding Bill C-51 several years ago when Stephen Harper was the prime minister. He brought in that piece of legislation. At the time, the Liberal Party, as the third party, actually supported that legislation.

However, we qualified that support in a very clear way. We indicated throughout the debate that there were some fundamental flaws in Bill C-51, and that if we were to ultimately win in the election of 2015, we intended to bring forward some changes that would rectify some of those fundamental flaws.

I can recall the hours of debate that took place inside the chamber by members of all political parties. I can remember some of the discussions flowing out of the committees at the time. There was a great deal of debate and a great deal of controversy with the legislation. Even while campaigning during the last federal election, it was a topical issue for many people. It dealt with issues of an individual's rights versus having that sense of security. I always made reference to the fact that Liberals understand how important individual rights are. That is one of the reasons I often highlight that we are the party that brought in the Charter of Rights and Freedoms.

If we take a look at the original Bill C-51, even though the principles were very admirable and we supported it and voted for it, even though at the time we received some criticism, we made it very clear that we would make changes.

This is the second piece of legislation that has attempted to make good on commitments we made to Canadians in the last election. I really enjoy is being able to stand up in this place and provide comment, especially on legislation that fulfills election commitments, starting with our very first bill, Bill C-2. That is a bill I am very proud of, and I know my caucus colleagues are very proud of that bill. It concerns the tax break for Canada's middle class. There is the bill we are debating today, Bill C-59, the second part of a commitment we made to Canadians in the last federal election, which talks about the issue of public safety and privacy rights. Yet again, we have before us another piece of legislation that ultimately fulfills another commitment we made to Canadians in the last federal election.

I mentioned that I wanted to talk a bit about the process. In bringing forward Bill C-59, I do not think we could come up with a better example of a minister who has really understood the importance of the issue, or who has gone far beyond what any other minister in the Stephen Harper era ever did, in terms of consultation.

Even before the bill was introduced, we received input from thousands of Canadians, whether in person or through the Internet. We also received input from members of Parliament, particularly from many of my Liberal caucus colleagues. We were afforded the opportunity to share with the minister and the caucus some of the issues and concerns that came out of the last election. A great deal of consultation was done. The minister on several occasions indicated that the comprehensive dialogue that took place allowed for a substantial piece of legislation at the first reading stage.

Shortly after that, the bill was sent to committee prior to second reading, which allowed for a more thorough discussion on a wider scope of issues. The bill was debated at report stage and then at third reading. It was sent to the Senate, which has sent back amendments, which is where we are today. That process indicates that we have a government, as the Prime Minister has often indicated, that thinks the roles of our standing committees and the Senate can improve legislation. We have seen many changes throughout this process. This bill is a stronger and healthier piece of legislation than it originally was at its first reading stage.

I wanted to give that bit of background and then do a comparison regarding why the government had to move closure just an hour ago. I want to make it very clear to those individuals who might be following the debate, whether it is on Bill C-59 or other pieces of legislation.

We have an official opposition party that is determined to work with the NDP, and I often refer to it as the unholy alliance of the Conservatives and the New Democrats. They work together to try to prevent any legislation from passing. They will do whatever they can to prevent legislation from passing. It does not take much to do that. At the end of the day, a few members can cause a great deal of issues to prevent legislation from passing. There is no sense of responsibility coming from the opposition side in regard to working hard for Canadians and recognizing the valuable pieces of legislation that would be for the betterment of our society. In fact, those parties will put up speaker after speaker even on non-controversial legislation, because they have no real interest in passing legislation. If it were up to the Conservative opposition, we would still be debating Bill C-2. The opposition members have many different tools, and they have no qualms about using them. Then—

Budget Implementation Act, 2019, No. 1

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

Mr. Speaker, it is always a pleasure to address the chamber on a wide variety of issues. This evening is special in the sense that we are talking about the budget. When we talk about the budget, we talk about priorities and I am happy to share my thoughts on the government's priorities.

As the member for Winnipeg South pointed out, he and I go back 30 years, both on the provincial and national scene. I have learned to respect many of the things he does, especially on issues surrounding the environment, women's issues and Churchill, Manitoba. These are the types of issues he really digs his teeth into and produces tangible results. I respect the effort he puts in, day in and day out, in serving the constituents of Winnipeg South. Combined, we bring the south end of Winnipeg to the north and the north to the south. As he pointed out, it is friendly Manitoba and it has always been a pleasure to work with him in many capacities.

Having said all of that, I would like to pick up on a couple of points. The overriding issue for me has always been to demonstrate that, as a government, we have been very effective in a relatively short period of time. The budget is all about priorities and ensuring the economy and the social fabric continue to move forward. When I say the social fabric, I am talking about diversity. One of the most compelling facts is the number of jobs that have been created since we have been in government: one million jobs. That is a significant achievement.

When we talk about those one million jobs, we ask ourselves how that happened. It is because we have a government that is committed to working with Canadians in all regions of our country. We have a government that is committed to working with many different stakeholders, provinces, territories, indigenous people and municipalities, and by working with Canadians, we were able to deliver in a very tangible way.

I referenced something the other day and I want to repeat it. From day one, we have been focused on Canada's middle class and those aspiring to be a part of it, and that has been demonstrated from the very first piece of legislation we introduced, which my colleagues will recall was Bill C-2. It is what gave the middle class of Canada a substantial tax cut, putting hundreds of millions of dollars into the pockets of Canadians.

If we carry that piece of legislation over to the budget of 2016, the very first Liberal budget under this administration, we saw substantial increases to the guaranteed income supplement, which lifted tens of thousands of seniors out of poverty. There were also substantial increases to the Canada child benefit that completely reformed it, which again lifted tens of thousands of children out of poverty. Through those things alone, we invested in Canadians in very real and tangible ways. We put hundreds of millions of dollars into the pockets of Canadians in all regions of our country. In Winnipeg North alone, there is $9 million a month for children, every month, in the form of the Canada child benefit.

This is how to support the middle class and those aspiring to be part of it and how to give a helping hand to those who really need it. By doing that, we increased the disposable incomes of Canadians. It meant more money was being spent in our communities in all regions of our country, and by doing that, we created jobs.

Take that into consideration along with the historic investment in Canada's infrastructure. In the most recent budget we have seen an additional allocation for municipal infrastructure investment. That investment in infrastructure means hundreds of millions of dollars being invested in every region of our country, creating more jobs.

Why have we been able to create one million jobs by working with Canadians? Compare what we did in the last three and a half years to the 10 years of misery with the Harper regime. For Canadians who follow the debate on the budget they will see there really is no change in the opposition today. The only change is the incredible amount of influence that Doug Ford has with the Conservative Party. The Premier of Ontario now sits on that small circular table with Stephen Harper and the current Conservative leader.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am glad the member brought up the government's Bill C-2, which was in fact the cut to the middle income bracket, not to the middle class.

I have had this exchange with the member several times now, probably more than several times over the past few months and year. The government offered a tax cut of over $800 to every member of Parliament in this Chamber. However, people who were earning $45,000 or less got nothing. They got carbon taxes and higher payroll taxes. They actually got less at the end of the month. People who were earning $60,000 a year, which is more than the median income, more than the average income a person would earn in Canada, got about a $260 tax cut.

The member keeps repeating that this was for the middle class, but in fact every member of Parliament received a much higher tax break. That is wrong. That is not the way this is supposed to work. We are not supposed to fill our pockets; we are supposed to help Canadians.

Will the member finally admit that the middle income tax cut was not for the middle class, that it did not achieve any of those goals? In fact, the numbers provided by the CRA show that the extra tax put on the so-called 1% did not generate the revenue the government thought it would, that we lost over $4 billion.

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

Mr. Speaker, it is always a pleasure to rise and address the House on the important issues we have to address. What is more important than the national budget? It is one of those measures that we can read a lot into, because it is the way the government establishes its priorities. From day one, this government has been very clear to the House, and through the House to all Canadians, and I would even reverse that by saying that through Canadians, we have been very clear to this House, what the intentions of this government are.

As I have referenced in the past, we have a Prime Minister who constantly challenges members of the Liberal caucus to stay connected with their constituents, the people we represent, and to bring their thoughts and ideas to the floor of the House, the standing committees and the caucus. I really believe that a lot of positive things have happened as a direct result.

Before I get to the core issues, I would like to use the example of pharmacare. On numerous occasions, I have had the opportunity to stand in my place and table petitions dealing with pharmacare. We know how passionate Canadians are about our health care system. It does not matter what region of the country we live in, health care is an important issue. As such, I have always taken it seriously, not only here in the House of Commons but also in the days when I was an MLA.

Under this Prime Minister, for the very first time in decades, we have seen an open mind toward a national pharmacare plan. I would argue that for the first time in decades, we have seen not only members of the government but also some opposition members talking more about a pharmacare plan. Virtually months after the last election, we saw the standing committee put meetings on its agenda to deal with pharmacare, which ultimately led to a report.

We have seen commitments within our budget measures to further the debate and dialogue on pharmacare. We have seen members of Parliament go into their constituencies and work with others.

I am very proud of the fact that my daughter Cindy has been very strong on this file and has been advocating for a national pharmacare plan on the floor of the Manitoba legislature. She recognizes, as I do, that this is an important issue for the residents of Winnipeg's north end and beyond.

If we listen to my caucus colleagues, they will talk about the importance of a national pharmacare plan. I think that embodies some of the things the Prime Minister has talked about, which is that as members of Parliament, it is important that we stay in touch with what our constituencies want and expect.

Let me suggest to members that it is one of the important issues on which I hope to see some tangible results in the coming days, weeks, months and, with the approval of my constituents, years. It is an issue I want the residents of Winnipeg North to understand. I will continue to advocate for it until we have some form of national pharmacare plan we can all be proud of, a plan that will complement the national Canada health care system we have.

Having said that, I want to talk about day one. I sat in the opposition benches a number of years ago when our current Prime Minister was elected leader of the Liberal Party of Canada.

I thought it was significant that the day he made the announcement that he was interested in putting his name into the leadership race, he highlighted the importance of Canada's middle class. Nothing has changed. The then leadership candidate, who then became the leader of the Liberal Party and is now Canada's Prime Minister, has consistently indicated that Canada's middle class and those aspiring to be part of it are the first priority of this government and the Liberal Party.

He made that pledge in the last federal election. I believe that if we look at the budgetary measures we have taken since day one of getting into government, we will find example after example of what we have done as the government to further the interests of Canada's middle class.

If we look back at the beginning, and Bill C-2, we will see the tax cut for Canada's middle class. At the same time, we recognized the sense of tax fairness, and we saw a government that put an extra tax on Canada's one per cent, the wealthiest Canadians. The revenue generated from that, in good part, went to pay for the tax break for Canada's middle class.

I am very proud of the fact that we have seen a government that also wants to do what it can to deal with issues such as poverty. That is why we saw the enhancement of the tax-free Canada child benefit program, literally lifting tens of thousands of children, going into hundreds of thousands, out of poverty. Then we saw the guaranteed income supplement, which also lifted tens of thousands of Canadians out of poverty.

I want to combine the three of them and use it as a tangible example of this point. We took money and put it into the pockets of Canadians in every region of our country. We supported the middle class and those aspiring to be part of it, those who needed that helping hand, and we put money to work. I say that because if we invest in our middle class, we are really investing in Canada. The hundreds of millions, going into billions of dollars annually that we invested in Canadians ultimately assisted us in providing tangible results. It increased disposable income and, I would argue, helped create the one million jobs this government, working in co-operation with other stakeholders, has been able to generate in every region of this country.

In so many ways, we are the envy of the world because of the economic policies we have put in place. We have put money in the pockets of Canadians by investing in infrastructure. Even with this most recent budget, we are giving tens of millions of dollars. In the city of Winnipeg, just over $35 million is going into municipal infrastructure, creating jobs, building our country and investing in Canadians. That is what this government has been all about over the last three and a half years.

We have seen tangible results. This is why I am very happy and quite content. The summer is quickly approaching. We only have another 12 or 13 days left in this sitting. I look forward to a summer where we can reach out and tell Canadians what has been taking place in the last three and a half years.

Come October, when people do the comparisons, they will recognize and appreciate all the work we have been able to accomplish, working with Canadians day in and day out, working hard and delivering.

Energy Costs

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

Mr. Speaker, it is somewhat interesting listening to the Conservatives. We have heard them, not only today but in previous weeks and months, talk about the tax on tax, as if Stephen Harper never did it. One would think the Conservative Party never had a tax on tax.

Every week, Canadians from coast to coast to coast were paying a tax on a tax that Stephen Harper was very supportive of. When people put gas in their vehicle, there is a provincial and federal levy, and then there is the GST. My understanding is that the GST is a tax that is applied onto a tax. Yet, the Conservative Party is so offended by taxes on taxes, as if it has never happened before.

Why did Stephen Harper not deal with the tax on tax? What happened then to the oomph of the Conservative Party today, saying that a tax on a tax is bad? The Conservative Party is probably the one that came up with the idea of a tax on a tax. It was actually the Progressive Conservative Party in Alberta that first came up with the idea of a price on pollution in North America. That is the reality of it.

The Conservatives are really good at opposition, and I have said this before: I hope we keep them in opposition for many years. However, we really need to reflect on some of the speeches that Conservatives give in the House. They are truly amazing. We hear all about the balanced budget stuff. Conservatives try to give the impression that the Conservative Party is good at managing budgets. Seriously.

Stephen Harper took a multi-billion dollar surplus and turned it into a multi-billion dollar deficit even before there was a recession. That is the honest to God truth. That is the reality. Stephen Harper had deficit after deficit, and I would have to say it was for eight or nine years. He accumulated over $150 billion in deficits, and yet Conservatives try to give us advice on deficits.

By the way, as we know, the current leader just flip-flopped on his deficit projections. Now a Conservative government would take five years to get rid of the deficit. I can appreciate that, if we take a look at what Liberals have been able to do in the last little while because of many of the budgetary measures we have taken. We have seen the generation of over a million new jobs in Canada in the last three and a half years, because of some of the changes we have made.

The Conservative Party wants to ask about this tax or that tax, but what did it really do when it mattered the most to most Canadians?

The most substantial tax break given in many years by the House of Commons was in Bill C-2. We call it the middle-class tax break, the tax cut for Canada's middle class. Millions of families benefited all across Canada. Hundreds of millions of dollars were given to Canadians, to the middle class and those aspiring to be a part of it.

What did the Conservative Party do? The Conservatives voted against it. It is hard to believe that when it comes right down to voting, a Conservative Party that preaches about giving tax breaks voted against our tax cut. In fairness, the Conservatives also voted against a tax increase on Canada's wealthiest 1%, which is consistent with many of the different types of boutique tax credits the Conservatives like to come up with.

I would suggest that the Conservative Party and those deep thinkers within it, and here I am talking about people like Doug Ford and Jason Kenney, the potential leadership contenders in the next go-around, need to sit down with Stephen Harper and the current leader and start revisiting the types of issues they have to try to overcome between now and the next election.

When I go door-knocking and speak to residents of Winnipeg North, I am always happy to share with them the reality of the Conservative Party, and I must say that it can be very discouraging at times.

Criminal Records Act

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

Madam Speaker, earlier today I indicated that we look at the legislation and do a comparison. From day one, I have made numerous references to Bill C-2, which has given the middle-class of Canada a substantial tax break while at the same time increasing the tax level on Canada's 1% wealthiest. Today we are debating Bill C-93, which is in essence going to provide a pardon for simple possession of cannabis. Whether it was day one or today, this is a government that believes we should work hard every day.

Would the member agree, as we look at the next 14 or 15 days of the House's sitting, that we have a responsibility to do what we can to support legislation and see it come to a vote, believing that Canadians will benefit from members of Parliament who are prepared to work all the way to the very last day?

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

Madam Speaker, I disagree with the member across the way, which should come as no surprise. When we take a look at this legislation, much like many other pieces of legislation this government has been introducing virtually from day one, it is yet another piece of legislation that fulfills a campaign commitment that the Liberal Party made in the 2015 election.

However, I guess where we differ from the Conservative Party is that I believe, whether it is Bill C-2, which we brought in on day one of our mandate to give Canada's middle class a tax break while at the same time putting a special tax on Canada's wealthiest 1%, or Bill C-93, which we are debating today and which would allow for a pardon for individuals with convictions for simple possession of cannabis, these are all good, solid, sound pieces of legislation, and I am grateful.

The member is supporting this legislation, I understand. Would the member not agree that we should continue to look at ways in which we can pass legislation for every day that we sit. Would he agree that just because we are in the last 10 or 15 days, we do not have to stop passing legislation?

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

Madam Speaker, we hear members on the opposition benches say that we have 17 or 18 days left to go. From day one, this government introduced Bill C-2 that gave a tax break to Canada's middle class and put an extra tax on the wealthiest 1%. Today, we are debating Bill C-93 that will have a profoundly positive impact on Canadians.

Would the member not agree that the number of sitting days left does not matter, that if we are afforded the opportunity to do good work for Canadians by passing legislation that will make a difference in their lives, we should all support and encourage that?

Motions in Amendment

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

Mr. Speaker, this is yet another example of how this government has fulfilled campaign commitments, from the very beginning, when we brought in Bill C-2 to reduce tax rates for Canada's middle class, to this piece of legislation today, Bill C-93, which makes a commitment to pardon individuals for simple possession of cannabis. These are the types of progressive legislative commitments we made in the last federal election.

Would the member opposite not agree that Canadians have an expectation that all members of Parliament will actually work every day, all the way through? That means that for the next 12 to 14 days we should continue to sit and continue to debate important legislation that will have the same type of impact as Bill C-93 does for Canadians, and that is indeed a good thing.

Many of the members opposite seem to feel that maybe we should stop debating legislation. I think that would be bad public policy, given that we can still continue to work hard for Canadians and pass legislation. Would he not agree that we should continue to pass legislation wherever and whenever we can?

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

Madam Speaker, it is a pleasure to rise to address Bill C-93 this morning. I found it actually quite excessive listening to my New Democrat friends on this issue. As the parliamentary secretary put it, I think it is important that we recognize that the NDP tends to grossly exaggerate its stand on a wide variety of issues. This is a good example of that.

In the last federal election, the New Democrats, under Mr. Mulcair, actually said that they were not in favour of the legalization of cannabis. That was their position. Now the member says that we should not hold them to account for what the NDP said back in the last federal election, but in the same speech, he said that he wants to hold us to account for what we said in the last election.

Let us talk about the cannabis issue. What did the government say back in 2015? The Liberals were very clear, and our leader was very clear, that we were in favour of the legalization of cannabis, because we wanted to protect our young people. We wanted to bring in strong regulations. We wanted to go after criminal activities. That was our justification for making that commitment to Canadians back in 2015. The Conservatives, on the other hand, wanted the status quo.

The NDP position was very clear. It did not want to legalize cannabis. It wanted to decriminalize cannabis. Reflect on that. I think the NDP is trying to find relevance in society today, because even the Green Party tends to outdo the NDP on the environment file. Many of the positions the NDP is adopting today are going to the Green Party. On this issue, it is following the Liberal Party. That is fine. We do not mind sharing our ideas with our NDP friends.

However, those following this debate should not be fooled by the type of information the New Democrats are providing on this issue. They argue for expungement, because they are grasping. A few years ago, they were not even in favour of the legalization of cannabis. During the 2015 campaign, we made a very strong presentation to Canadians, and Canadians accepted it, and now, through Bill C-45, we actually have cannabis legalized here in Canada.

The Conservatives and the NDP, that unholy alliance, I would argue, at times come together. The last few days, they have been saying, “Here we are with 18 days left to go in this session and the government is wanting to rush things through.” When we were elected, we made a commitment to Canadians to work hard every day. What do they expect us to do, say that with only 18 days left in this session, we are going to stop, as if there is nothing else for us to do?

From day one, with that very first bill, Bill C-2, to reduce taxes for Canada's middle class while at the same time increasing it for Canada's wealthiest 1%, until the last day we sit, this government's intention has been to continue to deliver for Canadians in a real and tangible way.

The legalization of cannabis took us a considerable amount of time. We cannot just bring in legislation and pass it. Legislation of that nature requires a great deal of background work, such as working with the many different stakeholders, provinces and indigenous leaders. We could not bring in this legislation before we even passed the other legislation.

This legislation is before us today because it is good, sound, solid legislation. This is the type of legislation that is going to have a profoundly positive impact on the lives of many Canadians. That is the reason we are debating it today.

Whether there are 16 days, 10 days or five days left does not really matter. At the end of the day, Canadians can know that this government will continue to work every day to advance good, strong social budgetary policies.

For individuals who have been convicted of simple possession of cannabis, this legislation would allow an expedited pardon for that particular conviction. It is as simple as that. This legislation would expedite it and ensure that there was no cost for receiving that pardon.

For those who have an interest in getting a pardon, this government has made it exceptionally easy for them to do. That is why this legislation is important. It is why we challenge all members of the House to support it.

With regard to the expungement argument being brought forward, a pardon is all that is required. It is far more than the NDP was prepared to offer in 2015. When its members say that it should be expungement, they should put an asterisk there to indicate that it is a lot more than what they were prepared to do back in 2015.

I know that the NDP had a change in leadership. I believe that the current leader says that the legalization of heroin and cocaine should be allowed. I believe that could be a potential election platform coming from the NDP. That is what its current leader has talked about in the past. Maybe the NDP might provide some clarity and transparency on that issue. We are glad that the NDP has accepted the idea of the legalization of cannabis.

The NDP had some influence with the Conservatives. Prior to the last election, the Conservative Party was outright against it. I remember the brochures, the propaganda and the myths being created. Even back then, the Conservatives were more focused on being critical of personalities than on substantive policy issues. The Conservatives were against it. They did not want legalization, and I do not believe they even favoured decriminalization. After the election, they started to talk about the decriminalization of cannabis.

A few of them are saying that they started talking about it a bit earlier. In fairness to my Conservative friends, that might be the case. Having said that, who were the biggest benefactors? I argue that it was the gangs and the criminal element that were the biggest benefactors of the Conservative policy on cannabis. Stop and think about that.

Resuming debate

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we had a very good example this morning with the member across the way.

Contrast that to another example where we had legislation which members of the New Democratic Party recognized that they actually liked. I think it was Bill C-37. I could be wrong on that but if members did a quick check of Hansard, they would be able to find out when members of the NDP supported time allocation. They wanted us to pass that legislation. They recognized the value and importance of that legislation. That is not the only time they did that. The NDP members on a couple of occasions have recognized that they like the legislation and want it to pass and have therefore supported our bringing in time allocation.

What we know is that all parties in this House actually support the concept of time allocation, if it is deemed necessary. Even when I sat in opposition, Peter Van Loan would bring in time allocation, and I remember standing in my place and supporting it, because if one is not getting the support and co-operation from opposition parties in particular and from the government at times, one may need to use time allocation. A lot depends on what is happening in the opposition benches.

I know the government House leader continues to want to work with opposition members. If the government House leader asks how many speakers a party would like to put forward on something or how quickly might we be able to get a piece of legislation through, it is not some sort of trap for the opposition parties. It is to allow for more debate on issues which the opposition members would like to have more debate on.

There are bills that are relatively non-controversial, like Bill C-81, which is historical legislation. I am not going to say that members should not be debating the bill, but based on my 30 years of parliamentary experience, when the will is there to see a bill pass, it passes really quickly as opposed to there being a filibuster. Maybe it would have been better to allow Bill C-81 to actually pass today. I would argue that would have been the right thing to do.

I listened very closely to the member for Sherwood Park—Fort Saskatchewan across the way. All he would say is that it will pass in due time and before the next election it will be passed. He indicated his support for it on behalf of the Conservative Party. The member is playing a game and he knows it. If the Conservative Party really wanted to, that bill could have passed and we could have been debating something else right now. We needed to get an indication to help facilitate debate inside the House.

There are many issues that I would like to debate and, in good part, I have been fortunate to have been afforded the opportunity to do that. The NDP House leader talked about an issue which I am very passionate about: pharmacare. That is not an NDP issue, although the NDP tries to claim it as one. Nothing could be further from the truth. It is an issue today because we have a Prime Minister who is committed to ensuring that we expand our health care system. That is the reason the NDP is talking about it today. It was years ago, when we first came in as government, through a standing committee that the idea started to really flourish.

I participate in a caucus and I have many discussions with my colleagues. We understand the value of it. We understand that we have to work with many different stakeholders. Then the NDP members catch wind of it and all of a sudden they say that they to get out in front of the Liberals on it. That is balderdash.

The NDP does not get credit for something of this nature. If anyone should get the credit, it is Canadians. It is Canadians who have been communicating, whether through the Prime Minister or through members of our caucus, about the importance of pharmacare. That is the reason we have prioritized it. We are looking forward to the report we will be getting toward the end of June.

NDP members talk about housing as if they are leading the file. Who are they kidding? I enjoy listening to the Parliamentary Secretary to the Minister of Families, Children and Social Development. He is one of the most able-minded individuals I know, and he understands the issues of housing in Canada.

In the last federal election, the commitment the NDP made with regard to housing pales in comparison to what this government has put into place. I find it somewhat humorous that the NDP has attempted to stake claim to an area in which this government has moved forward.

From day one, whether in regard to budgetary measures or legislative measures, this government and the Prime Minister have been focused on Canada's middle class. Let us talk about our first piece of legislation. Bill C-2 provided a tax cut to Canada's middle class. Hundreds of millions of dollars are going into the pockets of Canadians. At the same time, the legislation allowed for a special increase in tax for Canada's wealthiest 1%. By the way, the Conservatives and the NDP voted against that.

That was a legislative measure. In our very first budget, we committed to a tax-free Canada child benefit program. Again, this is putting hundreds of millions of dollars into the pockets of almost nine out of 10 families, although I could not tell members the actual percentage. That initiative literally lifted hundreds of thousands of children out of poverty, and the Conservatives and NDP voted against it.

That is why I say that from day one, this government, whether through budgetary measures or legislative measures, has been very active at ensuring we continue to move forward. However, in virtually every initiative we have undertaken, and Bill C-81 is more of an exception, opposition parties have fought us.

Let us recall the last federal budget. Before I comment on some of the content of it, do members remember the day of the federal budget? It was not a good day for parliamentarians. The Minister of Finance wanted to address the House and Canada. All sorts of stakeholders were waiting to hear about the budget. Do members remember the behaviour of members of the official opposition? They were yelling and slamming their desks. They did not want the Minister of Finance to be heard. In my 30 years of parliamentary experience, I had never witnessed that sort of inappropriate behaviour coming from the official opposition. It was embarrassing.

The Conservatives are very focused on trying to discredit the person of the Prime Minister. We can hear it in their speeches. It is the personal attacks, whether directed at the Prime Minister or the Minister of Finance. That is fine. It is the Stephen Harper type of politics, with more and more of Doug Ford's style getting into their caucus and in their policies. It is scary stuff.

One member opposite said that he is going to join our caucus. I believe that could happen sometime soon. If I were to speculate on the Conservative leadership at the end of the year or in 2020, I am thinking it could be Doug Ford, Jason Kenney, maybe the opposition House leader, and I do not know who else.

The bottom line is the Conservatives are so focused on character assassination instead of being a constructive opposition party. That is okay, because as they focus on that negativity, we will continue to focus on Canadians. The results are really showing in a tangible way.

I made reference to the hundreds of thousands of children, and there are also hundreds of thousands of seniors who have been lifted out of poverty as a direct result of this government's actions. In the last three and a half years, we have seen one million new jobs created by working with Canadians. We have seen incredible investments in infrastructure. In the last budget alone, there is a commitment to municipalities. In Winnipeg, I believe it is about 35 million additional dollars. If members were to drive around some of our streets, they would get a better appreciation of why that is such an important investment.

I started off talking about the historical legislation of Bill C-81. We have indigenous legislation that is before the House on language and foster care. These are critically important issues. It is historic legislation. These are two pieces of legislation that we still need to pass. That is why I am here standing in my place saying that we still have 19 days to go. Unlike the Conservatives and the New Democrats, we are prepared to work until the very last day. We are prepared to work late. We have a legislative agenda and we are committed to passing that legislation. We know that this government works for Canadians in every region of our country every day.

Extension of Sitting Hours

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons]

moved:

That, notwithstanding any Standing Order or usual practice of the House, commencing upon the adoption of this Order and concluding on Friday, June 21, 2019:

(a) on Mondays, Tuesdays, Wednesdays and Thursdays, the ordinary hour of daily adjournment shall be 12:00 a.m., except that it shall be 10:00 p.m. on a day when a debate, pursuant to Standing Order 52 or 53.1, is to take place;

(b) subject to paragraph (e), when a recorded division is requested in respect of a debatable motion, including any division arising as a consequence of the application of Standing Order 61(2) or Standing Order 78, but not including any division in relation to the Business of Supply or arising as a consequence of an order made pursuant to Standing Order 57, (i) before 2:00 p.m. on a Monday, Tuesday, Wednesday or Thursday, it shall stand deferred until the conclusion of Oral Questions at that day’s sitting, or (ii) after 2:00 p.m. on a Monday, Tuesday, Wednesday or Thursday, or at any time on a Friday, it shall stand deferred until the conclusion of Oral Questions at the next sitting day that is not a Friday, provided that, if a recorded division on the previous question is deferred and the motion is subsequently adopted, the recorded division on the original question shall not be deferred;

(c) notwithstanding Standing Order 45(6) and paragraph (b) of this Order, no recorded division in relation to any government order requested after 2:00 p.m. on Thursday, June 20, 2019, or at any time on Friday, June 21, 2019, shall be deferred;

(d) the time provided for Government Orders shall not be extended pursuant to Standing Order 45(7.1) or Standing Order 67.1(2);

(e) when a recorded division, which would have ordinarily been deemed deferred to immediately before the time provided for Private Members’ Business on a Wednesday governed by this Order, is requested, the said division is deemed to have been deferred until the conclusion of Oral Questions on the same Wednesday;

(f) any recorded division which, at the time of the adoption of this Order, stands deferred to immediately before the time provided for Private Members’ Business on the Wednesday immediately following the adoption of this Order shall be deemed to stand deferred to the conclusion of Oral Questions on the same Wednesday;

(g) a recorded division requested in respect of a motion to concur in a government bill at the report stage pursuant to Standing Order 76.1(9), where the bill has neither been amended nor debated at the report stage, shall be deferred in the manner prescribed by paragraph (b);

(h) for greater certainty, this Order shall not limit the application of Standing Order 45(7);

(i) when one or several deferred recorded divisions occur on a bill at report stage, a motion, “That the Bill be now read a third time and do pass”, may be made in the same sitting;

(j) no dilatory motion may be proposed after 6:30 p.m., except by a Minister of the Crown;

(k) notwithstanding Standing Orders 81(16)(b) and (c) and 81(18)(c), proceedings on any opposition motion shall conclude no later than 5:30 p.m. on the sitting day that is designated for that purpose, except on a Monday when they shall conclude at 6:30 p.m. or on a Friday when they shall conclude at 1:30 p.m.;

(l) during consideration of the estimates on the last allotted day, pursuant to Standing Order 81(18), when the Speaker interrupts the proceedings for the purpose of putting forthwith all questions necessary to dispose of the estimates, (i) all remaining motions to concur in the Votes for which a notice of opposition was filed shall be deemed to have been moved and seconded, the question deemed put and recorded divisions deemed requested, (ii) the Speaker shall have the power to combine the said motions for voting purposes, provided that, in exercising this power, the Speaker will be guided by the same principles and practices used at report stage;

(m) when debate on a motion for the concurrence in a report from a standing, standing joint or special committee is adjourned or interrupted, the debate shall again be considered on a day designated by the government, after consultation with the House Leaders of the other parties, but in any case not later than the 31st sitting day after the interruption; and

(n) Members not seeking re-election to the 43rd Parliament may be permitted to make statements, on Tuesday, June 4, and Wednesday, June 5, 2019, at the expiry of the time provided for Private Members’ Business for not more than three hours, and that, for the duration of the statements, (i) no member shall speak for longer than ten minutes and the speeches not be subject to a question and comment period, (ii) after three hours or when no Member rises to speak, whichever comes first, the House shall return to Government Orders.

Mr. Speaker, I rise today to speak to Motion No. 30, which allows for the extension of the sitting hours of the House until we rise for the summer adjournment.

I rise today to speak to Motion No. 30. This motion would allow for the extension of sitting hours of the House until we rise for the summer adjournment. There is a clear and recent precedent for this extension of hours to give the House more time to do its important work. It occurred last year at this time and also the year before that. As well, in the previous Parliament, the hours of the House were extended in June 2014.

Four years ago, our government came forward with an ambitious mandate that promised real change. Under the leadership of our Prime Minister, our government has introduced legislation that has improved the lives of Canadians from coast to coast to coast. However, we have more work to do.

So far in this Parliament, the House has passed 82 government bills, and 65 of those have received royal assent. The facts are clear. This Parliament has been productive. We have a strong record of accomplishment. It is a long list, so I will cite just a few of our accomplishments.

Bill C-2 made good on our promise to lower taxes on middle-class Canadians by increasing taxes on the wealthiest 1% of Canadians. There are nine million Canadians who have benefited from this middle-class tax cut. This tax cut has been good for Canadians and their families. It has been good for the economy and good for Canada, and its results have been better than advertised. On our side, we are proud of this legislation. We have always said that we were on the side of hard-working, middle-class Canadians, and this legislation is proof of exactly that.

As well, thanks to our budgetary legislation, low-income families with children are better off today. We introduced the biggest social policy innovation in more than a generation through the creation of the tax-free Canada child benefit. The CCB puts cash into the pockets of nine out of 10 families and has lifted nearly 300,000 Canadian children out of poverty.

Early in this Parliament, in response to the Supreme Court of Canada, we passed medical assistance in dying legislation, which carefully balanced the rights of those seeking medical assistance in dying while ensuring protection of the most vulnerable in our society.

Also of note, we repealed the previous government's law that allowed citizenship to be revoked from dual citizens. We also restored the rights of Canadians abroad to vote in Canadian elections.

We added gender identity as a prohibited ground for discrimination under the Canadian Human Rights Act. Also, passing Bill C-65 has helped make workplaces in federally regulated industries and on Parliament Hill free from harassment and sexual violence.

We promised to give the Office of the Parliamentary Budget Officer the powers, resources and independence to properly do its job. We delivered on that commitment through legislation, and the PBO now rigorously examines the country's finances in an independent and non-partisan manner.

Through Bill C-45, we ended the failed approach to cannabis by legalizing it and strictly regulating and restricting access to cannabis, as part of our plan to keep cannabis out of the hands of youth and profits out of the pockets of organized crime. Along with that, Bill C-46 has strengthened laws to deter and punish people who drive while impaired, both from alcohol and/or drugs.

These are just some examples of the work we have accomplished on behalf of Canadians.

We are now heading into the final weeks of this session of Parliament, and there is more work to do. Four years ago, Canadians sent us here with a responsibility to work hard on their behalf, to discuss important matters of public policy, to debate legislation and to vote on that legislation.

The motion to allow for the extension of sitting hours of the House is timely, and clearly it is necessary. We have an important legislative agenda before us, and we are determined to work hard to make even more progress.

Passage of this motion would give all members exactly what they often ask for: more time for debate. I know every member wants to deliver for their communities and this motion will help with exactly that. We have much to accomplish in the coming weeks and we have the opportunity to add time to get more done.

I would like to highlight a few of the bills that our government will seek to advance.

I will start with Bill C-97, which would implement budget 2017. This budget implementation act is about making sure that all Canadians feel the benefits of a growing economy. That means helping more Canadians find an affordable home, and get training so that they have the skills necessary to obtain good, well-paying jobs. It is also about making it easier for seniors to retire with confidence.

Another important bill is Bill C-92, which would affirm and recognize the rights of first nations, Inuit and Métis children and families. The bill would require all providers of indigenous child and family services to adhere to certain principles, namely the best interests of the child, family unity and cultural continuity. This co-drafted legislation would transfer the jurisdiction of child and family services delivery to indigenous communities. This is historic legislation that is long overdue.

We have another important opportunity for us as parliamentarians, which is to pass Bill C-93, the act that deals with pardons as they relate to simple possession of cannabis. As I mentioned, last year we upheld our commitment to legalize, strictly regulate and restrict access to cannabis. It is time to give people who were convicted of simple possession a straightforward way to clear their names. We know it is mostly young people from the poorest of communities who have been targeted and hence are being left behind. This bill would create an expedited pardon process, with no application fee or waiting period, for people convicted only of simple possession of cannabis. Canadians who have held criminal records in the past for simple possession of cannabis should be able to meaningfully participate in their communities, get good and stable jobs and become the contributing members of our society that they endeavour to be.

Meanwhile, there is another important bill before the House that we believe needs progress. Bill C-88 is an act to amend the Mackenzie Valley Resource Management Act and the Canada Petroleum Resources Act. This legislation only impacts the Northwest Territories, and its territorial government is asking us to act. This legislation protects Canada's natural environment, respects the rights of indigenous people and supports a strong natural resources sector. This bill will move the country ahead with a process that promotes reconciliation with indigenous peoples and creates certainty for investments in the Mackenzie Valley and the Arctic.

Earlier this month, our government introduced Bill C-98, an act to amend the Royal Canadian Mounted Police Act and the Canada Border Services Agency Act. This bill would create civilian oversight of the Canada Border Services Agency. It would provide citizens with an independent review body to address complaints about the CBSA, just as they now have complaint mechanisms in place for the RCMP. Let me remind members that it was our government that brought forward Bill C-22 that established the national security intelligence committee of parliamentarians, which has tabled its first annual report to Parliament. We are committed to ensuring that our country's border services are worthy of the trust of Canadians, and Bill C-98 is a significant step towards strengthening that accountability.

We have taken a new approach. We, as a government, have consulted with Canadians when it comes to our legislation. We have seen committees call witnesses and suggest amendments that often times improve legislation, and we, as a government, have accepted those changes. We were able to accomplish this work because we gave the committees more resources and we encouraged Liberal members to do their work.

Likewise, currently there are two bills that have returned to the House with amendments from the Senate. I look forward to members turning their attention to these bills as well. One of those bills is Bill C-81, an act to ensure a barrier-free Canada. Our goal is to make accessibility both a reality and a priority across federal jurisdictions so that all people, regardless of their abilities or disabilities, can participate and be included in society as contributing members. Bill C-81 would help us to reach that goal by taking a proactive approach to getting ahead of systemic discrimination. The purpose of this bill is to make Canada barrier free, starting in areas under federal jurisdiction. This bill, if passed by Parliament, will represent the most significant legislation for the rights of persons with disabilities in over 30 years, and for once it will focus on their abilities.

The other bill we have received from the Senate is Bill C-58, which would make the first significant reforms to the Access to Information Act since it was enacted in 1982. With this bill, our government is raising the bar on openness and transparency by revitalizing access to information. The bill would give more power to the Information Commissioner and would provide for proactive disclosure of information.

There are also a number of other bills before the Senate. We have respect for the upper chamber. It is becoming less partisan thanks to the changes our Prime Minister has made to the appointment process, and we respect the work that senators do in reviewing legislation as a complementary chamber.

Already the Senate has proposed amendments to many bills, and the House has in many instances agreed with many of those changes. As we look toward the final few weeks, it is wise to give the House greater flexibility, and that is exactly why supporting this motion makes sense. This extension motion will help to provide the House with the time it needs to consider these matters.

There are now just 20 days left in the parliamentary calendar before the summer adjournment, and I would like to thank all MPs and their teams for their contributions to the House over the past four years. Members in the House have advanced legislation that has had a greater impact for the betterment of Canadians. That is why over 800,000 Canadians are better off today than they were three years ago when we took office.

We saw that with the lowering of the small business tax rate to 9%, small businesses have been able to grow through innovation and trade. We see that Canadians have created over one million jobs, the majority of which are full-time, good-paying jobs that Canadians deserve. These are jobs that were created by Canadians for Canadians.

That is why I would also like to stress that while it is necessary for us to have honest and vibrant deliberations on the motion, Canadians are looking for us all to work collaboratively and constructively in their best interests. That is exactly why extending the hours will provide the opportunity for more members to be part of the debates that represent the voices of their constituents in this place, so that we continue to advance good legislation that benefits even more Canadians.

It has been great to do the work that we have been doing, but we look forward to doing even more.

Royal Canadian Mounted Police Act

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

Mr. Speaker, I was listening to members in the unholy alliance of the New Democratic Party and the Conservative Party asking why the government did not bring in this legislation earlier. The first thing that came to my mind is that we have had a very busy government, as the parliamentary secretary indicated, from day one when we brought in Bill C-2 dealing with the tax cut for Canada's middle class. However, no matter what piece of legislation this government brings in, the opposition always believes it has to talk more about it. The difference between the Liberal government and the opposition, the combined opposition, is that we actually believe in working, and there are still 20 days left.

My question to my colleague is: Would she not agree that 20 days still allow us to continue to work hard, as we have done from day one, on an important piece of legislation? Just because there are only 20 days does not mean that everyone gets a break. We work to the end. Would the parliamentary secretary not agree?

Canada–Madagascar Tax Convention Implementation Act, 2018

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

Madam Speaker, I have listened to the debate on Bill S-6 this morning and I must say there are plenty of things that one can draw upon in order to shed more light and to be a bit more forthright with respect to the bill.

The Government of Canada and the Liberal Party of Canada recognize the important role that trade plays in the development of our nation. Having observed the NDP for many years now, it is my experience that as a general rule that party does not support trade agreements.

There have been dozens of trade agreements. On one occasion, the vote was not a recorded vote, so NDP members claimed not to have voted against the bill. They might have voted in favour of one other bill. A couple of MPs have indicated they have voted in favour of trade, but as a general rule the NDP does not support trade agreements between Canada and other countries, and that is somewhat unfortunate.

Bill S-6 is about a tax treaty with Madagascar. Madagascar has wonderful opportunities for Canadians, and individuals from that country have opportunities here in Canada. We have many tax treaties with countries around the world, and tax treaties provide significant benefits to both countries.

That is why it is with pleasure that I rise today to address this legislation and to add my comments on a wide variety of issues, all stemming from our economy, social justice and the tax laws that we currently have. I have a fairly wide spectrum to work from based on the debate I have heard so far today. Let me attempt to do it in the best way I can.

The number that comes to my mind, which ultimately demonstrates what this government has been able to accomplish by working with Canadians, is one million, and that is a fairly recent number that has come out relating to employment.

It is worth mentioning that since we took office in October 2015, we have seen the generation of over one million new jobs. That is historic, in the sense of the last 40 or 50 years. It is an incredible number of jobs, and it is due in good part to the policies that this government has put in place, budgetary measures and legislative measures, all with the idea of supporting Canada's middle class and those aspiring to be a part of it.

Day after day, for weeks, months and years, our government has taken Canada's middle class seriously. We have developed progressive measures to assist middle-class Canadians, bringing forward policies that will support them, policies such as the Canada child benefit program and the guaranteed income supplement for our seniors, which have added great value to our economy.

We hear a lot about taxation. People expect to pay their fair share. From day one, our government has taken this very seriously.

Members will recall that during the last election, today's Prime Minister made a commitment to Canadians that there would be a tax cut for the middle class. If members look at Bill C-2, which was our first piece of legislation, they will see that we delivered on that tax cut, which put hundreds of millions of dollars into the pockets of Canadians. I would argue that the money going into the pockets of Canadians enabled them to increase their disposable income, allowing them to spend more into the economy, and it is one of the reasons for the one million-plus jobs that have been generated. Working with Canadians, investing in Canadians, allowing Canadians to have more disposable income has allowed Canada's economy to perform that much better.

Taxation policy matters. The NDP and the most recent speaker talked about tax fairness and said that the rich need to pay more. That was an important part of the very first budget we brought forward, in which Canada's wealthiest 1% had to pay more. The millions raised through that one initiative supported giving Canada's middle class a tax break. The issue of tax fairness, much like the tax break, has been of the utmost importance to this government. It was one of the very first actions taken when we assumed office in 2015, recognizing some of the comments made today, whether it was the NDP talking about tax fairness or the Conservatives talking about the tax on Canada's middle class.

When the member for Calgary Shepard asked who benefits from the tax break that we gave to the middle class and then said it is members of Parliament who benefit, I think of the tens of thousands of teachers, the tens of thousands of nurses, the tens of thousands of factory workers or the tens of thousands of people who work for our financial institutions. Those individuals also benefited from that tax break.

I indicated that when I had the opportunity, I would put some facts on the record, and there is no disputing what I have said, because it is all factually correct. The government has consistently gone out of its way to develop policy through legislation and budgetary measures that has had a positive impact on Canada's middle class.

The tax treaty that we are debating today is all about international relationships and ways for these treaties to further advance Canadian interests. This is not the only tax treaty legislation that we have put forward in the last three years. Bill S-4 also dealt with tax treaties. It is not the first time we have had to deal with tax treaties, because we understand and appreciate the true value of having these types of treaties with countries. It allows us to have a better sense of taxes flowing, both here in Canada and in the country in question. It provides additional security, if I can put it that way, for investments flowing to countries with which we have tax treaties.

We recognize, as we do on the broader picture, trade and international relations. No government in recent history has done more with respect to trade agreements than this government. The previous government likes to say that it had 30-plus trade agreements, but that is just not true. Through this administration, we have been able to sign more trade agreements than any other government in the last 40 to 50 years. Since trade agreements have been tied into tax agreements or tax treaties, I would challenge any member in the House to list a government that has been able to accomplish so much in such a short period of time on that file.

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

Madam Speaker, there are many things that the member opposite has put on the record that I hope to be able to respond to when I have the opportunity to speak to the legislation.

The member, maybe through a guilty conscience, seems to have some remorse or regret in terms of voting against Bill C-2. Bill C-2 gave millions of Canadians a tax cut. The member opposite perhaps tried to justify his vote by saying that MPs were the beneficiaries of this tax cut. To try to sum it up in that fashion does a disservice to Canada's middle class.

When I think of Canada's middle class, I often think of our teachers, our nurses, our individual factory workers and those people who are working in financial institutions, all of whom are a part of Canada's growing middle class and all of whom were given a substantial tax decrease. Can the member explain to those individuals why he and the Conservative Party voted against that portion of our middle class?

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before resuming debate, I will again remind the hon. members, on all sides, that the bill at hand today is Bill S-6, not Bill C-2.

The hon. member for Central—Okanagan—Similkameen—Nicola.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the member badly mischaracterizes Bill C-2. I am happy to remind him that Bill C-2 was in fact an omnibus measure that had multiple different elements to it. I proudly voted against it because it reduced the amount Canadians could put into tax-free savings accounts. The government attacked middle-income Canadians by reducing the amount they could save.

My friends across the way have clearly not looked at the data about who uses tax-free savings accounts. Tax-free savings accounts are demonstrably the preferred savings vehicle for middle-income Canadians, not the ultra rich, because of their tax treatment relative to RRSPs. Generally, for middle-income Canadians, TFSAs have relatively more advantageous tax implications compared to RRSPs. That is why those who open them and put money into them tend to disproportionately be middle-income Canadians.

The government's fundamental opposition and attack on the tax-free savings account was worth voting against. I will vote against the government's tax increases every step of the way.

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

Mr. Speaker, it is interesting, to say the very least, to hear the comments from my colleague across the way. At times there needs to be a reality check.

The Conservatives like to talk as if they are the ones who give the tax breaks. The reality is that Bill C-2 has defied everything the Conservatives have tried to convince Canadians they do. Bill C-2 created a tax cut for Canada's middle class. That member and his caucus voted against that tax cut. They can say whatever they want, but they voted against hundreds of millions of dollars going into the pockets of Canadians. That is true. That is a fact. Look it up in Hansard. Look it up in the votes. There is no denying reality.

My question is related to this bill. We have talked about tax avoidance. We have invested hundreds of millions of dollars in two budgets to deal with the issue of international and national tax avoidance. That investment is making a huge difference. Again, the Conservative Party voted against the budget that went after tax evasion and tax avoidance.

Maybe the member can answer that as the second part of the first question regarding how he will explain to his constituents that the Conservative Party voted against tax breaks to Canada's middle class.

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

Mr. Speaker, in a question earlier, my friend across the way was talking about the issue of taxation. For me, I guess the proof is in the pudding. One of the very first things this government did, which I believe was in Bill C-2, was to give Canada's middle class a tax break, literally putting hundreds of millions of dollars in the pockets of Canada's middle class. That very member and the Conservative opposition voted against that measure.

Now, it is not the first time Conservatives voted against a measure of this nature. In the debate so far, the bill has often been referred to as a bill dealing with tax avoidance. When the government invested hundreds of millions of dollars, close to a billion dollars, to marginalize tax avoidance, again this member and the Conservative Party voted against it. This is money going into the pockets of Canadians.

The member can cite whatever he wants to cite. However, when it comes time to vote on the issue, can he explain why the Conservatives continuously vote against Canada's middle class?

Criminal Code

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, from day one, this government has been introducing legislation. I believe the first piece of legislation was Bill C-2, which gave the tax break to Canada's middle class. From that day to this day, this government has been very diligent in trying to pass legislation in as orderly a fashion as possible. At times we have had support from the NDP to use time allocation. The NDP on occasion has recognized the odd piece of legislation it prioritized. The idea of using time allocation has been recognized by all parties in this chamber. It is just that we have different priorities.

The government's priorities are to fulfill the commitments it made to Canadians in the last election as much as possible, and a good number of those commitments have to be done in the form of legislation. It might not meet the timing of my New Democratic friends, but this has been a very busy government on a number of fronts.

The justice file has been an important priority for this government. That is one of the reasons there are a number of legislative items in different stages. If the member wants to see them pass, it should make a suggestion. I would definitely recommend to the government that it accept unanimous consent to have this bill and other pieces of legislation passed right now. If the NDP has identified legislation it wants passed, I will be pleased to advocate on the NDP's behalf that we allow for the unanimous passage of government legislation. I do not know if the Conservatives will agree. We might have to lobby them together.

Opposition Motion—Finance Minister's assets

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I will give leave to have more questions. I am more than happy to answer them.

It is in the members' speaking notes to give false information, even the member across the way who just finished heckling. That is the reality. They have no qualms doing it. They will say that no one knew about it. I have news about that house in France. Not only did the commissioner know about it, it was actually reported in a newspaper a week after the last federal election. There was no hiding when it was published in one of Canada's newspapers. Maybe they can revisit that factoid when they make their presentations today.

What needs to be emphasized is that each and every member of Parliament has an obligation to go before the commissioner and declare his or her assets, and that is exactly what the Minister of Finance has done. I would suggest that Canadians, as opposed to listening to the opposition benches and the grossly exaggerated claims at times, allow the independent office to do its job. It was good enough for Stephen Harper. These are the very same rules there were under the former prime minister. We did not see any Conservatives back then jumping up and saying to change the rules.

The reason they are talking about it today is that they are trying to change the focus from what is happening today in the real world. We have a joint opposition continuously going after the Minister of Finance. Their focus is the Minister of Finance. That is fine. They can continue focusing on the Minister of Finance. This Prime Minister and this government are going to be focused on Canadians and the constituents we represent, even those we do not represent, because we appreciate what is important to Canadians. It is critically important that we look at ways we can improve the quality of life. We often talk about Canada's middle class and those aspiring to be part of it, because this government genuinely believes in Canada's middle class and has many initiatives that have been led by the Minister of Finance.

It is character assassination that has taken place against the Minister of Finance. Some of the members shake their heads and say that is not the case. When we hear individuals across the way trying to imply that the Minister of Finance became a member of Parliament because he wanted to enhance his financial fortunes, that is absolute rubbish. I am disappointed in any member in this House who tries to impute motives to other members who come to this House wanting to improve the society and the communities in which we live. The Minister of Finance is no different. The Minister of Finance is very passionate in wanting to invoke changes for the betterment of Canadians. Each and every one of us should know better than to make allegations.

We just had a speaker who talked about duty and honour. I suggest that we have a Minister of Finance who is committed to that duty and honour. I would challenge any member across the way to inform me as to when any other minister of finance has been so successful in the redistribution of Canada's wealth and in trying to make a difference to income inequality.

One of the first initiatives this government undertook, headed by the Minister of Finance, was when we decided that there was going to be a tax increase for the one per cent of Canada's wealthiest. What did the joint opposition do? New Democrats and Conservatives were more than happy to be critical of the Minister of Finance. They even voted against that special tax on Canada's wealthiest.

Another initiative, which I believe was under Bill C-2 and incorporated into the budget, was the tax break for Canada's middle class to put hundreds of millions of dollars into the pockets of Canada's middle class. Once again, we saw the NDP working with the Conservatives in opposing it. People should read some of the speeches by the members across the way criticizing the Minister of Finance or that policy, just like they are being critical in the motion we have today. They actually voted against that initiative.

Imagine the hundreds of millions of dollars that went into taxpayers' pockets. The NDP was very critical of the Minister of Finance back then and asking about the working poor or those individuals who needed more. What did the Liberal government do then? We brought in, as a government, the increase to the Canada child benefit program. We changed it so that millionaires would no longer be receiving that particular benefit. Hundreds of millions of dollars were being put into a program and literally lifting thousands of children out of poverty. What did the NDP do? It did the same thing the Conservatives did and voted against that initiative.

It does not seem to matter what the Minister of Finance is doing; they are critical of the Minister of Finance. That is what they are doing again today. In fact, I think this is the second day we have had a motion of this nature.

One of the initiatives the Minister of Finance brought in that I was exceptionally proud of, Winnipeg North as well as other constituencies across our country—

Budget Implementation Act, 2017, No. 2

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

Mr. Speaker, it is always a pleasure and privilege to be able to rise to speak inside in this beautiful chamber.

Today, being November 6, is a very special day worth noting. We had four prime ministers sitting in the gallery. We had speeches by the Prime Minister, the Leader of the Opposition, the NDP representative, and the leader of the Green Party. They stood and recognized just how fortunate we parliamentarians are to be here, representing the interests and the will of Canadians in every region of this beautiful nation.

I want to start my comments by reflecting on how much I truly and genuinely appreciate representing the residents of Winnipeg North and the confidence they have expressed in me over the years. Having said that, let me get into the debate that is currently under way.

I have had an opportunity to ask a number of questions today and on a previous day when we listened to many opposition members speak about the budget. I want to reflect on some of those things I have been listening to. The most telling statements from the Conservative benches seem to focus on the deficit, which I have attempted to address by talking about how that deficit is not as bad as they try to portray it.

I asked one of my colleagues across the way if he could explain how Stephen Harper had turned a multi-billion dollar surplus he inherited as prime minister into a multi-billion deficit even before a recession got under way. At the end of the day, he continued to have deficit after deficit, accumulating more real dollars in overall debt as a direct result, in all likelihood more than most any prime minister.

I also asked my colleague why we in government should be taking advice from the Conservatives based on their historical perspective. The answer was interesting. He said, “Look at what we Conservatives did while we were in government”. My colleague talked about the debt-to-GDP ratio, as if that would excuse what the Conservatives did in terms of the size of the debt. Personally, however, I thought it was a good answer. The member has something there. The fact is the debt-to-GDP ratio is something that needs to be taken into consideration. It is something the government talks about. We have a very successful debt-to-GDP ratio that continues to go down. That is very healthy for our country.

In one sense, the Conservative member, unwittingly no doubt, conceded that the real issue is the debt-to-GDP ratio. On that account, the government is doing exceptionally well, especially compared to other industrialized nations, in particular in Europe, including the United Kingdom, and other countries like the United States and Australia. In comparison, Canada is doing exceptionally well.

If we are looking at results, there is a long list of things the government has accomplished in just two years. I will reflect on a number of those. At the end of the day, we have seen an economy that is envied around the world for what we have been able to accomplish. It is significant. There are over 450,000 new jobs. How does that compare to the former Stephen Harper government? In 10 years under that government, there were just over a million jobs; in just two years under ours, there are 450,000 jobs and counting. I would argue that the economic policy of this government is working. We are seeing significant signs.

One of my friends across the way talked about focus and asked why this government was not focused. I indicated that we are in fact focused, indeed very focused, on Canada's middle class and those aspiring to be a part of it. However, it goes even beyond that. Listening the last week or so to the opposition benches, and to be fair to the Conservatives, they are not alone, the longer we are in government the closer the NDP and Conservatives want to be. They want to focus on the negative as much as possible. They want to engage in character assassinations in the House, but we will continue to remain focused on what is important to Canadians. That is something this Prime Minister and our caucus are committed to doing, because we were given a specific instruction by our Prime Minister long ago to work with our constituents. Our responsibility is to bring their ideas to the House of Commons and what they have to say, as opposed to bringing Ottawa to our constituents. It is materializing in a very real, tangible way.

If we look at the last couple of budgets or initiatives this government has entered into, we get a better understanding why the economy, relative to any other country in the world, is doing as well as it is. We recognize that a healthy economy means investing in Canada's middle class. It is the middle class and those striving to be a part of it that drive the economy. That is how to create jobs: having confidence in the middle class.

I talked about the legislation, I believe it was Bill C-2, that set in place some of the things that enabled us to have that tax cut for Canada's middle class. We literally puts hundreds of millions of dollars, going into the billions of dollars, into tax cuts for Canada's middle class. Those tax cuts were in good part covered by the special tax increase on Canada's wealthiest 1%. We made great enhancements to the Canada child benefit, investing hundreds of millions of dollars in the children of our country, and lifting tens of thousands of them out of poverty. We saw the same thing done with our guaranteed income supplement, which again resulted in tens of thousands of seniors being lifted out of poverty. We are increasing the disposable income of Canadian, and by doing that we are seeing them invest that income in our economy. Finally, after seeing 10 years of very little, we see a government that is investing in our infrastructure in a very real and tangible way. Not only does it create jobs for today, it creates opportunities into the future.

On that particular note, we can talk about the agreements that have been achieved to invest in Canadians' future.

Opposition Motion—Minister of Finance and Conflict of Interest Act

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

Mr. Speaker, I was fortunate to have the opportunity just before question period to share some thoughts on the calling into question a number of issues with respect to the Minister of Finance, whether it is the motion before us today or the official opposition motion bought forward last week. Today, I would like to provide a different insight.

I was on the opposition benches, both in Ottawa and in my home province of Manitoba, for just over 20 years. I understand the role of opposition. We want to be constructive in our criticism and in opposition we are more inclined to look at where the government could improve itself in policies and so forth. I would argue that the opposition day motion today goes far beyond that for a couple of reasons.

Each and every one of us, including you, Mr. Speaker, will recall that when we were elected to this beautiful chamber, representing literally thousands of Canadians, there was a responsibility for us to establish communication with the commissioner's office. Forms need to be filled out and declarations were made to the commissioner. We also look for advice on what we need to do to follow the law, to be in sync with our obligations and to disclose our investments. I have done it to the very best of my ability. I do not have much, but I do have some.

I fulfilled my obligation to the best of my ability, as I know the Minister of Finance has done, as have members in the opposition. It is important to recognize that Mary Dawson and her office do not only handle cabinet. They are responsible for each and every member of the House of Commons. I suspect we will likely find there are ongoing investigations of some sort, or questions being posed by the commissioner's office to opposition members as well as government members.

When that contact is made and a member gets a recommendation from the commissioner, there is an expectation the member will follow the advice and recommendations of the commissioner. After all, that is the law. It is the very same law Stephen Harper had in place. When Stephen Harper was prime minister of Canada, his cabinet followed the very same process that this government's cabinet has followed. It is not only the government members. Even back then, it included opposition member as well, including me. We all had to follow the law.

From what I understand, the commissioner's office, directly or indirectly, has met with all 338 current members. There is a reason we have that. It is because at times it gets so politically charged in the House that it is somewhat hard for the opposition, and periodically even the government benches, to not be overly biased.

In my two years on the government side, time after time opposition members have united against the Minister of Finance. Virtually from day one, from Bill C-2, to budgets, to all forms of announcements, they have attacked the Government of Canada through the Minister of Finance, as well as the Liberal caucus as a whole.

I do not know if it was Winston Churchill who commented that Parliament and democracy were quite messy at times. Some have said it is a blood sport. Churchill went on to say something to the effect that it is still the best system in the world. I believe that to be the case, that we do have a fantastic system, the parliamentary process. However, there are certain aspects of the parliamentary process that we want to be truly independent. We have established officers of Parliament to ensure that independence.

One of those is Elections Canada itself. All Canadians are aware of Elections Canada and its fine work for all of us. That institution is known throughout the world for contributing so much to the well-being of democracy, not only here in Canada but outside of our borders. It has an independent officer of the Parliament of Canada. The commissioner is independent as well. We have an Ethics Commissioner who is independent, meaning that he or she should not be influenced by the government of the day, the Conservative Party or the New Democrats. That is the way it should be.

That is why it is really important that throughout this debate Canadians understand no violation has taken place by the Minister of Finance, despite the many assertions being made by the members opposite. The minister himself has made it very clear that to appease the concerns that are out there, he is prepared to divest himself of his personal finances in certain areas and to put other things into a blind trust. He sought the advice and recommendations of the Ethics Commissioner, and has followed that advice, as well as any recommendations provided to him. Moreover, he has seen fit to go over and above that in order to establish the right perception, which is important, because he wants to ensure that we can move on in the best way we can to what this government has said is its first priority since day one in office.

From a media outlet I found an interesting clip with respect to the member for Skeena—Bulkley Valley, the person who introduced today's motion. From what I understand, the member across the way, the person who has now decided to attack the Minister of Finance, is reported to have said that if there's a silver lining in this controversy, it is that it might push the government to close loopholes in the Conflict of Interest Act. With that sort of a comment, even the NDP recognize there is nothing illegal taking place and that the Minister of Finance has done virtually the same thing that every member of the House is obligated to do. The member is suggesting that maybe we should be changing the Conflict of Interest Act. I would much prefer to have that sort of a discussion, rather than the character assassination that we have been witnessing by both the NDP and the Conservatives and, I would ultimately argue, the undermining of the independent office of the commissioner. That is what I have been witnessing from both opposition parties. I say that because whenever the Conservatives or the NDP have any hint of an opportunity to be critical of this Minister of Finance, they have jumped all over it every time.

If we ask ourselves what the Government of Canada's priorities are, there is a litany of things that we have done to reinforce how important Canada's middle class is and those aspiring to be a part of it.

The Conservatives are so out of touch with what Canadians want and the NDP seem to so want to buy into the Conservative spin and the issues of the day that they vote together. Their opposition motions are now following each other's. I would suggest they are going in the wrong direction. One of the things that Conservatives have demonstrated over the last two years is that they continue to be out of touch with what Canadians really and truly want and expect of government. Instead, as I say, every opportunity they get, they are critical of the Minister of Finance.

I would like to go through some examples, and then argue, using these examples, that we have a joint opposition that is out of tune with what is important in the everyday lives of Canadians. We can start from day one of the government. Our Prime Minister who made a commitment to Canada's middle class that we were going to put Canadians as the number one priority. I believe it was Bill C-2 that provided a tax cut for Canada's middle class. It was incorporated into the budget bill.

There was a great debate on that first budget. If members followed the debate at that time, we had Conservative after New Democrat stand in their place, being nothing but critical of the Minister of Finance. The Conservative and New Democrat members criticized the government for giving a tax break to Canada's middle class, the most significant tax break in generations focused on the middle class, while at the same time increasing the taxation of Canada's wealthiest 1%. That is not an attack on the 1%, but rather it is saying that Canadians, including the constituents I represent, want a sense of fairness in taxation policy. In that very first budget, Canadians got to see a significant redistribution of wealth and responsibility in taxation. It was a fairer reflection of what it is that Canadians wanted to see. That is one of the reasons we got the mandate that we did.

Let us look at what happened immediately following that. Whether it was a Conservative member of Parliament or a New Democrat member of Parliament, they jumped all over it and criticized the government. In fact, all members need to do is read the Hansard. The difference between the two did not matter, because it was hard to tell the parties apart at times they were so close together. We saw both parties voting against the tax break for Canada's middle class. They voted against the tax on Canada's wealthiest 1%.

There were other initiatives in the budget that tried to deal with the economic conditions of Canadians. An example of that would be the Canada child benefit program. No surprise, because once again both parties voted against it.

The Minister of Finance brings forward something and we have the joint opposition being critical of the minister. On that particular point, I must say that it was the budget that ultimately ended millionaires' ability to receive the Canada child benefit, and gave more money to those individuals who had less. It literally lifted thousands of children out of poverty. I wonder if their criticisms were of the merits of the bill or if they had something personal against the Minister of Finance.

What about the guaranteed income supplement program? It is the same principle at play. What did the opposition parties do? We have to conclude that they just do not support the Minister of Finance, because when he made that change they were critical of the minister. It is hard to believe they voted against an initiative that would lift thousands of seniors out of poverty in every region of Canada.

The Minister of Finance is the one who leads the way. Let us go to the summer. Last summer, the Minister of Finance went out to all the regions. We had members of Parliament charged with the responsibility of listening to what their constituents had to say and report back. I am proud to say that Liberal members of Parliament did just that. From the initial announcement to the opening of consultations with Canadians, we saw tangible results from Liberal members of Parliament. They went into their constituencies and worked hard and effectively to improve and bring forward a fantastic tax change program that would make the system fairer. Once again we have the Conservative and NDP members screaming at the Minister of Finance whenever they have the opportunity to do so.

I see that I only have a few seconds left, so let me suggest to those who are following this debate that the Conservatives and NDP members have clearly demonstrated that they do not like the Minister of Finance. I can tell everyone that the advice of the independent office of the Ethics Commissioner is what the Minister of Finance is following, and he has made a commitment to continue to follow any such advice and recommendations by that office. He has even gone further, as shown by some of his personal actions.

Concurrence in Vote 1—Privy Council Office

[John Nater, Conservative, Perth—Wellington, ON]

Madam Speaker, it is an honour to rise this evening to debate the estimates process and the main estimates. Too often Canadians probably have their eyes glaze over, and I am sure some parliamentarians' eyes glaze over when we talk about the estimates.

The estimates are the foundational role that Parliament plays in this place. The business of supply or withholding supply is a fundamental purpose of this place, one that dates back many generations before the House was established to our forbearer in the United Kingdom. It was at Runnymeade in 1215 with the great Magna Carta that the power of the purse, and the supremacy of Parliament in the business of the supply process were fundamentally established.

Fundamentally speaking, the government ought not and should not spend a dime of taxpayers' money without the approval of this place, yet time and time again, we see the Liberal government abusing the very supply process which we are debating tonight.

In fact, just a couple of nights ago we were in this place debating the Salaries Act, a standalone piece of legislation to give pay raises to certain Liberal ministers. When the Prime Minister tried to establish a gender equal cabinet, he forgot he was giving his female junior ministers a lower salary than their male colleagues, so he decided to introduce the Salaries Act. It was a conscious decision by the government to introduce a piece of legislation to increase the wages of certain ministers, certainly something that is well within the right of the government to do.

The Liberals forgot something. They forgot that this piece of legislation has not yet been passed by the House. It has not been passed by the other place either. Instead of passing the legislation, the Liberals decided to abuse the supply and estimates process. It did not go unnoticed by members of this place or the other place.

The Senate Committee on National Finance reported, in its 13th report in March 2017, its grave concern of the abuse by the Liberal government of the estimates process. The report stated, “Senators and Treasury Board officials also discussed the larger issues of parliamentary authorities and approval, and the proper usage of the supply process.”

The report went on to say:

However, the Supplementary Estimates are not intended to be a convenient mechanism for the temporary funding of needs that were foreseeable and could have been planned, particularly in the case where such needs have their own source of authority in an Act of Parliament. The Salaries Act for ministers, like the Parliament of Canada Act for MPs and Senators, authorizes the payment of ministers’ salaries out of the Consolidated Revenue Fund and also fixes the amounts of those salaries.

In direct notice in speaking to the government of the day, the committee stated:

Our committee is concerned about the recurrent practice of using supplementary estimates to pay certain ministers' salaries prior to the enactment of amendments to the Salaries Act, and raises this question in the context of Bill C-24.

The member from Halifax was just talking about the new independent senators in the other place. This report included independent senators, members of the other place, who expressed grave concerns about the abuse of the estimates process. We are seeing this tonight as we debate the main estimates. Rather, they encourage the Liberal government to fundamentally follow the rules of this place and the other place.

Citing Debates of March 25, 1981, the other place recommends, “A supply item ought not to be used to obtain authority which is the subject of legislation.” However, in at least two occasions, we have had estimates come through the House using the estimates process in place of a piece of legislation.

It cites paragraph 937, “The government may not use an appropriation act to obtain authority it does not have under existing legislation.” It goes on to cite Beauschene's Parliamentary Rules and Forms of the House of Commons of Canada, which cites those statements. Of course, we are all big fans of Beauchesne's sixth edition in this House. Particularly around this side of the House, we are very proud of the great insight we have from Beauchesne's co-editor, Mr. John Holtby, a distinguished member of our team who is always providing us with great insight into the rules of this place. Certainly, the estimates is one of those issues.

Therefore, we have a process, and it is one that has unfortunately been abused on these issues by the government across the way. Too often, the members on the other side forget that, in fact, they are not members of the government; that only members of the cabinet serve as members of the government. Each and every Liberal MP who does not serve in the government is a member of Parliament first. Those members may sit as Liberal MPs, but they are not members of the government. Fundamentally, we need to remember in this place that we are members of Parliament first, and it is our duty to this place to properly undertake the review of the estimates process.

When I was reading through the estimates process, I was intrigued by some of the issues that are being recommended and encouraged. I happened to turn to page 228 of the main estimates, dealing with PPP Canada, Public–Private Partnership Canada. It is intriguing that in 2015-2016, there was no money spent for investments; again in 2016-2017 there was $267,700,000 allocated; and again in this current main estimates $267,700,000. Is the government planning to go forward continuing to fund PPP Canada? We do not know.

In fact, we do not even know what is going to happen to the infrastructure bank. As we speak in this place, the other place is debating the infrastructure bank. Indeed, the government could have used the provisions through PPP Canada where it has money, where, tonight, we will be voting on $267 million for PPP Canada. We could get that money out the door, enhance public–private partnerships, and reduce the risk on the taxpayer. That money is in the main estimates, and yet, in the other place, they are debating splitting it out. Indeed, just hours ago, the hon. Joseph Day, the leader of the Liberal caucus in the Senate, gave an impassioned speech in the other place about this very issue.

I want to quote from the blues: “The analogy that occurred to me as I read the bill is that Bill C-44 is like one of those Ukrainian dolls. You open up the first doll and there is another doll inside it, and you open up the second doll and there is another doll, and you keep going and peeling off the onion skins. As you open one, another one is revealed underneath and under that another and another and another. But while that may be fun as a doll, it is absolutely no way to present legislation for proper study.”

That is coming from a Liberal senator. I know the member from Halifax was just speaking about what he called the improved Senate, the improved process. This is one of the Liberal senators who is concerned about this. Of course, another issue that we see coming forward is the issue of an automatic escalator in taxation. In the other place, again, Senator Joseph Day, the leader of the Senate Liberals, said:

The “effectiveness” of the taxes. How much is raised, I would suspect is the effectiveness. Those are the words of the government official, not mine. Colleagues, that is certainly a rationale for government coming forward in a budget bill and asking to increase the applicable exercise tax rate, but I fail to see how it is a rationale for allowing future rate hikes without parliamentary scrutiny or approval. When the officials were asked for precedents for such an extraordinary provision, they pointed to the tax brackets for personal income taxes, which rise automatically with inflation. But, colleagues, that indexation works to taxpayers' advantage. If a tax bracket goes up because of inflation, we pay less tax. That is nothing like the automatic excise tax increase.

Indeed, in the budget bill that is being debated in the other place right now, there is an automatic tax increase without ever again having the approval of this place or the other place. It is fundamentally contrary to some of the basic principles of the power of the purse in this place, and it shows the degree of respect that the government has lost for members of Parliament.

If we look back in the not too distant Canadian history, in the 1970s, granted it was well before I was born, but in the recent past of Parliament, in 1975, that great Liberal, Senator Joseph Day, said that parliamentarians felt they needed more time to debate the borrowing itself. In 1975, the borrowing authority was broken out of the supply process, and set up in its own dedicated process.

In 1975, the Speaker in this place ordered a borrowing clause struck from the supply bill related to supplementary estimates on the ground that under the House of Commons rules then established, its inclusion in the supply bill virtually precluded discussion of the borrowing provisions. After that, every year the government would have to come to Parliament and request, in a borrowing authority bill, the authority to borrow a stated amount of money for that year.

This is a fundamental power of this place and too often, we forget that. It was not too long ago as a perfect example of the disrespect that the government has for this place, the recent botched, boggled, failed appointment of Madeleine Meilleur as Commissioner of Official Languages. Fundamentally, Parliament was not involved in that process. Members of this place were not involved in that process. They were not consulted, they were simply told in a letter dated nearly a month after Ms. Meilleur was informed she would be the successful candidate. That is not consultation. Officers of this place ought to be chosen with fundamental consultation by members of this place.

The estimates process, the business of supply gives us the opportunity to pass judgment on the continued confidence of the government in office. The confidence convention means that cabinet, in this case the Liberal cabinet, is accountable to the House, and confidence can be withdrawn by a number of provisions including the supply process, including a vote on main or supplementary estimates. In this case, our opposition does not have confidence in the government, and we will be voting against the estimates because of that lack of confidence.

I wish to highlight one matter in particular. It is our national debt and ongoing deficit spending. We all vividly recall in the last election the then leader of the third party, now the Prime Minister, promising Canadians, giving them his solemn word, that he would run tiny $10 billion deficits for three years, and only three years, but by 2019, in time for the next election, we would be back to balanced budgets. That quickly went out the window with the very first budget of the Minister of Finance. Now, over the next number of years, we will see continued deficit spending. In fact, the Department of Finance's own numbers show we will not return to balanced budgets until 2055.

Let me put that in context. My son Bennett just turned one on June 1. By the time the budget is balanced, Bennet will be 39 years old. He will be older than I am now, and that is pretty old. My daughter Ainsley, is about three years old. She will be 41 by the time the budget is balanced. We are putting the debt, the spending and the mismanagement of the Liberal government on our children's generation. It is unacceptable that by 2055, we will have $1.5 trillion in total debt, debt that will be paid back through the continued interest charges of future generations.

It is completely unacceptable that the government has given no plan for the return to balanced budgets. Our friend and colleague, the member for Louis-Saint-Laurent, the finance critic, asks the Minister of Finance on a very regular basis, when will we return to balanced budgets. Each and every time, the Minister of Finance waffles and fails to answer the question.

My constituents were hurt In my riding of Perth—Wellington. They are hard-working Canadians. They balance their chequebook each month. Small businesses balance their books each month. However, each and every month they find it harder and harder to continue to survive in their businesses because of the concerns and the issues being placed on them by federal Liberal government and the Liberal government in Ontario.

I spoke to one business owner not too long ago whose hydro bill tripled in the time that the McGuinty-Wynne Liberal were in office provincially. Now we are seeing at federal level the imposition of a carbon tax, which will only see the cost of running a business increase. It is not just businesses that are seeing their costs increase. Families are seeing their dollars stretched further and further each week because of the Liberal government.

I recall the very first bill brought before the House, Bill C-2, which was what the Liberals called a middle-class tax cut. No one making under $44,000 a year got a cent out of that tax cut. In fact, those making between $100,000 and $200,000 were getting the biggest tax cuts out of that, but those making under $44,000 got nothing, not a dime.

In the first budget, the Liberals took away the fitness tax credit. They took away the arts tax credit for families that decided to put their children in arts programs or in fitness activities to improve their health. They got rid of the text book and education tax credit. I was at Carleton University earlier today, talking with current students and former students, and the importance of fundamentally helping our young people survive. Again, the Liberals are making it harder and harder for Canadians to get by.

I want to speak to home ownership for a minute and the changes the Liberals have been placing on the burdens of buying a home for the first time. We should be encouraging and helping Canadians buy their first homes. A strong society encourages home ownership, encourages Canadians to buy that first home rather than discouraging them from doing so, as we are seeing in the recent changes.

I want to close on where I started, and that is about the fundamental importance of the supply process and the estimates process. This process belongs to the House, belongs to Parliament, the power of the purse, the ability for parliamentarians, each and every member of Parliament, whether they are government MPs or not. This is our opportunity to pass judgment on the confidence we have in the government.

I have no confidence in the government, and I will be voting against the main estimates when they come to a vote later this evening.

Resuming debate

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

Mr. Speaker, the debate concerning motion No. 14 is not about having a problem with working until midnight each evening—except, obviously, on topics raised by the opposition. I agree with what the Parliamentary Secretary to the Leader of the Government in the House of Commons said in the House yesterday, that most of us are already working every day on a similar schedule.

In my previous career, I was already used to long hours. When I ran a global business, my European colleagues began calling me at 4 a.m., and my days would often stretch until midnight. This was necessary so I could meet with my employees and people in the plants and businesses in the Pacific region I was responsible for.

As the head of a North American refining and petrochemical company, I realized that maintaining customer relations and meeting deadlines to submit applications made for very long days.

The Liberal government said it wanted to make Parliament more family friendly in order to encourage women to get into politics. I support encouraging more women to get into politics, but I do not believe that many women would choose to work until midnight each evening, away from their kids.

Now, why did this government introduce such a motion, when theoretically it should oppose it?

As I have said, I am not opposed to working long hours. I said earlier today, and will say it again, Einstein was quoted as saying that the definition of insanity was repeating the same action hoping for a different result. The government has not accomplished a lot in the way of legislation. If we think about the 19 bills that have passed versus 52 in the same time frame when the Conservatives were in power, really not much has been accomplished. There is no prioritization of what is coming forward.

I want to take a moment to talk about what has already passed because it shows something important.

So far in Parliament the transparency for first nations has been removed with Bill C-1. Bill C-2 gave back to the middle class $932 a year in taxes and then Bill C-26 increased their CPP payments by $1,100 a year, with no benefit. Bill C-10 gave Air Canada a deal to get maintenance jobs out of Canada and escape a lawsuit. Bill C-14, medically assisted dying, was passed without protecting the rights of conscience. Bill C-17 addressed environmental items for Yukon. Bill C-18 was environmental change for Rouge Park in Toronto. Bill C-30 was a CETA deal that now has to be renegotiated with Brexit happening. Bill C-31 was the trade deal with Ukraine. The rest were all maintenance budget items that needed to be done. That is all we have accomplished in 18 months of the Liberal government's agenda. Everything else is lost in process, being amended in the Senate, and not coming forward.

What is the government going to achieve by making us sit every night until midnight, which, as I said, I am fully willing to do? I really do not think it is getting anywhere. Why is it not getting anywhere? Because it does not listen to the opposition's points of view.

The job of the opposition is to bring reasoned and intelligent arguments on why a government proposal is not good for Canada and to make helpful suggestions about what would make it better.

When bills are sent to committee, the committee's job is to make helpful suggestions and amendments that would make them something all Canadians could embrace. That is really what is happening. The government is not accepting amendments, not listening when the opposition talks, and again and again, when things go to the Senate, the Senate comes up with the same amendments and spends more time studying them, doing exactly the same thing that committees of the House are supposed to do. That is one problem.

Another problem is that there has to be trust when parties work together.

I am going to compare the antics that I see happening here with what I see in the business world. In the business world, people work together. People have to be able to trust one another when they make deals. They have to be able to follow up on things as they said they would.

From what I have seen, the opposition House leaders are trying to work with the government House leader but she is not keeping up her end of what she has agreed to. Every day I watch her stand in the House and misrepresent to Canadians that she just has a discussion paper, when really a motion has been rammed through PROC. I have seen her avoid answering questions that she is accountable to answer.

I would suggest that there has been a huge erosion of trust in the government House leader and sometimes that cannot be fixed in order to restore the ability to work together. The government should really consider changing up that position and coming back to a place where we can work together and trust that agreements that are made, amendments that are suggested, and motions that are brought forward are as agreed. That is really important.

There is another point that I would like to make that has not been discussed much here. I have listened to the debate on Motion No. 14 and I have heard a lot about the blame game. I hear from the Liberals that when Stephen Harper's government was in place, it did this bad thing or that bad thing, or whatever. Honestly, two-thirds of the Parliament are new. Some of us were not here in the previous Parliament. We have an opportunity to do things differently now. If we think something was previously done wrong, we have the opportunity to do it differently in the future.

When items come up in the business climate, not everything needs the same amount of time to be talked about. I have sat in the House and heard Liberal members stand up and say they support such and such a bill and I have heard Conservative members and NDP members stand up and say they do too, and then we talk about it for days.

This is not the way we should be spending our time. If the government had not squandered all of the time in that way, we would have more time and we would not have to sit late. In the same way, there are things that need to be discussed longer that cannot be rammed through, things such as the budget bill that has been combined with the infrastructure bank. When comments come forward, the government needs to lead. It needs to separate those things out so that the things that can be quickly passed get passed on. When I say passed on, I am saying that if we all agree on a bill at first reading and we do not need to change anything, then the legislation should be sent right away to the Senate. Why are we spending time doing second and third reading and committee and everything else? We need to be able to update some of the processes here.

I am not about just criticizing without providing recommendations for how I think we could make this better. Here are my recommendations, which I think the government could use to change some of the things that it is doing and which would result in getting legislation passed through in a better way.

When it comes to the rules of the House, I see an opportunity to modernize those rules but a change would need to honour the tradition of Parliament and have all-party consensus or at least the consensus of a majority of members to change things, because those things influence our democracy and they are important. Doing some of those things would, as the suggestions I have made about passing things we all agree on and everything else, clear the legislative agenda in a way that would move things forward more positively.

I also would reiterate that you have to have someone working with the opposition leaders who can be trusted, and I think that trust is broken.

The other point I would make is about amendments that are brought forward and are agreed to by the opposition members. It is not often that the NDP and the Conservatives play on the same team and sing from the same song sheet. That does not usually happen but lately it has happened a lot. When that happens, it should be a signal to government that this is an amendment that Canadians want to see.

The government needs to say what it is going to do and then it needs to own up to it. Some of the credibility loss that has happened has happened because the government said it was going to do something and then it did not. The government maintained it was going to be open and transparent and then facts have been hidden or things have not been well represented. The government said it was going to be accountable but then every day when we stand up and ask questions we get the shell game. It does not answer our questions, and this would not be acceptable in the business world.

These are some of the things that would help to get the legislative agenda flowing through. As a member of the opposition, I want to see the right things happen for Canada and I am willing to work with the government to see that happen.

Opposition Motion—Budget 2017

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

Mr. Speaker, the member across the way says she wants to see a plan. There is Bill C-2, a tax cut for Canada's middle class. How did the Conservative Party vote on that plan? The Conservatives voted against that plan.

Then we have Conservatives across the way talking about how they want to give advice to the government on balanced budgets. That has to be one of the weirdest things, because the Harper government never got it right. It had deficit after deficit, and it even created the deficit prior to the last recession coming into place. This government does not need to take any advice from the Conservative Party with respect to balanced budgets.

Why did the member vote against Bill C-2, which is a great tax decrease plan?

Oral Questions

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, during question period, the member for Outremont said that his party voted in favour of Bill C-2. I know that no member of the House would want to mislead Canadians, which is why I am tabling, in both official languages, excerpts from Hansard of September 20, 2016, which shows the member for Outremont and others from his party voting against the middle-class tax cut at third reading in the House.

Message from the Senate

[The Deputy Speaker, Conservative, Bruce Stanton]

I have the honour to inform the House that when the House did attend His Excellency the Governor General in the Senate chamber, His Excellency was pleased to give, in Her Majesty's name, the royal assent to the following bills:

C-2, An Act to amend the Income Tax Act—Chapter 11, 2016.

C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act—Chapter 14, 2016.

C-29, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures—Chapter 12, 2016.

C-35, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2017—Chapter 10, 2016.

S-4, An Act to implement a Convention and an Arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend an Act in respect of a similar Agreement—Chapter 13, 2016.

It being 4:53 p.m., the House stands adjourned until Monday, January 30, 2017 at 11 a.m., pursuant to Standing Orders 28(2) and 24(1).

(The House adjourned at 4:57 p.m.)

[Trevor McGowan]

We received a number of submissions from the Canadian Medical Association and the Canadian Association of Radiologists, and looked at the testimony before the committee.

A few points probably warrant further mention. Obviously from their perspective, it affects doctors, but it is a provision of general application. The small business deduction is available regardless of what business you're in.

As was said earlier, these measures would follow the existing policy where there's one business and one business limit of up to $500,000 that applies to partnerships as well in this context. The rules are called the specified partnership limit rules, and they provide that when you have a partnership with a number of corporate partners, that one limit is shared among the partners. These rules are currently in the act, and the amendments in Bill C-29 are an extension of that policy.

I mentioned as well that it's a provision of general application. As we've heard, it applies to doctors, and it would also apply to lawyers, accountants, dentists, engineers, architects, or any group that could organize themselves into one of these structures. It is not a provision aimed solely at the medical community. It is reinforcing the integrity of the small business deduction rules and the $500,000 limit, and it does not look at what type of business is being carried on.

I know a number of comments were based on numbers. They mention certain numbers. The Department of Finance had others. I believe we have our costing measures, our numbers that we provided in the last hearing. But one thing that had been mentioned I heard earlier was the $32,000 number. I can explain briefly where that came from, but in doing so, I would have to provide a little context into how these rules work, and the sort of planning that is going on.

If an individual earns income directly, they pay taxes at the normal marginal rates, as was said, often around 50%. I think the top marginal rate in the relevant example provided was an Ontario individual, so that would be, I think, 53.53%. If you earn income through a corporation, there's corporate tax. The general corporate tax rate is 15%, and the small business deduction rate is 10.5%. That's federally, obviously. There are provincial taxes on top of that, but I don't want to list them all. We're not neglecting them, but it does make it higher.

Due to the corporate shareholder integration mechanisms in the Income Tax Act, if you earn income in a corporation and then pay it out in the same year, you generally pay the same combined corporate and individual tax rates as if you earned them directly. In the $32,000 case, that was $500,000 of income from Dr. M., and so if they earned it directly or through a corporation, we'd have roughly the same amount of tax in Ontario.

The benefit sought to be obtained is when funds can be retained in the corporation, so there's a lower corporate tax rate, 15% federally, as opposed to a top federal rate of 33%, assuming Bill C-2 is passed, so that's a significant difference.

To the extent those funds are not needed for personal costs of living, maxing out your RRSPs or whatever, to the extent that those funds are available to be left in the corporation and invested, then that presents a deferral benefit if they're not taken out in that year. In the case provided, I think some $214,000 was left in the corporation and the difference between the small business rate and the general corporate rate was calculated at about $32,000, but those are the funds available to be invested and to get the benefit of the one-year deferral, you can invest those funds at around a 5% rate of return, and that might give you, I think, about $1,500 over a year. I think there were comments on that. Then that $1,500 would be taxed, so the actual benefit would be even lower. That's just by way of explaining the differences in the numbers.

It looks at the benefit, at where you take the computation. Do you look at the dollars available to be retained in the corporation or do you look at the actual value of the deferral benefit?

I hope that provides some more context into where some of these numbers are coming from and the planning itself. It really involves the ability of particularly professionals, such as lawyers and so on, to leave their excess funds in their corporations and to invest them to earn an enhanced yield. If you're earning income directly and you're a top-rate taxpayer, taxed at 53% in Ontario, and then you earn $100—your last $100 subject to the top rate—you'd have $46 or $47 available to invest. If you earn it in a corporation and the corporation pays tax at 20%, say, you'd have $80 to invest. That's a good head start.

That's the benefit of the deferral, and that, of course, is not being touched, the general difference between the general corporate rate and the personal rate. It just provides some context into the nature of the benefit and the differences in the numbers.

To kind of tie it all together, those benefits will continue. What will be preserved is the general policy underlying the small business limit, which is to say that one business, either a sole business in a corporation or a partnership, has one $500,000 deduction, and that can't be, to use our phrase, just multiplied. If you have one partnership, you have one $500,000 limit; if you have 10 partners, that could be $5 million or $5.5 million; 100 partners would be $50 million, and so on.

I understand there were questions about the use of the word “multiplication” as well. That's the sense in which the term was used in the Department of Finance documents.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member wants to talk about taxes. To me, that is not what this debate is about. This debate is about our future and those individuals who are employed having a better retirement fund in the years ahead. That is really what this debate is all about.

However, if we want to vote on the issue of taxes, all I need to do is refer the member to Bill C-2, something I have already provided comment on. That is a bill that put hundreds of millions more dollars into the pockets of Canada's middle class.

The Conservatives—and I know it is hard to believe—actually voted against it. They wanted to keep the money, not give that tax break.

Therefore, there is a bit of inconsistency in terms of the small business. Hopefully, in my next answer, I will be able to address that.

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

Mr. Speaker, I would like to take a bit of a different perspective in dealing with the legislation before us today. Just over a year ago, Canadians went to the polls and voted for real change. The reason I say that because what we are debating today is not only symbolic, but it demonstrates, in a very real way, the difference between the current government and the previous government.

For many years, when I sat in opposition, I would look to the government and the prime minister of the time, Stephen Harper, for strong leadership on the retirement file, on the issue of CPP. It was not because it was coming from nowhere. The issue was coming from many different regions of our country. Many provinces wanted Ottawa to do something with the CPP. For years, the Conservatives sat in government and chose to do nothing. They have their own mindset about how retirement should work into the future.

I have always believed that the Conservatives were not really big fans of the CPP program. Through this debate, my belief has been reinforced.

Why the real change? Since taking office, seniors have been addressed in a very real and tangible way. Today, we are talking about the CPP. The Minister of Finance reached out to the provinces, listened to what Canadians wanted, and understood the demands of what the provinces also wanted to see. For the first time, we have seen a national government demonstrate leadership by going to the table and working out an agreement among the different provinces and territories on how we can deliver on ensuring a better retirement for today's workers. I believe Canadians as a whole want to see that.

We got the job done. The government introduced the legislation, after getting a historic agreement signed off with the provinces and territories. Now we are debating it today. Future workers will benefit when the time comes for them to retire. This is about having a vision, something the previous government did not have.

I then look at my New Democratic colleagues. They seem to want to continue to give the impression that only they care about seniors. They look at ways to criticize, not acknowledging that in fact what we are doing today is a positive thing. They look for ways in which they can be critical, even though a New Democratic premier is supportive of this.

I would suggest for my New Democrat elected friends across the way that even the vast majority of New Democrat members would in fact support and say positive things about this legislation.

Is it absolutely perfect? As we know, there is always room to be better. The Minister of Finance has made a commitment to bring those issues raised on the floor of the House to the attention of premiers to see if they can improve upon the agreement. However, at the very least, the New Democrats should acknowledge that this has been in the making virtually since day one with our government. Canadians have been waiting for this for more than 10 years.

The member who just spoke said that we had to be sensitive about our seniors and their needs and made reference to food. We have to take a holistic approach in what the government is doing on the senior file. The most vulnerable seniors today are getting a substantial increase in the guaranteed annual income. Tens of thousands of seniors will be lifted out of poverty as a direct result of our government's action to increase the guaranteed income supplement. This is good news.

Again, for my New Democratic friends, they do not have to stand and applaud when the government does good things, but at the very least try to reflect reality and express the truth of the matter at hand. The matter is that our government is committed to servicing and trying to improve the quality of life, not only for future retirement needs but also for those most vulnerable seniors who find it so difficult to make financial ends meet.

I know how serious it is. While canvassing in Winnipeg North, I spoke to seniors who said that they were having a tough time deciding on whether to buy food, or purchase the medications they required or other necessities. Far too many seniors go to food banks as a direct result of this. Our government clearly understands that and has delivered on making a difference by increasing the guaranteed income supplement. However, that is not all. We still have three foundation stones dealing with public pensions. I made reference to two of them. The other one is our old age supplement.

One of the first things this government did within a couple of months of taking office was reverse the decision former prime minister Stephen Harper took when he increased the age of retirement from 65 to 67. I remember it well. I sat on the other side and the prime minister was overseas when he made the announcement that we were in a financial crisis in Canada and that the government would have to increase the age of retirement from 65 to 67. There was nothing to substantiate it. It was a personal opinion of a prime minister who had no faith in other pensionable social programs in Canada. Within a couple of months, we reversed that decision. Now individuals know that when they hit age 65, they will be able to retire and receive old age supplements.

Today should be a happy day. This bill has received support from many different sectors of our society, in particular, our provincial governments that have signed off on enhancing CPP. The Conservatives, on the other hand, talk about why they oppose the legislation. They brought forward a series of amendments. Their argument seems to be that we should not allow for the increase in the CPP because it is a tax. Therefore, they will not support the bill.

It contradicts the actions of the Conservatives on Bill C-2. They voted against Bill C-2, which was hundreds of millions of dollars in tax breaks for over nine million Canadians. Their arguments are not consistent with their actions. When I think of the Conservative Party's real agenda on the CPP, I believe it would be quite content if the CPP were not there. The arguments the Conservatives are using today could be used ultimately in getting rid of the CPP.

I would challenge the Conservatives to change their position and vote with the rest of the members, the Bloc, the NDP, and the Liberals, support the legislation, and oppose the amendments that are being debated.

Motions in amendment

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Madam Speaker, we voted against Bill C-2 because it is a false decrease of taxes in Canada.

I would invite my colleagues to chat with Senator Larry Smith, who has done great research and has put forward some amendments at the Senate committee on finance. This is research that shows, without doubt, that the decrease of taxes will only benefit households that make between $140,000 and $170,000 per year. It will not help any household with revenue under $100,000 per year. People with lower incomes are not better off with that. That is my answer to my colleague.

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

Madam Speaker, I hear a lot about tax breaks. This is a government that generally supports tax breaks. After all, we introduced Bill C-2, which gives a substantial tax break to Canada's middle class of hundreds of millions of dollars, and nine million plus Canadians are benefiting from that.

One could ask the question, why then, if there is so much focus on tax breaks, did the Conservatives vote against that most significant tax break?

Canada Business Corporations Act

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

Mr. Speaker, a number of Conservatives have stood up and made reference to the legislative workload. We can talk about Bill C-2, the middle class tax cut; Bill C-26, a negotiated agreement where we have seen significant agreement across the country among different provinces and territories; and things like medical assistance in dying.

Right now we are debating Bill C-25, a bill for which the Conservative Party wants to assume the credit, saying that it is, in essence, a Conservative bill. If it is a Conservative bill and we are trying to move things along, why would the Conservatives not allow it to continue through the process?

Health

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, 7% to 9% is not low cost.

Over the last two decades, more than 10,000 Canadians have died from opioids and an untold number now suffer from addictions. Will the government agree to take action by creating a national task force and repeal Bill C-2 to remove unnecessary barriers to opening new harm reduction facilities? Will the Liberal government immediately declare the opioid crisis a national public health emergency? Action is needed now to help save lives.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay.

I may have missed it, Mr. Chair, because some of us are slower than others. On the Canada child benefit indexation, could you just cover what that will cost to government? I do know there was reference in the annex of the fall economic update.

Second, although I'm sure the government would say it's just a logical follow-through of ongoing policy, why wasn't this included in the original legislation? Really, I think Bill C-2 was one of the first pieces that the government put out. Why wasn't it included in the original legislation?

[Kamal Khera, Liberal, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, our government is committed to protecting the health and safety of all Canadians through evidence-based policy. The evidence is absolutely clear: harm reduction is an important part of a comprehensive approach to drug control. The Minister of Health has directed the department that there should be no unnecessary barriers for communities that want to open supervised consumption sites; and we have also directed the department to review all options to assist with the opioid crisis, up to and including amendments to Bill C-2.

Budget Implementation Act, 2016, No. 2

[Marwan Tabbara, Liberal, Kitchener South—Hespeler, ON]

Mr. Speaker, I just want to take a moment to say thanks to all the Olympic athletes and Paralympic athletes who were here today. It was quite an honour to see that. For 15 minutes, the whole House kept applauding. It was great to have had them represent us in Rio the way they did. I want to give a special shout-out to Olympic boxer Mandy Bujold and Paralympic swimmer Alexander Elliot, who live in my riding of Kitchener South—Hespeler.

During last year's election campaign, I spoke confidently to the residents of my riding of Kitchener South—Hespeler about our plan to grow the middle class and revitalize the Canadian economy by doing three things.

First, I talked about our plan to reduce income taxes on the middle class and those aspiring to join the middle class. Lowering taxes means leaving more money in the pockets of those who need it most and having more money to spend on goods and services in our economy.

Second, I explained our plan to implement a tax-free, means-tested Canada child benefit to replace the patchwork of existing programs. The Canada child benefit will assist families with the high cost of raising their children.

Third, I talked about our plan to borrow at current historically low interest rates to make very large investments in both physical and social infrastructure.

As I spoke to people, I stressed that these programs would not only help individual families that were struggling after years of stagnant growth but would grow our economy, generate economic activity, and create jobs by way of what economists call the multiplier effect.

As I spoke with people at the door, I did so with confidence, because I believed that our plan offered immediate help to those who needed it most. It set an ambitious long-term approach for growth by strengthening the heart of Canada's consumer-driven economy, the middle class.

A strong economy starts with a strong middle class. When middle-class Canadians have more money to save, invest, and grow the economy, everyone benefits. A strengthened middle class means that hard-working Canadians can look forward to a good standard of living and better prospects for their children. When we have an economy that works for the middle class, we have a country that works for everyone.

Judging from the reaction I got from people throughout my riding, the message I was delivering resonated with voters. The results of the election speak for themselves. Our message of hope caused voters across the country to raise us from a distant third place in this House to a majority government. On election night, Canadians saw the merit in our plan, and Canadians chose a plan to invest in our future for generations to come.

Our plan increased again, when legislation to reduce personal income tax rates, as promised, was introduced by this government last December as the second piece of legislation proposed in Bill C-2.

The hon. Minister of Finance tabled the government's budget in Parliament on March 22 this year. A budget is more than a mere forecast of expenditures and revenues. A budget is a financial strategy to fulfill what a government sets as its mission. A budget is a comprehensive plan of action designed to achieve the policy objectives of the government. A budget is a financial blueprint for action. A budget will remain only a blueprint unless there are the workers, materials, coordination, skills, and activities necessary to construct it.

Real change will remain only a vision unless there is legislation to implement the budget that flows from that vision. Following quickly on the heels of the budget, Bill C-15 was the first legislation introduced by the government in April. It was the first budget implementation bill. It turned the second major promise I made to the constituents of Kitchener South—Hespeler, as I went door to door during the election, into a reality.

Bill C-15 brought in the Canada child benefit. Simpler, tax-free, and more generous, the Canada child benefit replaced existing child benefits. Bill C-15 passed quickly through this House and the Senate and received royal assent in the third week of June.

Immediately afterwards, in July, the Canada child benefit payments started flowing to families to fulfill their financial responsibilities in raising the next generation of Canadians.

The Canada child benefit is a social program of unprecedented generosity. Since July 1 this year, families can receive up to $6,400 per year for each child under six and $5,400 for each child aged six to 17. Nine out of 10 families are better off. They are receiving higher monthly benefits, and hundreds of thousands of children will be raised out of poverty.

This government has taken a long-term approach to helping families, who will be able to count on extra help now and for years to come. When Canadians look towards the future and think about planning, they know that the Canada child benefit will be there to help fulfill their financial responsibilities.

Today before the House is Bill C-29. It is the second of two pieces of legislation intended to implement the budget tabled in the House in March. Bill C-29 is the second act to implement this year's budget. It contains a number of consequential housekeeping amendments to various acts, such as the Employment Insurance Act, the Canada Education Savings Act, and the Canada Disability Savings Act, to replace references to “child tax benefit”.

However, for most Canadian families, the most important part of Bill C-29 is the introduction, as promised, of indexation of the Canada child benefit. Bill C-29 would implement the budget by indexing to inflation the maximum benefit amounts and the phase-out threshold under the Canada child benefit, beginning in the 2021 benefit year. This means that the benefits will increase if prices increase, and thus the purchasing power of the benefit will remain the same after 2020.

I would now like to turn to a couple of articles.

The first article is from The Economist, which said, “Canada is in a better position than almost any other rich country to take advantage of low rates”.

With the historically low interest rates, this is the time to invest in Canadians, in our future, and in the young generation to take advantage of these low interest rates.

The second article I want to refer to is from CBC News:

The IMF head [Christine Lagarde] said economic growth has been “too slow for too long” and the IMF advocates a “three-pronged approach” from governments trying to kick-start the global economy.

She said the [Liberal] government is following that approach with monetary, financial and structural reforms that will mobilize the resources of the state to increase growth.

For those reasons, I would therefore encourage all members of this House to support Bill C-29.

Health

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, Canada is going through a deadly opioid overdose crisis that is so severe and widespread that few Canadians are untouched by it.

In my home province of British Columbia alone, 800 more people are expected to die from opioid overdoses than from motor vehicle accidents this year. In Ontario, opioid overdose is the third leading cause of accidental death, and one out of every eight deaths in Ontario among young adults is related to an opioid overdose tragedy. Last year, 274 people in Alberta died from overdosing on the opioid fentanyl, a drug so powerful that a single particle the size of a salt grain is enough to cause an overdose and two are enough to kill. For the country as a whole, opioid overdoses are expected to claim an estimated 2,000 lives by the end of this year. That is one Canadian dying every four hours.

Although, this has been a national crisis for well over a year, the response of the federal government has been unacceptably slow, leaving individual jurisdictions to tackle this crisis alone. For example, B.C. is currently grappling with a massive influx of fentanyl that led to 238 deaths in the first half of this year alone, leaving Dr. Perry Kendall, B.C.'s chief health officer, to declare a public health emergency for the first time ever in B.C. history.

That is why I moved a motion at the health committee to launch an emergency study to provide recommendations for immediate federal action to tackle Canada's overdose epidemic. This morning, the committee began its study. Hearing from witnesses representing Health Canada, the Canadian Institute for Health Information, the RCMP, the CBSA, and the Canadian Centre on Substance Abuse, we learned a number of cogent and sometimes disturbing facts. Among these are the following.

The federal government has not declared the overdose a public health emergency, even though it recognizes that it displays the characteristics of one and is being regarded as one.

In spite of the overwhelming evidence supporting safe injection sites, the federal government stubbornly refuses to repeal Bill C-2, Conservative legislation that the former Liberal health critic said was deliberately designed to prevent sites from opening.

We learned that the government has no plans to invest any new funding to expand much needed treatment for addictions in partnership with the provinces and territories. We also learned that in the absence of national data on opioid prescribing and overdoses, we have no way to capture the full extent of this crisis. Instead, we continue to rely on fragmented and incomplete data to identify the policy changes most likely to address the overdose epidemic.

Despite being successfully employed by the Vancouver Police Department for a decade, we learned that the RCMP hasn't even considered a policy of non-attendance at 911 calls for overdoses. We also learned that Ottawa has not moved to restrict access to devices involved with drug production, such as pill presses and tableting machines, and Canada will not have new prescribing guidelines for opioids until 2017.

We learned that the CBSA lacks the statutory power to open containers smaller than 30 grams to halt opioid trafficking at our borders. This means that traffickers who mail fentanyl to Canada in envelopes under 30 grams will never have their shipments opened under current legislation. Instead, CBSA will call them and request their permission to open the envelopes.

Given the severity of this overdose crisis, more urgent action is needed. When will the federal government finally step up and show the leadership necessary to more effectively confront the opioid overdose epidemic facing our nation and killing our citizens?

Government Expenditures

[Justin Trudeau, Liberal, Prime Minister]

Mr. Speaker, as the member knows full well, this is a longstanding policy, one that has been in place for years, decades even, and that the former Conservative government updated a few years ago. We applied all the principles and rules.

The reality is that the former government still does not understand that voting against tax cuts for the middle class and a tax hike for the wealthy is good policy. It is disappointing that they voted against Bill C-2.

INCOME TAX ACT

[The Speaker, Liberal, Geoff Regan]

It being 3:05 p.m., pursuant to an order made earlier today, the House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-2.

Call in the members.

The House resumed from September 19 consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.

Taxation

[Bill Morneau, Liberal, Minister of Finance]

Mr. Speaker, I would like to thank the member for Kingston and the Islands for reminding us of something we know.

The last decade of low growth has been tough for middle-class families. That is why last December we introduced a tax cut for nine million middle-class Canadians. It gives a single person on average $330 more this year and a family on average $540 more this year. It is also why we introduced the Canada child benefit, which gives nine out of ten families $2,300 more this year.

Later today we will be voting on Bill C-2 to formalize these measures. I urge all members in the House to vote in favour of middle-class Canadians and in support of this legislation.

Income Tax Act

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, I am going to point out that in the last 94 days since we last sat in this place, $8 billion has been pushed out by the Liberal government. How are the Liberals going to balance that? They agreed on a $10-billion deficit. We know by the announcement alone that in three months or less they have blown this thing right out. Canadians are not fooled by this. We all spent the summer door-knocking, having barbecues, and talking to our constituents. They know that Bill C-2 will not survive.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, it gives me a great opportunity today to speak to Bill C-2. Spend, spend, spend is what the government has as its agenda, and spend it did. In the last 94 days since we last sat in the House, the government has given out roughly $8 billion. Canadians from coast to coast to coast are realizing that the government's agenda will send our country into massive debt. Debt comes with a cost, and it appears that the well educated and those with high-paying jobs will pay the brunt of these budget announcements.

A poll released earlier this month shows that nearly half of all Canadians are draining their bank accounts between each two-week pay period. Many are adding to their debt levels, which as we know are very dangerous. There are four in ten Canadians who say that they spend it all between pay periods, so even a small increase in interest rates would spell disaster for many Canadians families. We have enjoyed record levels of low interest rates, but sooner or later they will go up. We are obviously not prepared for this. Live and spend for today, but tomorrow brings paybacks, and governments should always be aware of that.

We have talked long and hard about not spending our children's and grandchildren's future in this place, so then why are we doing it? We should be reminded about the economic policies of the Liberal government some 30 years ago, which increased taxes, debt, and bailouts. It took subsequent governments 30 years to recover from that reckless spending. Why is the current government repeating the same policies? It took a generation to recover from that.

To look back in history, it was our previous government that restored the pay increase to the middle class by an average of $5,000 per year. Those living in Ontario appear to be far more pessimistic than the rest of the country as a whole. We should not be surprised about that, because it too is a Liberal government, and like the one in Ottawa, Liberals love to spend, spend, spend. Taxes will eventually have to be paid for down the road.

It has been an especially dark summer in my province of Saskatchewan. We have had many layoffs, shutdowns, and takeovers in the headlines of our major newspapers in the province. Mitsubishi Hitachi Power Systems laid off 150 Saskatoon employees in July. The company later said it is going to close the plant permanently and sell off all of the assets. In July, workers at Mosaic's Colonsay potash mine were told that the entire mine would be shut down until January 3, 2017. The company said it hoped to call back workers, but there is no guarantee. In late July, I drove by that mine in Colonsay, once hosting well over 200 to 300 stalls for parking, and there were five vehicles in the parking lot. It has affected the entire area, as businesses surrounding the Colonsay mine have been hit hard with the shutdown. Many were forced to cut hours or lay off staff.

The entire potash industry in this country is nervous, with the possible merger of Potash Corp. and Agrium that was announced earlier this month. Vecima, another company in Saskatoon, announced massive layoffs in July. The decline in the construction industry has hit our province especially hard. The largest decline in construction employment was in the Saskatoon metropolitan area where the employment for three months ending in August was 3,200 lower than it was the year before.

There were 42,000 unemployed in the province of Saskatchewan during August. That is an increase of 3,400 from the month before, and 5,200 more than the number of unemployed in August of 2015. EI recipients jumped 19% alone in the month of June.

Doug Elliott, who is the publisher of Sask Trends Monitor, said that people were unable to find work and simply stopped looking entirely. Let us think about this. The incentive to work among the current unemployment ranks is lost in our country.

Now we hear that the government will move forward on its carbon tax. Like it or not, we are going to have a carbon tax in our country. There was no agreement at all from the Vancouver meetings that were held in March, and we actually missed the September 2 deadline. Now, like it or not, we are going to have a carbon tax, because we were promised one. What happened to the collaboration that was promised by the government almost a year ago?

Employers are feeling the pressure in oil and gas producing provinces like mine in Saskatchewan, along with Alberta, and Newfoundland and Labrador. The budget did nothing to improve their situation at all. Once considered the backbone of Canadian economy, these provinces were left to fend for themselves with the current federal Liberal government.

I might add, changes coming to the CPP would add more cost to businesses at a time when they are scrambling in this weak economy, yet the federal government shows no mercy for business and the middle class. According to a new Ipsos survey conducted on behalf of the Canadian Federation of Independent Business, eight of ten people want the government to consult with the public before going ahead with its CPP expansion plans. Therefore, if the CPP reforms mean that businesses freeze or even cut wages, employees will simply oppose these reforms. Working Canadians do not support changes to the CPP if it has the consequence of freezing or even diminishing their salaries at all. This makes sense, since we all know Canadians are feeling the pinch in this economy right now.

Today the Minister of Finance confirmed that the economy will create 1,050 fewer jobs per year over 10 years than would have been the case without the higher premiums. Changes to the Income Tax Act were, and continue to be, a major concern for entrepreneurs and professionals coast to coast. These are the people who are driving our economy. We know that our previous current government left the current government with a surplus. In the last 94 days alone, the federal Liberal government has gone through nearly $8 billion of announcements, plus the $1.3 billion spent outside of our country.

Our previous Conservative government believed that people needed to save for the future. The popular TFSAs were there for emergencies. This was visionary, as it promoted families to save for the future. In times of uncertainty, like right now, they could withdraw from those TFSAs. In times of prosperity, they could save for the future. By saving now, it would take the burden off the federal government in future years. It could be used to redirect the money to other needed programs.

This summer, I knocked on hundreds of doors in my riding of Saskatoon—Grasswood, and we did a number of barbecues. I was constantly told by people how disappointed they are in the Liberal government. Many professionals said they would simply cut back their hours. Instead of serving the public like they do now for six and seven days a week, they will cut back their hours to three or four days a week. The incentive is gone, and that will make us all pay dearly in the end.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Mr. Speaker, I will be splitting my time with the member for Saskatoon—Grasswood. I rise in the House today to speak to Bill C-2, an act to amend the Income Tax Act.

This legislation slashes the contribution limit for the tax-free savings account from $10,000 to $5,500. The rationale behind this cut, as we have heard many times from the Prime Minister, the Minister of Finance, and other ministers is that the tax-free savings account is only for wealthy Canadians, and no one has an extra $10,000 just laying around.

This rationale could not be further from the truth. Seniors are saving for their retirements, students are saving to pay for their educations, new parents are saving for their children, and young entrepreneurs are saving to start a business.

In my riding of South Surrey—White Rock, it is the seniors who will be hit the hardest by the legislation. Constituents in my riding overwhelmingly do not support this change. A report from the parliamentary budget officer back in 2015 stated that middle-income earners and Canadian seniors were benefiting the most from the tax-free savings account. This report also stated that raising the limit to $10,000 would benefit middle-income earners and seniors even more in the long term. This is exactly what the Conservative government did. We raised the limit to $10,000 to benefit seniors and the middle class.

However, I hear from the Liberal government that the tax-free savings account, again, only benefits the rich and therefore needs to be cut in half. It is the same thing with small business. We heard from the Liberal government that small business is only a tax haven for the rich. I cannot help but wonder where and how it is getting its information, because it is contrary to the parliamentary budget officer, contrary to experts in the banking industry, and frankly contrary to plain old common sense.

Let us talk about the so-called tax cut for the middle class. Again, we heard over and over again that the tax cut, which is also included in this bill, would be revenue neutral and would not cost Canadians anything. This statement is simply not true. The finance minister has since amended his comments and stated that his plan is not revenue neutral, and in fact it will cost Canadian taxpayers at least $1 billion. However, in a report from the parliamentary budget officer, it is stated that the figure is $1.7 billion.

Now we have gone from revenue neutral to costing the taxpayers $1.7 billion. However, it gets even better for taxpayers and those who are losing their jobs. The Liberal government told taxpayers that for a tiny deficit of $10 billion, infrastructure projects would be built and the economy would flourish. Again, that is not true.

From a balanced budget with a $1-billion surplus, the condition that we left our finances in, as stated numerous times by the parliamentary budget officer, the Liberal government burned through the $1 billion, racked up a $30-billion deficit, and we are still waiting for the infrastructure projects.

The Liberals have decreased the ability for seniors, middle-class families, and students to save, and increased the debt burden on every Canadian through reckless spending, as well as removing the tax credits for post-secondary tuition, school textbooks, and for sports and arts programs for children. They also increased the contributions to the CPP, and $6.7 billion has been spent or committed overseas. Just today, the Prime Minister announced over $450 million to the UN. That raises the total to over $7.1 billion.

Further to that, recently announced by the Prime Minister, an eight-month-old Asian infrastructure investment bank initiated by the Chinese government will see approximately 2.9 billion of Canadian taxpayer dollars for infrastructure built in Asia. It is important to note that all of these figures are only what is publicly being pledged. As we know, not all government spending is announced publicly.

There is only one question to ask: what tax increases will the Liberal government implement in order to pay off the debt? It will have to be paid off. I remind the government that there is only one taxpayer and it is not their money.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, I thank the electors of my constituency for this opportunity to represent their interests in the affairs of this nation.

Today we will talk about paying for bad spending, like this legislation, Bill C-2. It is one of the reasons Canada has gone from having a budgetary surplus to having a huge requirement to raise taxes.

The legislation we have before us today is the result of election campaign promises. These measures could easily have been incorporated into the federal budget, but for whatever reason of political expediency that motivates the government, we are dealing with budget measures, but not from the March budget.

Some election promises are made to be broken. Unfortunately for Canadians, the election promises that were broken were the wrong ones, starting with a decision to triple the deficit from $10 billion to $30 billion in each of the government's first three years, with no plan to get Canada out of deficit. Deficits are nothing more than deferred taxes.

The Prime Minister went across the country during the campaign saying, we'll take the money from rich and we'll give it to the middle class for income tax cuts, and don't worry, it will not come out of the Treasury. It will be a revenue-neutral bill. The Prime Minister repeatedly and directly stated that he would introduce a $3 billion tax cut for the middle class, paid for by a $3 billion increase on high-income earners. The fact of the matter is that, as usual, the Liberals got their numbers completely wrong. There is no such thing as a revenue-neutral Liberal tax cut.

Now Canadians understand why the measures in the legislation before us today were sliced out of where they should have been, in the March 22 federal budget. That is because someone's tax cut on the one hand must be paid by someone else on the other hand, Canadians now realize that the title of the budget document was misnamed. It should really have read, “Paying for Bad Spending”.

By the Minister of Finance's own admission, when he is not in denial of the fact that our Conservative government left the nation's finances in a budgetary surplus, there will be a revenue shortfall of almost $2 billion from the measures contained in this legislation. Where will that money come from to pay for this campaign promise? It has to come from existing revenues, or the government will create an even larger tax increase requirement.

Starting April 1, the federal government is spending $444.4 million to hire a new army of tax collectors to go after average Canadians, with a five-year quota of $2.6 billion. For anyone who cannot afford to hire an expensive accountant or lawyer to defend themself, or who has so much money that they can afford to use overseas tax shelters, the Liberal government will spend $351.6 million with a five-year collection quota of $7.4 billion to collect so-called tax debt. In round numbers, it will be spending almost $800 million in total to squeeze $10 billion more out of the pockets of Canadians.

The CBC tells us that Montreal-based clothing maker Gildan earned $396 million in profit last year, but paid just over $6 million in taxes, a rate of about 2%. Drug maker Valeant, based in nearby Laval, Quebec, booked $1.1 billion in profit in 2014 but paid only $110 million in tax.

If the plan was to go after companies that use overseas tax shelters to avoid paying their fair share of tax, Canadians would support that. However, rather than paying for the tax changes in Bill C-2 by going after the large corporations that make extensive use of lawyers, accountants, and tax shelters, the Liberal government has targeted campgrounds—not any campgrounds, just the small mom and pop campgrounds that are typically family owned and operated.

The Liberal government even mentioned a number, five employees, on page 220 of the budget, implying that a campground with fewer than five full-time employees is a tax planning scheme. This is the arbitrary Liberal threshold to be considered a small business. Forget that many of these small campgrounds consist of a husband and wife doing all the work, or that the short camping season in Canada is only a season. Someone has to pay for the Liberal campaign promises.

This is what the executive director of a camping organization in Ontario had to say:

Campgrounds are active, labour-intensive recreational businesses that provide an affordable vacationing option for Canadian families and international visitors.

These recent Canada Revenue assessments not only put these small, mostly family-owned businesses at risk, but also sends a terrible signal to the entire industry just days before the 2016 camping season is about to begin....

The Canadian Federation of Independent Business has stated that “Requiring five staff to qualify for the small business tax rate is deeply insulting to the entrepreneurs who are often a part of the daily operations of their businesses. It's called the small business tax rate. Being too small should not be a reason to exclude anyone.” It is called paying for bad spending.

The Minister of Finance in his opening remarks regarding Bill C-2 stated the government consulted widely before introducing the measures in his legislation. He claimed to have asked Canadians directly how the government could support them and grow the economy. The Minister of Finance even claimed to have met people from all walks of life, including small business owners. He obviously skipped meeting with any small business entrepreneurs who operate family campgrounds.

As much as I know that the government likes to say it consults Canadians, here are a few comments from average Canadians on how they feel about the federal government going after small family-owned campgrounds to pay for its wild spending.

If a company with fewer than five employees is not a small company, then what is, besides campgrounds that are still reeling from having to charge property tax on seasonal trailers? Surely the CRA must have bigger fish to fry.

There is this comment: “I am not running a passive small business. I am running a business. One that I work seven days a week. My campground is host to campers from Germany, Holland, France, Switzerland and darn near every state and province in North America. Passive I am not. I am however the owner of a small business and I resent that you suggest otherwise in order to rob me or any campground of more tax dollars. I do not believe that small family-run businesses should pay more tax than billion dollar corporate businesses. I, along with my family, have camped most of my life and I'd like to continue doing so.”

As tax collection targets of the Liberal government, imagine the shock of family campground owners when they receive collection letters telling them they no longer are considered small businesses and owe tens of thousands of dollars in reassessed taxes. A campground owner in southwestern Ontario recently received a collection letter stating that he owed $250,000 in reassessed taxes. Another campground owner received a notice of assessment for 2013-14 showing that $36,000 more in taxes was due, plus $250 per month in interest charges alone. Campgrounds will be closing. This move to go after small businesses like family campgrounds is not unexpected.

The second campaign promise to be broken by the Liberal government after breaking the first by blowing the deficit sky-high was to renege on its promise to lower the small business tax rate. The Prime Minister demonstrated his contempt for small business by claiming that small businesses were nothing more than tax scams. He believes they are set up as a way to avoid paying taxes. That comment is an insult to the husband and wife team who work 60 to 70 hour weeks to manage a family campground during the short summer camping season. Camping is family time, getting kids off video games and out into nature and the great outdoors. The last affordable family vacation will now be taken away from Canadians.

Since I brought this change in taxation policy to the attention of the people who would be the most adversely affected by it, I am pleased to recognize the many individual campground owners, as well as the many municipalities, who have expressed their support for any action taken to rescind this unfair taxation.

We are supposed to be more active. What better way to be healthy than spending the day outdoors? Campgrounds are an escape for people who live in urban areas. Not everyone can afford a cottage. These businesses need to be recognized for what they are: small family run businesses. Small business is the backbone of our nation. Canada was built on appreciation for the great outdoors. The government should stop over-taxing and allow our kids to enjoy themselves in nature.

It is truly unfortunate that the first budget of the new regime should be so wrong for Canada. I urge the Liberal Party to really think about the harm it is doing to Canada with its policy of high deficits and raising taxes.

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

Mr. Speaker, there is a natural question that should be asked when a Conservative member speaks to a tax-reducing legislation. We need to make it very clear that Bill C-2 does give tax relief to millions of Canadians. Traditionally, I would have thought the Conservatives would have supported a tax cut. The core of Bill C-2 is just that: a tax cut to Canada's hard-working middle class and those aspiring to be a part of the middle class.

Therefore, as a member of the Conservative Party, does she not believe she should be supporting tax cuts? I would have thought that would be a given. How does she justify to her constituents that she does not support them getting a tax break?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, it is a pleasure to be back in the House. I hope everyone took the time this summer to reconnect with their constituents to find out what was happening in their ridings. I also hope they took a bit of time to enjoy our very short summers in Canada.

It is interesting that we are back here today debating Bill C-2. I noted an article yesterday in which it said that the Liberal government had the most unproductive Parliament in two decades in what it had managed to move forward with. Perhaps Bill C-2 is an example.

Bill C-2 was introduced in December of last year and we are now at third reading. That really illustrates the Liberals' inability to move what they say are important pieces of legislation through the House. However, I would rather have no legislation than bad legislation, which Bill C-2 is.

Because it has been so long, as a quick refresher, Bill C-2 contains a number of measures such as the change in the marginal tax rate, the TFSA reduction in limit, and of course some other things. There are general clean-up measures dealing with such things as charitable donation tax credits and income earned by trust, among others. Clearly what we will hear from the debate is that those clean-up measures are relatively uncontroversial. Really the issues around the marginal tax rate and the TFSAs are the most problematic.

Again today the debate has predominantly focused so far on the Liberals proudly proclaiming that their middle-class tax cut was a significant move forward. However, the Liberals really forgot to tell Canadians two very important things. One is that they never have clearly defined the middle class. I think most Canadians, as they listen to this, might be thinking that as the middle class, members of Parliament will see $700 where people who earn $23 an hour will see nothing.

I will be sharing my time, Mr. Speaker, with the member for Renfrew—Nipissing—Pembroke.

We have a very poorly defined middle class, and I do not think many of us would really call members of Parliament middle class who are deserving of the biggest tax cut. As Conservatives, we certainly support tax cuts in whatever form, but the bigger problem is that tax cut and what it would actually do. The government had a big oops in its math. The Liberals went to Canadians and said they were going to give this tax cut and that it was going to be revenue neutral because they were going to increase taxes for higher income earners. That was the commitment and the promise the Liberals made to Canadians. Lo and behold, they are in government and it is “wow, we've made a really big math error in that particular calculation”. That is an $8.9 billion error that will be over six years. The mistake the Liberals have made is over $1 billion a year.

We also had a commitment that they would have a $10 billion deficit. It has gone to $30 billion now. This is just one of the measures that has added to the deficit that will create problems into the future.

This is not a promise kept. This is a promise that has been broken to Canadians because it is not revenue neutral. It has been said in the past that debt is deferred taxes. For the $600 or $700 to someone who earns $160,000 a year, their children and grandchildren will have to pay. To be quite frank, the government is irresponsible to put that kind of debt and deficit on our children and grandchildren when it is not necessary. It is quite shameful.

The other piece I want to focus some comments on is the tax-free savings account. There really is no justification for the way the Liberals have structured their marginal tax reduction. They have reduced the ability to contribute to a tax-free savings account from $10,000 down to $5,000 plus a bit of change.

Let me talk about what the tax-free savings account is all about. This is from a Department of Finance document that looks at tax expenditures and evaluations.

It states:

Ensuring that the tax system provides meaningful incentives to save supports a more efficient allocation between current and future consumption. In particular, the accumulation of personal savings allows Canadians to improve their living standards and better align income and consumption when planning for important life events such as retirement [or purchasing a house]....[It is] increasing the funds available for capital investment, which leads to a higher capacity to produce goods and services.

The evidence from the program shows that Canadians have taken advantage of these tax savings opportunities. It is a popular means of saving for Canadians of all ages. I would commend to anyone who is interested in the TFSA and its impact. This is an excellent document, and it certainly talks about the benefits.

What is the Liberals' argument with respect to why they had to reduce the tax-free savings account? They said that it was only benefiting the rich, that not everyone could put money into it and therefore it was not a good thing to do.

There are 440,000 GIS recipients who have put $4.3 billion into their tax-free savings accounts. That gives us a really good example. I think anyone could imagine that living on old age security and the guaranteed income supplement is a challenge for any senior. However, let us say that there are seniors who have a house but really no major means of support. They then sell their houses and have tiny nest eggs that they can put into their tax-free savings accounts and have the interest that they make to support them during their retirement and very difficult times. Having that allocation is a very important mechanism for seniors putting a little from the sale of a house into a GIS, or young people in Vancouver or Toronto. Right now we know how difficult it is for young people to get into the housing market. Therefore, it is a real step backward and a real shame to see the measures the government has taken in that area.

The Liberals do not like allowing us the personal freedom to make choices about our own money. They want to enforce an increase in the Canada pension plan, which will not only enforce increased contributions from individuals but also employers. They like a plan that the government controls. For some reason they are adversely opposed to plans that Canadians control. Perhaps if people do not want to put extra money into the CPP, they see the TFSA as an opportunity to put money into their savings. Therefore, there is not a one size fits all.

I am very concerned that the government is showing a massive predisposition toward spending taxpayer money that it does not have, deficits, debt, and creating a one-size-fits-all government-run program that is not good for meeting the needs of Canadians in all of their diversities.

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

Mr. Speaker, I believe the member is not doing himself or his party a favour in the way he portrays the legislation or the Government of Canada's agenda. The budget came forward and Bill C-2 came forward. Bill C-2 specifically deals with a tax cut, between the brackets of $45,000 and $90,000, from 22% to 20.5%. It would also implement a tax increase, for those who make over $200,000, from 29% to 33%. What we are going to be voting on is that aspect.

The member wanted to focus on the fact that the Government of Canada has left out others. We see in the budget the Canada child benefit, which helps most of the individuals he says the Liberal government has fallen short on. His facts are just not correct, when we look at the budget combined with the legislation. The issue is whether the member supports the middle class getting a tax decrease and those making more than $200,000 an increase. That is the essence.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it is a pleasure to rise in the House today to speak to this important bill and to welcome all members back to the House on the first day of the resumption of Parliament. I hope all of my colleagues had a good summer and are ready to get back to work on behalf of Canadians in all of our ridings.

Bill C-2 received first reading in the House on December 9, 2015, following the adoption of a ways and means motion. At that time the New Democratic Party voted in favour of Bill C-2 at second reading in order to be able to propose our amendments to make the bill progressive and actually conform to the rhetoric that accompanied it both during the election and in the House at that time.

Despite the support of various stakeholders, our amendments at committee were rejected. Therefore, we cannot support the bill at third reading as it currently stands and will be opposing the bill.

Bill C-2 amends certain provisions of the Income Tax Act, such as the tax credit for gifts, taxation on income splitting, the tax payable by a non-testamentary trust, the refundable tax on investment income, private corporations, the tax on assessable dividends, the limit on TFSAs or tax-free savings accounts, and most important, the tax rates Canadians pay on their income in this country.

The New Democrats stated our position on the two significant elements of Bill C-2: the amendment on the income tax rates and the amended TFSA limit. Our approach was careful and principled then, and it is careful and thoughtful now. Although we support the government's proposal to limit the TFSA contributions to $5,500, we cannot accept the amendments of the Liberal government to the tax rates, which will primarily benefit the wealthiest.

Let me put this in some context. After almost a decade of poor economic growth and misguided management by the previous Conservative government, working-class and middle-class Canadians and their families are working harder than ever, yet falling further behind. What Canada needs now is a government that will fight against this pattern and this direction, against growing inequalities. However, we find, when we analyze the provisions of the bill and the way the government is using tax rates, that the Liberals will do just the opposite.

The Liberals have continually said they have a plan to help Canadians, middle class and otherwise. They promised change: rapid, urgent, and positive change. However, since they came to power, the Liberals have largely ignored Canada's real middle class, and certainly, as I will show hon. members with numbers, they have absolutely ignored Canada's working class and low-income earners with the bill.

Bill C-2 should have been the Liberals' opportunity to move from rhetoric to action. Unfortunately, that is not what happened. The Liberals' tax plan gives nothing to 60% of Canadians. I listened carefully to my friend from Winnipeg on the other side, who invited us to take the bill to Canada's next election. When two-thirds of Canadians do not receive a red penny from these tax changes, and when they see that people earning more than $89,000 in this country receive the lion's share of these tax cuts while over 17 million Canadians do not receive a cent, I would be happy to take this into the election and debate my hon. friend on who the bill really benefits.

The government is proving every day to be one of celebrity, one of rhetoric, one of spin. Let us look at something surprising. Let us look at facts. Let us look at the numbers. The government is proposing to reduce the second personal income tax rate in this country from 22% to 20.5% and to increase the tax rate to those earning more than $200,000 from 29% to 33%.

This is how Canada's tax rates will look as a result of the bill. If people make $45,282 or less of taxable income, the current rate is 15% and the new rate would be 15%. They receive zero tax breaks from the bill. If people make between $45,282 and $90,563, the next bracket of taxable income, they get a tax cut of 1.5%. From $90,563 to $140,388, the tax rate is the same. From $140,388 to $200,000, the tax rate is the same. For more than $200,000, as I say, the tax rate would go from 29% to 33%.

An analysis of this Liberal tax plan reveals that it is in fact the wealthiest Canadians who will benefit the most from the tax reduction program. The Prime Minister's tax plan excludes Canadians who are not in the second income tax bracket, the large majority of Canadians who earn less than $45,000.

No one has to listen to me and we certainly should not listen to the spin doctors on the government side of the House, so let us see what the parliamentary budget officer says. The PBO's office said it is estimated that 17.9 million Canadians who will file income tax returns in 2016 fall within the first tax bracket. They have taxable income and will report taxable income of less than $45,282, and will, therefore, fall below the threshold set by the Liberals to benefit from any tax adjustment. Therefore, the Liberal tax proposal excludes the lowest 60% of wage earners, anybody making under $45,282.

According to the latest statistics available from Statistics Canada, the average Canadian income is $40,000, while the median income is $31,000. That means 50% of Canadians make $31,000 or less. Canadians in this country most in need, those whose incomes are equal to or less than the median or average incomes, will not benefit in any way from this Liberal plan. In fact, only people in the first, second, or third income deciles will see a drop in their taxes.

My hon. colleague on the other side of the House from Winnipeg North also mentioned that the best thing we can do for small businesses is to provide them with consumers. Every economist in the world will say that the people who spend the most of their disposable incomes are the working poor. They cannot afford to save. Every dollar given to a working poor Canadian is a dollar that will be circulated in the economy and spent at every business in our communities, yet the government has not given a penny to two-thirds of Canadians to spend in their communities or in small businesses. Why the government thinks that this proposal is going to stimulate small business, when two-thirds of Canadians will not have a penny in their pockets to spend in their communities or in small businesses, is beyond me.

Let us look at it the other way. Canadians whose income ranks in the highest 30% will be the main beneficiaries, while the wealthiest 10% of Canadians will pocket most of the money from these tax reductions. Even with the income tax increase for those earning more than $200,000, the Liberal plan still offers benefits that are three times higher for people earning $210,000 or more a year than for people earning $50,000.

An income tax reduction for the middle class should benefit a larger proportion of Canadians, in New Democrats' view. That is not the case with the bill. Full-time workers earning less than $23 an hour, which in my riding of Vancouver Kingsway is most people, will get no tax reduction, while those earning $100 an hour will get the maximum tax reduction. That is a funny middle-class tax plan from the Liberals.

Using numbers from the Government of Canada's job bank, let us turn again to another objective source that has illustrated who would benefit from these changes.

An office worker who has a median hourly rate of pay of $19 an hour would get zero from this tax plan. A hairdresser who has a median income of $13.25 an hour would get zero from this tax plan. A fish plant worker who averages $12.50 an hour in median income would get zero from this tax plan. A bank teller who averages $17.20 an hour in median income would get zero from this tax plan. A school bus driver who averages $20 an hour would get zero from the Liberals. A child care worker who makes $17.35 an hour in median income would get zero from the Liberals. The Prime Minister's nanny, who makes $18.20 an hour, would get zero from the Liberals. Even the Prime Minister's assistant chef, who makes $20 to $21.68 an hour, would get nothing from the Liberals.

Let us see who does get money from the Liberal tax plan. A lawyer who averages a median hourly income of $53.91 would get $679.22 courtesy of the Liberals.

A member of Parliament, who is hardly middle class when we make $170,000 a year base income, will receive $679.22. Let us stop and contrast that. A member of Parliament gets money back from the government, almost $700, and officer workers, child care workers, and school bus drivers get nothing.

That is the proposal from the Liberal government to make Canada's tax system fairer. I do not believe that any Canadian who hears those contrasts will agree that it makes our tax system any fairer.

Contrary to what the Liberals claimed during the election campaign, the revenues generated by the tax increase for the very wealthy will not be enough to finance their plan.

I notice that the Liberals consistently refuse to answer questions put by the Conservative opposition and the New Democrats to actually hold them accountable for the promise they made to Canadians during the election.

On this side of the House, at least, we believe that candidates ought to tell the truth to Canadians during elections. What the Liberals said to Canadians was that if they were elected, the tax cuts for the middle class would be revenue neutral and would be paid for by a tax increase for the wealthiest Canadians. They told Canadians that directly.

After the election, it turned out that the Liberals were out by billions of dollars. It has been estimated that some $7 billion of excess money will have to be borrowed to pay for the tax cut, because in fact, the Liberal math was wrong.

In terms of Vancouver Kingsway, I have done my homework. According to Statistics Canada figures from 2010, in my riding roughly 70% of individual income earners will see absolutely no benefit from this cut, because they do not report income over $45,282. In my riding, we have 25,635 people who reported income of over $45,000 and 58,480 who reported income of under $45,282. The median income in my riding of Vancouver Kingsway is $22,614, and the average income is $30,639.

I think my riding is typical of most members' ridings across this country. Let us forget the spin about the middle class and the spin by the Liberal government that everyone is going to do better. The numbers tell the truth, and that is that most Canadians will actually not see a dime from this tax proposal, but wealthy Canadians will.

I want to just turn to something that has not been mentioned, which is the gender impact. It is well known in this country that women, still in 2016, earn significantly less money than men do. It is well known in this country that women who work full time earn less than their male counterparts.

The numbers I found for Vancouver Kingsway bear that out. The median income for men in my riding is $25,532. It is $20,303 for women. It is a full $5,000 less. What that means is that this bill, which exacerbates the inequity between wealthy Canadians and poorer, working, and middle-class Canadians, is going to have a disproportionately bad impact on women.

I was at a conference a couple of days ago when the Prime Minister stood up and said, “Poverty is sexist.” That is true, but then his government, in this House, puts a bill in that will change the tax rates in this country that will disproportionately give advantages to men and disproportionately harm women because of the skewed nature of the tax changes.

I want to mention the changes to the TFSA contribution limit. On this, the NDP does agree with the government. The Conservatives wanted to raise the annual TFSA limit from $5,500 to $10,000. The Liberals, to their credit, campaigned against that during the election, and the New Democrats agreed with that. There are a number of reasons for that. The bottom line is basically that the TFSA, by increasing the amount of money individual Canadians can shelter from taxes, is a cost to the treasury. A cost to the treasury means that it takes revenue from the government needed to pay for much-needed programs that the New Democrats will fight for in this Parliament, like pharmacare, child care, and health care.

Moreover, it has been shown that because investors in our country can take already established investments and shift them to TFSAs, most people, by and large, putting money into TFSAs are not making new investments. They are simply shifting investments.

Finally, I do not know too many Canadians who have an extra $10,000 this year they can put into TFSAs.

I want to comment a bit about the New Democrats' plan and what we would do.

If we really want to make a difference in the country, we have to make an adjustment to the first tax rate. What the New Democrats proposed during the election, and what we suggest to this government, was that we would reduce the income tax rate for the first $45,282 of income from 15% to 14%. That way, 83% of taxpayers would see a change in the amount of tax payable. According to the parliamentary budget officer, nine million Canadians would benefit from this proposal who do not benefit from the proposal of the current government. This solution would not only benefit more taxpayers but the cost difference would be minimal. The difference, we would argue, could be easily recovered through a very slight half-percentage point increase in taxes for large corporations.

I would point out that the Liberals are indistinguishable from the Conservatives on this score. Canada already has an extremely low corporate tax rate of 15% for large, profitable corporations, and neither of those two parties proposes altering that at all. If we were to increase that by half a point, from 15% to 15.5%, for companies like the Royal Bank and Imperial Oil, large profitable companies that are making a lot of money in the country, we could actually put more money in the hands of working-class Canadians, who would then circulate that money in the economy and help stimulate small business, which, the New Democrats believe, deserve a corporate tax cut. That is not what the Liberals and Conservatives believe, though.

David Macdonald at the Canadian Centre for Policy Alternatives, Nicolas Zorn of l'Institut du Nouveau Monde, Stephen Gordon, an economics professor at Laval University, and Luc Godbout, professor and holder of the research chair on taxation and public finance at the University of Sherbrooke, are all absolutely ad idem on this issue. They have all crunched the numbers, and they all say the same thing: this amendment to Canada's tax laws would benefit the wealthy, would do nothing for the poorest Canadians, and is bad economic policy.

The New Democrats will stand in the House and continue to fight against this bad policy and fight for the millions of Canadians who deserve some tax relief and support from the government, as opposed to spin and rhetoric from a government that is more interested in celebrity and style than in actually helping the millions of Canadians from coast to coast to coast who are suffering in this economy.

[Yvonne Jones, Liberal, Parliamentary Secretary to the Minister of Indigenous and Northern Affairs]

Mr. Speaker, it is a pleasure for me to speak to Bill C-2. I thank my colleague from Winnipeg North for sharing his time with me today.

Bill C-2 would amend the Income Tax Act. It falls in line with what the Liberal Party said during the election campaign and what the Prime Minister said in subsequent days. Bill C-2 would reduce the personal income tax of many Canadians and allow them to have more money in their pockets. It also introduces new marginal tax increases to people at higher taxable income levels. Why anyone in the House of Commons would not want to support that is beyond me. Bill C-2 would allow more money to be held by families who need it, families in the middle-class tax bracket.

Bill C-2 is a good piece of legislation. It is good because it will help many middle-class families, and many income earners who fall into this bracket, to move forward and do things in their lives that they have not been able to because they were in higher tax brackets, losing more of their money and not being able to catch up.

With Bill C-2, our government is allowing middle-class families and income earners to catch up. We are giving them the break they deserve, and this is what Canadians want. It was a large part of the platform of the Liberal Party of Canada in the election. Canadians had an opportunity to have their voices heard at the ballot box, and they chose to have reforms made to the income tax legislation that would allow the middle class in this country to move forward. That is exactly what we are doing.

We are making changes around direct income tax adjustments and allowing more income tax earners to be in a lesser tax bracket. Higher income earners will pay a little more, which we asked them to do in a friendly way and they agreed. We also introduced the child tax benefit in July of this year. This Liberal government initiative allows more families to gain more money in child care benefits that are tax free. They no longer have to incorporate these benefits as part of their income, which was required by the former government and gave them less money in their pocket.

Our government is making that child care benefit tax free. We are bringing more balance to the child care benefit to ensure that families who need that benefit to care for their children will actually get the benefit. This means that people in the higher income bracket will be eliminated from the child care benefit. They can take comfort in knowing that those with lower incomes who need the money to support their children in their initiatives, schooling, careers, and in their lives, will have a little extra money to do that. This is about bringing more fairness and balance to Canadians right across the country.

The other thing we have done to complement the changes we are proposing in the Income Tax Act, besides the child care benefit, is the increase in the guaranteed income supplement for single seniors. This was a huge issue in the election campaign from aging individuals in our country who felt they needed an increase in their supplement to allow them to support themselves, especially widows and widowers. We introduced that benefit, which is going to help them substantially.

We also made improvements to the employment insurance program. We expanded it to include regions that were the hardest hit in the country at the time, including Newfoundland and Labrador, the province in which I live, and also Alberta. These two provinces have been going through huge transitions.

In addition to the income tax breaks, the child care benefits, and the increase in the guaranteed income supplement, we provided a reprieve for workers who have found themselves unemployed. We were able to make changes to the employment insurance program to help them in a difficult time.

However, we also need to look at how we are investing in capital infrastructure, which complements the strategy of where the government is going in lifting up people in our country and ensuring there is a greater balance.

When we look around the country today, we see in the first year of our mandate that we have already been investing money in transit, transportation, housing, and infrastructure, which the country has needed for a very long time. This is not just an investment for today but ensuring economic prosperity for the regions in which we are investing this money. That in itself is creating new opportunity and new jobs for people in many regions of the country, and they are seeing the benefits very quickly. They are seeing it in their homes, their pockets, and in their communities. I think that is very important.

The changes we are making to the income tax legislation, as I said, will ensure that those people who were at a personal income tax rate of over $45,000 a year will drop from 22% taxation to 20.5%. We will also introduce a new personal marginal tax rate of 33%, which will be for those with taxable income in excess of $200,000 a year.

The opposition members are critical because they know that what we are doing is right. It is the right direction to take. They also know that what we are doing is benefiting families. They had the opportunity to do this but chose not to. They chose to distribute the investments of the country in a different way. They provided more income relief for wealthy income earners than they did for low and middle-class income earners. We have chosen a different route. Our route is creating a better balance for Canadians right across the country.

I represent a riding that falls in the middle income level. I define that middle income level as people who make $40,000 to $45,000 a year to $100,000 a year. They are the people who work in our factories, mines, hydro power projects, schools, hospitals, firefighting and policing services. These are the middle-class earners of Canada.

We are saying to them that we recognize that over the last 10 years they have been falling behind and that we are now going to allow them an opportunity to start catching up, be a stronger part of the middle class, and ensure that their families have that opportunity. We are doing it through our income tax reductions, child care benefit, guaranteed income supplement to seniors, and our investment infrastructure programs, which are helping communities, businesses, and Canadians right across the country.

I would suggest that there is no member of Parliament that has any reason or rationale not to support the changes we are proposing to allow middle-class families to have more money in their pockets.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, when we looked at how we could deliver the most effective tax change that would assist Canada's middle class, it was determined that Bill C-2 would be the easiest and most effective way of putting money back into the pockets of Canada's middle class.

If we contrast that to the tax incentive that the Conservatives were talking about in terms of increasing it, there are two distinct approaches. I would argue that our approach is far more direct and that millions of Canadians will benefit by it, which is far greater than what was proposed by the previous government.

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

Mr. Speaker, I will be sharing my time with my colleague from Labrador, which means I only will have 10 minutes to speak to a very important legislation.

This is where the previous Conservative government really lost touch. The Conservatives were out of touch with Canadians and real people, and that it ultimately led to the current Prime Minister. Even before he became the leader of the Liberal Party, he talked about the importance of Canada's middle class. The Prime Minister has been consistent throughout not only his leadership, but even prior to it in saying how important Canada's middle class is to our economy and to Canada's future prosperity. The Conservative government never really understood that. One only needs to look across the way to see how those members have voted on this legislation. I would challenge them to revisit the way they voted on the passage of Bill C-2 at second reading, and listen to what Canadians are telling them. If they are really in touch with Canadians, they will appreciate what Bill C-2 is all about. Not only that, it goes even beyond Bill C-2. It is about Canada's middle class and those who want to become a part of it.

I have been a parliamentarian at the provincial or federal levels now for 25-plus years. Never before have I seen a government so determined to have an impact on Canada's middle class. That is why it is with great enthusiasm that I highly recommend to all members, no matter what their political affiliation, to get behind Bill C-2 and vote in favour of it. If they understand how the economy works, I believe they will recognize how important it is that the middle class be supported. Let me give an example. If a middle class is given a tax break or is enriched, we will have a healthier economy. How does that work? If there is more money in the pockets of average Canadians, that means they have more disposable income to invest in our economy.

There is an immense amount of literature and there are many arguments put forward to tell us that if the middle class has confidence in the economy and they have money in their pockets, they will spend that money. By spending that money, we then enrich and afford small businesses and so many others the opportunity to do that much better.

I find it interesting. Whether from the Conservatives or the New Democrats, and at times we get confused messages coming from those two parties, there seems to be a consistent message in their fight to resist Bill C-2, which I do not quite understand. One of the things they ask us is why the government does not support small businesses. This bill would do more to support Canada's small businesses than anything the previous Harper government did in its ten years. It would put that money back into the pockets of people. By doing that, people would be spend. We can ask small business owners, as I have done, as have many of my colleagues who have canvassed their constituents over the summer in a very real and tangible way. They will tell us that the best thing we can give a small business is not necessarily a tax break, but a consumer. Small business owners want people going into their stores, buying their products and consuming them.

Bill C-2 is all about that. It would give a significant amount of money to Canada's middle class. Ultimately it is not just talk; it was the first piece of legislation that the Prime Minister introduced to the House of Commons, and it was implemented on January 1. Not only did we want to give the middle class that tax break, we also wanted it to take effect as soon as possible. We saw that in the implementation of the government's policy. It was a substantial election platform promise made to Canadians. The Prime Minister and this government are materializing on that promise. We should recognize this valuable legislation. It reflects what Canadians want and is something on which the government is delivering.

Other criticisms on Bill C-2 have nothing to do with the bill. The New Democrats ask about those who make less than the threshold to get the tax break. It is important to recognize that over nine million Canadians will benefit by this tax break. The NDP refuses to acknowledge that this is step one of a number of steps. All my NDP friends need to look at is the Canada child benefit. Some of Canada's poorest families are getting significant increases in child support. We would have to look a long way back before we would see a government taking such a strong social commitment to lifting children out of poverty. Hundreds of thousands of children are being lifted out of poverty because of the Canada child tax benefit. That tax-free money is already being sent to families across this nation.

That is just one aspect to help those with low incomes who want to become part of Canada's middle class. What about the other most vulnerable, our seniors? Some of the most vulnerable seniors are easily identified through the guaranteed income supplement. We saw a significant increase in the last budget for seniors. I believe some of them will receive an additional $900 per year. If people are in a poverty situation and receive the GIS, that $900 is the equivalent of thousands of dollars to individuals making $100,000 per year. It is a significant increase for those vulnerable seniors. Through Bill C-2, they see a government that truly cares and is prepared to invest in Canada's middle class, but we have not forgotten about our most vulnerable such as children and seniors, in particular those who are on the guaranteed income supplement.

We have seen a redistribution of wealth that we have not seen in many decades. The bill is in part made possible because of a new tax for those Canadians making more than $200,000 taxable income per year. There is that expectation from this government. It is making our system that much fairer.

When we look at Bill C-2, I would like to think the commitment to that tax break is being fulfilled here.

I started off by saying that the Conservatives have lost touch. They can demonstrate that they are listening to Canadians by voting in favour of Bill C-2.

(The House resumed at 12 noon.)

The House resumed from June 17 consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.

[John Barlow, Conservative, Foothills, AB]

New York, I am sorry. Thanks for that correction.

The Liberal government has said that it wants to cut the tax-free savings account, so again we are going to be talking today about the impact and what it truly means for Canadians. The tax-free savings account, I know from speaking to residents in Foothills in southern Alberta, was something many of them embraced. They felt that it was an outstanding opportunity for them to save. In fact, 11 million Canadians accessed the tax-free savings account.

Instead, the Liberal government has taken away another voluntary option for Canadians to save for whatever they feel is most important to them. It could be a house, children's education, or, yes, retirement. Instead, after reducing the tax-free savings account limit from $10,000 down to its original $5,500, the government would like to replace that with a mandatory CPP tax, which would be a tax of more than $4,000 for the average Canadian worker, as well as an additional tax on small business owners. When Liberals say Canadians will have these benefits, if they do not have jobs, they will not pay any taxes. They will be more of a burden on the social system.

Liberals also want a job-killing carbon tax. We have talked about that several times this week. In Alberta, in the month of May alone, another 24,000 jobs were lost. There are 24,000 more Albertans out of work. The unemployment rate in Alberta is now 7.9%, the highest it has been since the national energy program was brought forward by the Liberals in the 1980s, with no relief in sight.

In question period today, I talked about Ritchie Bros., one of the largest auction operations in Alberta, last month having what was supposed to be a two-day auction sale. It ended up being five days, and it sold more than $240 million in industrial commercial equipment that went south to the United States. With the equipment that goes south to the United States, so do the jobs that go with that equipment, or they disappeared in Canada entirely.

Over the past year, half a billion dollars in oil sands equipment has been sold, and the vast majority of it has gone south of the border. On top of that, $50 billion in investment has left Alberta. That shows the impact that Albertans are feeling right now. We expect the unemployment rate to exceed 8% over the next year. I do not think this is the time to be joking about that $1-a-day middle-class tax cut, which actually only benefits those making over $100,000, many who have now lost their jobs entirely, or to be joking about introducing a carbon tax, which would increase the cost of literally everything that an average Canadian is trying to pay.

The government wants to bring in a mandatory CPP tax, while taking away an option that Canadians have to make the choices that they feel are best for them, which is the tax-free savings account. I appreciate that it is still going to exist, but it is not going to have the limit that Conservatives had offered before.

Let us put that in perspective. Over the last six months, the Liberal government has talked about a middle-class tax cut, which is not really a tax cut at all because it is not revenue neutral. It is going to cost close to $9 billion over the next six years. It wants to establish a mandatory CPP tax, which will impact Canadians and small business owners, our job creators, and now it is talking about a carbon tax. That is really a tax on top of a tax, because 80% of Canadian jurisdictions already have a carbon tax at the provincial level. Therefore, why would we add yet another tax on Canadians?

Putting it into perspective, over the Conservatives' 10 years in government, we reduced taxes more than 150 times. Canadians had the lowest tax burden they have had in 50 years. The average Canadian family was saving more than $7,000 a year on their taxes. Those tax advantages will be gone almost entirely with a CPP tax, which would cost more than $4,000 for the average Canadian.

I am sure we will hear the argument today from my colleagues on the other side that the tax-free savings account was simply just a tax haven for the wealthy. We also heard from my esteemed colleague from Carleton that is simply not the case.

People earning $80,000 a year or less accounted for 80% of those who had a tax-free savings account, and of 60% of the individuals who contributed the maximum of $5,500, the vast majority of them had annual earnings of less than $60,000.

As a Canadian, I do not feel that $60,000 a year is wealthy or anything close to wealth. That is just the average hard-working Canadian who is making certainly difficult decisions for whatever they feel is best for them and their families, whether it is a down payment on a house, saving for their children's education, or saving for their retirement.

I believe that reducing the tax-free savings account is a step backwards. I do not think it is something that will benefit Canadians. This was a savings mechanism that was extremely flexible and allowed Canadians to make the choices they felt were best for them and their families.

I want to jump ahead a bit and talk again about what our Prime Minister said during the election. During the election, he said repeatedly that the $3 billion tax cut for middle-class earners was for a $3 billion increase on high-income earners. We said before that this simply is not the case. This will actually cost Canadians close to $9 billion a year. That just shows that in six months, there has been broken promise after broken promise by the Liberal government . The Liberals are simply trying to regress some of the tax advantages and things we were able to change.

In conclusion, I would encourage all members of the House to vote against Bill C-2, because it reverses some of the great tax advantages that we were able to offer Canadians over the last few years, including the lowest tax burden on Canadians in 50 years.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, it is a pleasure to rise today to speak on Bill C-2, an act to amend the Income Tax Act.

We have talked a lot today already about some of the changes that are going to be coming forward with this. However, I would like to tell a personal story about why I feel that this is important to speak about today.

I remember vividly, in 2006, my wife and I were in a small southern Alberta town. I would say that we were a low to middle-income family. We had three children: one in hockey, one in volleyball, and one in dance. I remember when the children's fitness tax credit was first introduced by the Conservative government, and what a godsend that was to me and my family to be able to cover a substantial part of the costs for my children's activities.

Then, last year, when we put forward a plan to double the children's fitness tax credit from $500 to $1,000, I went to as many doors as possible in my riding to talk about this program with my constituents. It was incredible how many families, especially young parents, spoke to us about how important this program was to ensure they were able to keep their children healthy, active, and enjoying some of the activities.

There is a reason that programs such as KidSport, the United Way, and Boys and Girls Clubs are so popular. It is a reality that lower-income families have a difficult time being able to afford the costs of some programs.

The children's fitness tax credit was a program that impacted just about every single Canadian family with children. It was extremely disappointing to see that the Liberal government has eliminated that program. I have had profound feedback from residents in my Foothills riding who are extremely upset with that change.

We will hear from the members opposite that the reason they got rid of programs, like the children's fitness tax credit and the post-secondary school book tax credit, was that they were going to be more generous on the side of other programs and the middle-class tax cut. It was going to be revolutionary for Canadian families. This was going to be something that was a life-altering change for Canadian families.

However, let us put it in perspective. According to Finance Canada, the average impact to Canadian families with the middle-class tax cut is $6.34 a week. That is less than $1 a day. That is what the impact on the average Canadian family is going to be. The government is eliminating the children's fitness tax credit, the universal child care benefit, and those types of programs.I find it interesting that the Liberals find $1 a day to be revolutionary. I am pretty positive that I can say for my family that $1 a day is anything but revolutionary.

We were kind of joking a little in question period, but I found it interesting that the Minister of International Development was laughing at the fact that we were asking about $17 for a glass a juice. We, on this side of the House, are here to protect the Canadian taxpayer. Every single dollar has an impact on their lives, their jobs, and their families. Paying $17 for a glass of juice, or $5,000 on tips and gratuities for two days, is certainly worth asking about. For Liberals to say that $6.34 a week, less than $1 day, is somehow revolutionary and is going to lift up 9 million families out of poverty, or 9,000 children out of poverty, or whatever the number, is pretty coy.

The money will either have to be drawn from or reduced from the public services and the tax base. I would say that the spending plans of the Liberal government are risky at best. We have seen no concrete proof that these tax cuts, which the Liberals initially said during the election were going to be revenue neutral, are that in fact.

The tax breaks they introduced were going to be revenue neutral and revolutionary, but in fact are going to cost Canadians more than $8 billion over the next six years. It is not really a tax cut at all, because they are going into very severe deficits to do these things. The amount of $9 billion dollars over the next six years is not a tax cut in my estimation.

Again, as part of that election platform, the deficit was going to be around a $10 billion mark. Now we are beyond that, three times beyond that. The four-year plan that the Liberals tabled as part of the budget in 2016 has absolutely no plan to get out of that massive deficit spin. It is a downward spiral. It is a massive deficit with absolutely no plan to get us out of it.

To have $30 billion deficits year after year, and then laugh about overspending on trips to Washington, shows the arrogance of the Liberal government.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Mr. Speaker, I will be splitting my time with my colleague, the member for Carleton, so I ask that members stick around, because I am going to give a speech, but he is going to give an excellent speech.

Thank you, Mr. Speaker, for the opportunity to speak to Bill C-2, to talk about the government's financial record and the challenges I see presented with its financial vision.

I come from Alberta. I am a proud Albertan, and I am proud to defend the people I represent. I am also proud of the people who have built our local economies within the communities I represent. They are the bedrock of the communities across the province of Alberta, across western Canada, and contribute so much to the economy of our nation from coast to coast.

One of the things I have noticed with the Liberal economic plan is that there seems to be no long-term perspective as to how it is going to create jobs and drive the economy. The Liberals talk a lot about things like creating jobs and providing opportunity for people to move from lower income to middle income. Of course, they do use the terms of class, which as my colleague from Calgary referenced, is probably offensive to a lot of people who are workers in our country. The concern I have is the Liberals keep talking a good game, but they have not demonstrated a plan that is coherent in any way. As a matter of fact, the bill we are debating today probably establishes for all of us that that is the case.

They talk about it being a tax cut for people who need it most. Of course, what we do note is that those who need it in our country most are actually not able to benefit from the provisions in the bill. Lower-income Canadians are not included. As a matter of fact, there is nothing in the bill that provides any assistance to lower-income Canadians.

There is also a major hit against senior citizens. Just this last week, we heard it said that the Liberals are looking at a plan to increase CPP contributions. As my colleague just referenced, this in fact would be a payroll tax. Not only does it establish a problem for those income earners who would have an additional amount of money taken off their paycheque, it would also mean that small business owners would have to pay additional taxes to help support a CPP increase.

Let us just think about this a little. A CPP increase today would not benefit seniors today. It would not benefit those people who are in their later years and who most desperately need support today. The hope is that if money is put aside today, seniors in decades to come would benefit from those increased contributions. That is a debate to be had, but let us be clear, this would benefit no senior who is a senior today. It also would not help those people who will become seniors and start drawing pensions in the next number of years. We are talking about a Liberal plan to start taxing small businesses, workers, and families today in the hopes that some day there may be a benefit to people down the road. It is not about seniors who are struggling today.

One provision that we as a government instituted was the tax-free savings account. Having looked at the evidence, what we note is the people who were most likely to use the full allocation of the tax-free savings accounts were low-income senior citizens, those people who were having to withdraw money from RIFs or different types of savings plans. The tax-free savings account was a vehicle that created all kinds of opportunities for senior citizens to manage their retirement money. It allowed senior citizens to put money in and withdraw money without any tax implications. They could manage it, and withdraw money as they needed, to address their needs. They could withdraw it if they had a medical emergency and all of a sudden needed to pull out some money for travel, or if they wanted to go on a vacation they were able to withdraw that money without having to take any kind of a penalty.

The Liberals have gone after senior citizens by cutting down the tax-free savings account at the same time that they are telling Canadians they are concerned about seniors, but they have no plan that would benefit seniors today or people who will become seniors in the next number of years.

I am also concerned about the Liberals' plan for families. I did reference the fact that I come from Alberta and I represent people who are in the resource sector, those who work hard every day, play by the rules, pay their taxes, and contribute to our communities. They have had some of the worst years of their lives over the last couple of years.

Obviously, all governments and all parties recognize that we in Parliament do not control the price of energy in the world. Regardless who is in power, there are going to be some troubles with regard to small and larger businesses and to those who are employed in the resource sector.

We know that the Liberal government can make it better or worse for those people who work in the energy sector. Let us be honest, Liberals have made it significantly worse, creating uncertainty in the marketplace, such that companies refuse to invest in Canada because they are uncertain about things like carbon taxes. They are uncertain whether they are going to be able to get products to market.

When the Liberals continue to place hurdles in the way of the development of the energy east pipeline and the TransCanada pipeline, when they continue to play politics with some of the most important nation building infrastructure, which will cost the taxpayer zero dollars as this is private sector investment, when the Liberals continue to create hurdles to see that infrastructure built, my constituents are hurt.

The reason they are hurt is because many of them are employed in the energy sector or have businesses that are secondary industries within the resource sector, that are looking toward the future. The companies are saying they are not going to invest in a place where there is so much uncertainty. The Liberals' announcements that they are going to create difficulty for pipelines to be built and their commitment to continue a job-killing carbon tax hurt.

There is a document that came out this morning from the Alberta government that is an assessment simply on the provincial portion of the carbon tax, not of the federal government's carbon tax that it promised, which will be in addition to any provincial carbon tax. The government's analysis itself says that it will cause 15,000 job losses, it will take $4 billion out of the household income of Albertans, so not only is the government taxing them more, it is also going to reduce their income. If there is going to be $4 billion taken out of the household income of Albertans with a provincial carbon tax, one can only imagine how much additional money will come out of household incomes of Albertans when the Liberals get their hands on a cash grab from the province of Alberta as well.

The Liberals' plan has been completely incoherent. We have established that. They have said they are going to support seniors, yet they are taking vehicles away for seniors to actually save. They have said they are going to help people move from lower income to higher income, yet they are taxing those families at every turn, creating disincentive for investment in provinces like Alberta and other provinces that depend on the energy sector. They are continuing to increase payroll taxes on those same small business owners, creating disincentive to create more jobs. The incoherence of the Liberal economic plan is not only challenging, it is actually creating such difficulty for people who live in communities like mine.

There is an urgency for the Liberals to change course. We would ask the Liberals to look at the facts and the evidence and start to respond to the needs of Albertans and all Canadians to ensure that we can build an economy that will prosper for generations to come.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I think my colleague from Calgary Signal Hill had a premonition and knew that I was going to rise and ask him a question. This actually gives me a chance to respond to a point the member for Gatineau just made.

It is not that we support additional tax cuts, but we are in favour of a real tax cut for the middle class, which is not what Bill C-2 proposes. We proposed a tax cut that would apply to annual income beginning at $11,000, rather than $45,000. That would cover 80% of Canadians, rather than just 9 million out of the 25 million or 28 million taxpayers in Canada right now. I just wanted to correct my colleague's comment.

However, I also have a question for my colleague from Calgary Signal Hill, since we disagree on some of the points in the bill. We agree with the Liberals that the TFSA limit should be lowered. We know that the Conservatives want a higher limit, set at $10,000.

Then again, one thing my colleague and I do agree on is the definition of “middle class”, which, seems to us, is not the same as the Liberals' definition. If we look at the tax cut that is set out in this bill, anyone who earns less than $23 an hour will not benefit at all.

I would like my colleague to say a few words about what constitutes the definition of middle class and why the Liberals are trying to make political hay out of an issue that, according to their own interpretation, does not correspond whatsoever to reality?

The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.

[Erin Weir, NDP, Regina—Lewvan, SK]

They are free to applaud that, Madam Speaker.

Of, course, the flip side of that is that we do not have enough resources to fund important public services and necessary infrastructure. That is one of the main reasons we have a big federal deficit. It is important that if we want to live in a civilized society, we need to have ways of raising the revenue to pay for those services and those infrastructures that we depend on.

What has the government done in terms of generating that needed revenue?

Bill C-2 proposes an additional four percentage points of personal income tax on incomes over $200,000 per year. That is definitely a positive initiative, but it is also a fairly minor initiative. It does not actually raise very much revenue. In fact, it does not even raise enough revenue to pay for the so-called middle-class tax cut that actually goes to what we might call the upper middle class. The maximum benefit is only to people earning more than $90,000 a year. We have this kind of redistribution from the rich to the nearly rich, which is costing the treasury even more money.

We, in the NDP, have suggested that the government might look to the corporate sector as a source of additional revenues to pay for public services.

It is interesting. This morning, the Toronto Star and CBC have come out with a joint investigation that looks into the loss of revenue to offshore tax havens. It notes that all of these tax information exchange agreements that the former Conservative government was very keen to sign have actually made the problem worse.

The goal of these agreements was obviously to achieve greater transparency, to get more information about what was going on in tax havens. However, what the Conservatives did while they were in power was to put in place a policy whereby once a country had signed one of these tax information exchange agreements, there was no more enforcement. Canadian companies could just repatriate profits tax free from those jurisdictions. Far from curtailing offshore tax avoidance, this plethora of tax information exchange agreements has actually made the problem worse. I think that is a problem that we need to be addressing in this House.

I would also like to talk a bit about a specific case of offshore tax avoidance that I think really illustrates the problem.

Cameco is a company that mines uranium in Saskatchewan. In 1999, it signed a deal with its own subsidiary in Zug, Switzerland to sell that uranium to Switzerland at a fixed price of $10 per pound. Switzerland was not the ultimate destination or user of that uranium. The subsidiary in Zug was just reselling it to other jurisdictions around the world at market prices. Of course, the market price of uranium is variable, but it has consistently been quite a bit more than $10 a pound. It is currently around $30 a pound. It was up to as high as $140 a pound in 2007.

The only real effect of this arrangement was to transfer billions of dollars of profits from Canada to this Swiss tax haven. The Canada Revenue Agency has calculated that from 2003 through 2015, that cost the governments of Canada and Saskatchewan more than $2 billion in lost tax revenue.

This is a huge scandal. It first came out in 2013. At that time, I was struck by the fact that Saskatchewan's Conservative MPs and one Liberal MP were totally silent on the matter. Fortunately, we now have some New Democratic MPs from the province who are going to speak up for tax fairness and raise issues like this.

It is very concerning that we have this company that is making huge profits off of Canadian resources and then transferring those profits out of the country, in a very brazen way, in order to avoid paying tax on it.

The good news is that the Canada Revenue Agency has started to pursue this matter. That is the way in which it came out publicly in 2013. However, the news that is a little more concerning is that there has been a real tradition of both Conservative and Liberal governments not actually following through on these cases, and instead signing these deals that let the tax cheats off the hook.

Part of the reason that I want to bring the Cameco case forward in this House is to put it on record, to make sure that the Government of Canada is actually going to follow up on this and not let the company get away with this scam.

I am not alone in this. Earlier this week, an organization called Canadians for Tax Fairness presented a petition signed by more than 36,000 people, calling on Cameco to make these tax payments. There are a lot of people who are concerned about this, and finally they have some Saskatchewan voices in Parliament speaking up for them.

I would also like to touch on the provincial side of this whole question. The tax base to which provincial taxes apply is actually defined by the Government of Canada. When you have a company like Cameco shifting taxable profits out of the country, it is not just the federal government that loses out; it is also the Government of Saskatchewan that is no longer able to collect the appropriate taxes on that money.

This is a pressing concern, because the Government of Saskatchewan is running a huge deficit right now. The Government of Saskatchewan really needs that money to maintain important public programs in our province. This is a critical issue. It has just come to light recently that the small “c” conservative government in Saskatchewan refused to present a budget prior to the recent provincial election because they wanted to conceal the fact that they were running this big deficit.

Now we know there is a huge deficit there, and we know how important it would be for the Province of Saskatchewan to be able to collect fair corporate taxes from the profits generated from our province's resources. It is not just about Cameco. This point is applicable to the whole question of offshore tax avoidance.

If the federal government were to do a better job of preventing this tax avoidance and tax evasion, and actually make sure that the correct amount of profit was subject to federal corporate income tax, that would also mean those profits could be subject to provincial corporate income tax.

I think almost all provincial governments are in deficit right now, and one of the best things this Parliament could do to help our provincial governments generate the revenues they need for health care, education, and social services would be to get our tax system in order. It wants to make sure that appropriate reporting is being done, so that not only do we have adequate revenues for the federal government, but so that our provincial counterparts can fund their operations in an appropriate way as well.

We are facing a huge revenue problem in this country. We have tax rates at historic lows, which are not sufficient to fund the important services and necessary infrastructure on which Canadians rely. Why is this happening? Obviously, one of the problems is that the general corporate tax rate has been cut. As my colleague pointed out, that has led to a huge loss of revenue and has not produced investment in our economy.

The other issue is that whatever the tax rate, it is not actually being applied because of these offshore tax schemes, which were aggravated by the recent Conservative government, of which Cameco in Saskatchewan is a particularly egregious example. We need to focus on this problem and come up with concrete solutions to collect appropriate revenues.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, before I begin, I will be splitting my time with the hon. member for Regina—Lewvan.

It is good to be returning to the discussion on Bill C-2. As we all know in the House, this is a bill that received its first reading all the way back on December 9, 2015. We have had quite a session since then, and it is good to be returning to some old familiar ground.

Bill C-2 covers a few different areas. It is a bill that would amend a few different areas of the Income Tax Act. However, I am going to be limiting my comments to two areas in particular. The reason for that is they are the areas that are most relevant to the constituents in Cowichan—Malahat—Langford, and I suspect to constituents of most members of Parliament in the House as well. One area is the changes the bill would make to our tax code, notably to the area that the Liberals define as the middle class; and the second area is the reduction of the TFSA contributions from what the previous Conservative government used to have at $10,000 per year, down to a more reasonable level of $5,500 per year.

As part of my introductory remarks, I also want to speak a bit about my history as a former constituency assistant. I had the honour of working seven years as a constituency assistant. In that time, Canada Revenue Agency casework was one of the top three cases that came across my desk. It was some of the top casework that I got to see. I had a very privileged position, because over seven years I had very privileged access to many members of my constituency and their tax returns. I got to see the full range of their incomes, the very intricate details of their tax returns, and their relationship with the CRA because they essentially signed a contract with our office to give me unimpeded access to their tax returns and their tax history so that I could make some inquiries with the CRA on their behalf and try to solve the problems that they brought to the office.

One of the notable things that I saw during those seven years was the range of incomes. The range of incomes in Cowichan—Malahat—Langford would not be touched by the Liberals' tax measures. Incomes generally fell in a range of about $25,000 per year and maybe up to a high end of $50,000 to $60,000, so that the people at the high end would get some benefit but not much.

The key point I am trying to make here is that most constituents in my riding and I suspect most people across Canada would not receive any benefit from this tax cut, yet the Liberals keep on selling to the Canadian public that this would be a middle-class tax break. That is absolutely false.

I spoke to the bill at second reading back in February, when I was still getting used to making speeches in this hon. House. One of the things that I really loved to bring up during that speech, and I brought it up again during our discussions on Bill C-15, was the fact that the median income in Canada according to Statistics Canada is $31,000 a year. If we take the definition of median, which basically is the number separating the higher half of a data sample from the lower half, we could take $31,000 a year as a reasonable definition of where the middle class is. However, the Liberals' so-called middle-class tax break would not even start to begin giving benefits until people reach an income of $45,000 a year. They would max out when they get above $90,000 and into $100,000 a year.

To make it perfectly clear to everyone watching this debate, every member of Parliament in this chamber who earns $170,000 a year, which is on the public record, would get the maximum tax break of $670 per year, everyone. That is what the Liberals would do. They would give people in very high incomes a tax break, which frankly speaking we do not need. I do not know about everyone else in this chamber, but I was not elected to come to the House to give myself a tax break while the hard-working men and women of my riding get nothing. That was not what I was sent here to do. That is not the middle class that I came here to fight for.

The Liberals will say that it is okay because they are introducing the child benefit. It is a great concept, the child benefit. I will never, as a father of young children and knowing many constituents who have young children, argue against giving more money to the hard-working men and women of our country to help them raise their children.

However, I need to point out some evidence for everyone who is watching this debate. The Liberals' plan for the Canada child benefit will provide a maximum annual benefit of up to $6,400 per child under the age of six. Compare that with the average cost of child care in B.C., which is $14,000 per year. It is a drop in the bucket.

When I talk to families about the difficulties of child care, they say that more money would help but that what is really bugging them is the lack of affordable spaces and the lack of spaces overall. Furthermore, a lot of parents come up to me and say that their spouse works and they are a stay-at-home parent, and what would really get their family ahead is if they could actually hold two jobs. They cannot do that because the costs of child care are too high. They literally cannot afford to go and get a job.

That is what I hear. That is what I heard during the election. That is what I heard during seven years of working with constituents, right where the rubber meets the road, right at the constituency office.

I do not want any member of Parliament to tell me I do not know what I am speaking about, because I come here with evidence. I come here with testimony. I come here with seven years of experience of working with families. It is a shame that this Parliament is not doing anything to expand child care spaces in this country.

Furthermore, if we really wanted to give lower-income Canadians a leg up, we would pay attention to the wages they are receiving, and we would take this opportunity to show some leadership and institute a federally regulated minimum wage of $15 an hour.

A lot of people will say that is only going to affect a small number of jobs. That does not matter. It is about showing federal leadership. It is about having the House of Commons lead the way so that we put ourselves in the morally correct position of saying that we did it first and we expect the provinces to follow. I do not know how families make it on $11-an-hour wages. I simply do not. It is a miracle that they get by in the first place on those low wages.

I have spent a lot of time in my speech speaking about that particular tax change. It is a very passionate subject for me, as members can see. I do want to devote a little time on the TFSA, because that is one change in Bill C-2 that I agree with.

The Conservative government's plans in the previous Parliament to raise the limit to $10,000 a year would have been a huge cost to our treasury in later years. Furthermore, I do not know many families who could max out at $5,500 per year, let alone $10,000. When a family is earning a median income of $31,000 a year, how on Earth are they able to save $10,000 per year extra, to sock away? It is simply not possible.

That is a policy that benefits the top income earners in this country. Leaving the limit at $5,500 is perfectly reasonable, and it is something I can certainly support.

The costs with the TFSA increase to $10,000 a year would have risen to $132 billion by the year 2080. Conservatives like to portray themselves as the party of low taxes, and they like to really use the phrase “tax and spend”. The point I am trying to make is that if we are taking that much money out of federal revenue by those later years, that in itself is a tax on the programs that we use to support this society, to help low-income people get through.

If we are taking that kind of revenue out of the federal revenue stream, we are going to have to make cuts to federal programs. As much as we do not like to pay taxes, they are a part of living in our society and they are a part of building our infrastructure and building our supporting programs.

I will conclude by saying that we have been proposing some truly progressive things that could have made a real difference to low-income earners. I am sad to see that Bill C-2 did not live up to those standards and for that reason I will be voting against the bill at third reading.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, it is an honour to rise in this chamber on behalf of the constituents of Central Okanagan—Similkameen—Nicola.

I appreciate that we are at the eve of our rise, although it is neither your job, Madam Speaker, nor mine to say when that is. However, I want to thank every member I have had the opportunity to work with in this chamber during this opening round before we rise for the summer and thank the pages and the table staff for their commitment to this country.

I am here to speak to Bill C-2. It is an important bill, because it lays out the philosophy of the current government. The Liberals believe that raising taxes on the highest bracket will benefit this country. It is perfectly all right for them to contend that. They won the election. However, it is also perfectly all right for us, as members of Her Majesty's opposition, and all opposition parties, and even their backbench, to question the government.

Oftentimes in our system, members of Parliament are more relegated to being an approval body in this chamber and are not necessarily directing policy. However, I think one of the strengths of our system is when governments of any stripe take the policies of their predecessors, evaluate them, and continue them, if they are good for Canada.

In the same spirit, I would also suggest that we must remember that a broken clock can be right twice a day, but once in Quebec, I believe, because they go by international time. However, even in opposition, we may strike on an idea whose time may have come. I would hope that the government and members of the governing party will listen and take that forward. This country is great because of continued work toward policies that support all Canadians.

With that in mind, I will raise a few points about what I think could be improved and what the government, or ministers themselves as they work with their deputies, maybe not through this legislation but through their deliberations on future legislation, might take into account.

I have had the great opportunity to work with some members of the finance committee by subbing in from time to time. It is a very good group. The members seem to have a good understanding of the bills before them, and they seem to get along quite well.

One of the interesting concepts we heard about in committee was from Dr. Jack Mintz. Dr. Mintz raised a concern that taxing at the highest bracket would put pressure on some people of higher means, who may say that they are going to move to a different province or offshore to another country. When we lose those entrepreneurs, because 60% of small business owners are in that bracket, we lose collectively. We lose their innovation, and sometimes their capital, because they may begin investing in other countries.

The current government has said that it will use evidenced-based decision-making. Evidence means that there is theoretical evidence provided through academia, governmental reports, or think-tank studies or through actually collecting the data and creating an inventory, so to speak, on whether a policy is in the long-term interest of this great country.

In regard to Bill C-2, Dr. Mintz made the suggestion that the Canada Revenue Agency has the ability to track whether someone in this higher income bracket, who the Liberals will be taxing at a higher rate, moves or migrates to other lower-cost jurisdictions to operate, such as my province of British Columbia.

I am sure that Premier Christy Clark would love me to take a moment to sell all the high points of locating to British Columbia to entrepreneurs, but I will not do that. I am not going to speak to the parochial interests of my home province. I refuse to. However, what I will say is that there could be interprovincial or offshore migration.

If CRA was to collect the information, we might be able to get a tale of the tape.

I realize that people move for all sorts of reasons, but economists will tell us that incentives matter and people do make decisions, particularly in the higher income brackets, to find places where they can maximize their capital and where they feel welcome.

As a starting point, this is something the government can do on behalf of all Canadians to ensure that its policies are to the benefit of the long-term interests of this great country. I hope the government will give that full consideration.

I will also step back and tell the House about a personal experience. I love this chamber. I love this country. However, one of the things about our politics that we could change would be to stop judging an idea because of the messenger. If a former minister of the previous government gets up and makes a suggestion based on his or her experience, or someone from some think tank who people believe has some sort of ideological background says that this is a good policy for Canada, we should listen and evaluate it. We should not simply dismiss it because we disagree with some sort of vaguely placed ideological position. Let us start judging policies by their merits, not by the people who espouse them.

There are many things this government is going to be looking at. Trade, for example, is going to be an extremely difficult file for the Liberals, because Canadians have different views. Ultimately, the government is going to have to look at the evidence, look at how our economy has grown over the past 30 years by becoming a free trading nation, and then evaluate how that helps all of us.

We all have a different reaction when we suffer a loss, whether it be an electoral loss or a personal loss. We face denial, then anger, sadness, and acceptance. I am getting close to the acceptance stage on many of the government's policies, but members on the other side continue to get up and criticize the opposition for having a different view. We need to embrace the views, respect the views, and not cut each other down.

That being said, I will go to the subject of tax-free savings accounts. My riding is made up of an older demographic. Broc Braconnier is a veteran and one of the volunteers on a volunteer tax group. This is a group of individuals that helps seniors, usually low-income seniors at risk, file their tax returns so they can get the benefits they so desperately need. He mentioned to me that the tax-free savings account offered seniors two important steps. First, if they sold a home and downsized, a lot of the money from the sale of that home could go into a tax-free savings account if it had not been used before. They could also draw income from that account at an accelerated rate, which could make them feel that they had the nest egg they worked for. The same applies to the RRIFs.

I would just say to members on the other side that it is perfectly legitimate for us to raise concerns about certain policies. I do not mind being criticized, but let us talk about the ideas, and let us make sure that we are not skating around the area we like or the area we dislike. Policies are not so simple that they can be dismissed in one statement in this place.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Madam Speaker, I am honoured to stand to speak to Bill C-2 once again, and about some of the implications it will have when the bill moves forward.

It is great that we are in the House today debating the bill, because there are many things Canadians need to know about it, and that we as the official opposition have to bring to the attention of the government.

Today I want to start with the tax-free savings account. The current Liberal government has proposed a reduction in the maximum annual amounts Canadians can invest in these accounts. We know this is a tool that has been working for Canadians. Unfortunately, the government does not, on the false pretence that doubling the tax-free savings account only benefits the highest-earning Canadians, rather than just the middle class.

As we talk about this today, we are looking at all of these proposed middle-class tax hikes that we will be seeing for the middle class and for all Canadians.

Madam Speaker, I will be splitting my time with the member for Central Okanagan—Similkameen—Nicola. We probably know him as the member of Parliament for the “free the beer” campaign, another great campaign we have done.

I am here to talk about the tax-free savings account and the proposal of the Minister of Finance to move forward with the CPP contributions that the government will be inflicting on all Canadians, especially future generations.

The Liberals proposed middle-class tax cuts, reducing it to 20.5%. It really does sound good when they say they are cutting taxes for the middle class. However, they are forgetting to tell Canadians about all the other things they are going to do. We heard the Minister of Environment in the House this week talking about the carbon tax. We have to recognize that they are going to say they will be reducing taxes for the middle class in order to create more opportunities, provide better savings, and more opportunities for families, but they are not talking about all of these other things they are also proposing.

I am a resident of Ontario. We are already going to see gas prices go up 4¢ a litre, because it was proposed by the Ontario Liberal government. Now we see our federal Liberal government also proposing a carbon tax, a CPP tax, and all these other things. Therefore, although they talk about a middle-class tax bracket at 20.5%, they are not letting all Canadians know that they are actually taxing us in other forms. It really is very unfortunate that they are saying one thing but doing another.

We are not decreasing the taxes when we have backdoor amendments changing the current tax system. For those people living in Ontario, where we see horrible job creation and much unemployment, much like Alberta with the non-support in our energy sector, not only are Canadians not going to have jobs, but they will be paying more, even at the gas pumps. They are going to be paying more in the grocery stores, because we see governments taxing Canadians, whether they are in Ontario, or anywhere in Canada. I have huge concerns about this.

We talked about the tax-fee savings account, which is a vehicle for Canadians to save money. Our Conservative government increased it because we had Canadians saying this was a great vehicle for saving money. By introducing a new threshold for what they could save it gave them the opportunity. Many times, we will hear the government say people are not maximizing it. Now, what it is proposing is “nannyfying” what we are doing in Canada by introducing Canada pension plan increases.

We have a vehicle that currently works, the tax-free savings account, which allows Canadians to save responsibly, and many Canadians are doing so. However, now the Minister of Finance will be touring later on this month, trying to get all of the provinces on board to increase our CPP contributions. We have to recognize that that is not only a vehicle for savings. At the same time, it is a huge burden on small businesses. Those small businesses were looking forward to a decrease in their small business tax. However, the government will not be fulfilling that promise either.

Therefore, what the government will be doing is taking the tax-free savings accounts, which allow Canadians to make the choice on how they want to save their money, and instead introducing a new tax on Canadians and employers through the Canada pension plan, as a nanny state tax.

What is this going to do? We know that when students come out of university, they have high debts. It is something that we should be aware of as Canadians. We are asking our students to go out there and get the proper education they need so that they can make sure they have a brilliant future. They come out of those schools with debt and when they get their first job, not only are they going to have to contribute to the CPP but they will have to double those contributions. We are looking at an additional $3,000 out of their pockets to be put into the CPP.

As a parent, I have no problem because I believe that it is very important for people to save for their future. However, at the same time, what we are doing is having them save for retirement when they can take that money and put it into their student debt, put it into a tax-free savings account, or into the first-time homebuyers plan under the RRSPs and put that money toward their first home. What we have now done is taken away all of those opportunities for Canadians and, as a government, we are saying, “You must put it into the Canada pension plan.”

Although I think saving for retirement is very important, we have to recognize that this is the Canada pension plan. It does not help our current seniors, those seniors who we say are the most vulnerable. It will just be an additional tax. For those students who have come out of Carleton University with these enormous debts, we will see another tax on them. The opportunity for them to save their own money for what they choose is being removed by the current government. These are things that I am extremely concerned with.

The government has talked many times about deficit spending in its campaign promises. I want to talk about the middle class. The middle class we are talking about today will be that group of people, these young families who are currently the middle class, who will wind up with a huge debt. Whether it is the debt from the deficit or from the new CPP contributions or the debt they will have because we will be taking this carbon tax money, will we be using it properly? Those are some huge concerns I have.

I am very much an environmentally friendly person. However, I believe in the stewardship of our land. I think we need to ensure that we recognize that if we are taxing people, this money will actually reduce costs or, as the Liberals are saying, the man-made climate change, or will we just be taking that money and putting it into general revenues and pet projects. Unfortunately, I see the latter, the pet projects, truly being the focus of this climate change plan.

We have this new carbon tax that has now been introduced in the province of Ontario. We will see one at the federal level as well. Average Canadians, the people who will have to pay for this huge deficit in 2016, this line of credit or the 2016 budget, will just see huge debts that they will have to pay. That is a very large concern for me. As I said, I am parent and I have three children currently in post-secondary education. I recognize the costs of education. I am very fortunate to be able to assist with some of those expenses. Not all families can do that. What we have done is once again crippled the middle class by introducing so many different factors in this.

Going back to the tax-free savings account, this is a vehicle, as we have said, and as the government has said many times, to maximize contributions. This party on this side, the official opposition, sese this is an excellent vehicle for people to save money. It gives them the opportunity to put in maximum contributions. Instead, we are rolling that back. We have different institutions and different organizations throughout Canada saying, “We appreciate that increase and we think that's what needs to be done.” Instead, we see a government that is planning on taxing Canadians—tax, tax, tax, and spend, spend, spend. As we go through this, the bottom line is that we are trying to tax ourselves to prosperity. That is not what we should do. We are taking all of this money from hard-working Canadians and we will be taxing them more and more.

Unfortunately, now that the Liberal government has come into office after it had its great campaign, all it is doing is crippling our middle class and our seniors, and it has only short-term plans. I hope that when the Liberals look at this they will recognize that we need to do better, and we can do better. I hope that they look at and review all of the documents that they have put forward.

The House resumed from May 19, consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.

Business of the House

[Dominic LeBlanc, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I want to thank my colleague from Regina—Qu'Appelle.

This afternoon, we are continuing third reading consideration of Bill C-6 on citizenship. Tomorrow, we are going to debate Bill C-2, which would amend the Income Tax Act.

If colleagues would not mind, I would prefer to dispense with the statement for next week's business if that is okay. What I will do is join my colleague from Regina—Qu'Appelle and associate myself with the very positive and appropriate comments he made.

Mr. Speaker, for you and me and many of our colleagues, the past few months have certainly been a learning experience. This is the first time in your long parliamentary career that you have served in this role that is so essential to democracy. On behalf of my Liberal colleagues, I want to say that we think you have done an excellent job, and we thank you for your service and for taking on the role of Speaker.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Just out of curiosity, we had asked you to do a study on the fiscal impact, in order to find out who would benefit from lowering the second tax bracket in Bill C-2.

You have also done studies, including for the Senate, to determine the impact of the new Canada child benefit, and the results have been interesting.

The government tends to combine everything together. It says that everyone will benefit from it, meaning that 90% of people will benefit from tax measures and that nine million Canadians will benefit from tax cuts.

According to the scenarios explored by the Senate, those measures are appealing because they will benefit families with children, but there is no study on the impact of the Canada child benefit on families without children. Has there been a request for such a study? In your view, would it be useful to study the overall impact of the tax measures, the combined tax cuts, the Canada child benefit and the tax cut for SMEs? You have also studied the elimination of that tax cut.

The government said that, since it granted a tax cut to the middle class, SMEs don't need an additional tax cut. Have you studied the impact of those three measures combined and would it be useful to do so?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

We are opposed to the idea of income splitting. I am not referring to seniors, of course, but to what the Conservatives passed. We simply wanted to publicly express our disappointment with the fact that the government is replacing this measure by another tax-reduction measure, a pseudo-reduction for the middle class whose only effect will be to move money towards the 30% with the highest income and to ignore 70% of Canadians.

We are going to vote in favour of this clause because it does away with income splitting, not for seniors, but for the rest of the population, for couples with children. However, we would have preferred the government to listen more to what we were telling it about reducing taxes for the middle class in Bill C-2.

Criminal Code

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, back in 2015, when this came out, a panel was set up by the former justice minister. However, I look at the work we have done today, and we can talk about these timelines. Let us be honest, this week we did Bill C-2, Bill C-6, Bill C-10, and Bill C-11. We had all of these things shifted off of the Order Paper.

What has happened here is this. Although it is a very important bill, unfortunately, when it came to the agenda of what we were supposed to be discussing and what we were discussing, a lot of political games were being played at that time. This took away the rights of the opposition members to debate this. We can talk about that. However, let us be honest about what happened this week. We lost hours of crucial debate because of the actions of the government.

Income Tax Act

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

Mr. Speaker, I can assure the member that I was not laughing at him. However, it is with pride that I stand today to comment on Bill C-2, in a special shirt with a unique-looking tie in celebration of Ukraine heritage.

The fact is that this is an implementation bill that ultimately will see thousands, in fact, millions of Canadians get a tax cut. I say it in that fashion, because the Conservatives who I have known over the years, generally speaking, vote in favour of tax cuts.

The types of tax cuts we are giving are going to Canada's middle class, such as teachers, firefighters, factory workers, and health care providers. They are part of Canada's hard-working middle class, and they would be getting a substantial tax cut, hundreds of millions of dollars in tax cuts.

Could the member explain to all those middle-class workers why the Conservative Party is voting against giving them a tax break? The member should recognize that the Conservatives are also voting against giving a special tax increase to those who make in excess of $200,000. This bill would ensure more income equality. Why would he vote against it?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I appreciate the opportunity to speak to this important bill. I will say at the outset that it is good to be back talking about the business of the nation again. As much as the conversation that happened this morning needed to happen, it is very good to be back to the things that Canadians are most concerned about, which is the economy, jobs, their well-being and that of society as a whole.

There are some significant concerns about the bill that we need to draw particular attention to. We in the opposition have been doing that over the course of this debate, and we will continue to do that. We will continue to do our job, which is to highlight problems with government legislation, suggest improvements, and to do so in a fair-minded and constructive way.

Just by way of some review, the legislation that is before us would make two different changes to our tax system.

The first change is that it would make a modest reduction to some middle-income earners' taxes while introducing a tax increase for those at the high end. However, this change would not be revenue neutral. Rather, it would significantly add to the deficit, and over a number of years, significantly add to the debt. That is one of the changes.

The second change that the legislation would make is that it would do away with the higher cap on tax-free savings accounts that was implemented by our previous government and did exist. There was a limited opportunity for Canadians to save at that higher level. However, it would now cut back on the amount that Canadians can save tax free.

I want to start my remarks here by talking about one specific aspect of this issue, and that is the issue of equality. Members on all sides of the House are concerned with equality. They want to ensure that everybody has a shot. They want to ensure that everybody in Canada has a similar shot at doing well. That is really a principle that we all come at perhaps from slightly different perspectives and slightly different emphases.

On its face, it seems that the bill was advanced with an eye to equality. However, if we dig into the details, I think there are some serious problems from an equality perspective in terms of the actual impact that the bill would have. I would describe it as maybe a first-year undergraduate version of equality. It may be well-intentioned but it would not actually have the desired impact.

Let me start by saying that for me the most important measure of equality is something called “intergenerational earnings elasticity”. This is a measure of the likelihood that a person will perform at the same economic level as their parents relative to the rest of society; in other words, it measures movement between different income quintiles. Therefore, if I come from a high-income family and was almost certainly going to have a high-income family myself, that would be bad from an equality perspective using this metric of intergenerational earnings elasticity. This does not mean that we want people who are well off now to do worse. Rather, it means that, relative to each other, we want to have a society where people who had lower incomes can move ahead of others, and vice versa, a society where opportunity is more fluid and not fundamentally shaped by who our parents are or where they came from.

This information is tracked, and there was a report that came out in 2012 that looked at intergenerational earnings elasticity. What was interesting to me, and made me very proud as a Canadian, was that we performed particularly well. As I recall, we were fourth place in the world overall. It is interesting that we actually performed better than stereotypically more left-wing countries, and we performed better than stereotypically more right-wing countries. Where we were at, and likely where we have been over the course of our history, was in a relative sweet spot by providing not only necessary social programs but also allowing a healthy level of free enterprise that allows for economic growth and allows people to pursue economic opportunities that perhaps their parents did not have. That is one measure, intergenerational earnings elasticity. It is a measure on which we have historically done very well.

The other question might be the performance of the middle class. I have quoted this before. This is a quote from the former secretary of state, now presidential candidate, Hillary Clinton, when talking about the Canadian middle class. She said:

Canadian middle class incomes are now higher than in the United States. They are working fewer hours for more pay, enjoying a stronger safety net, living longer on average, and facing less income inequality.

There are two ways of measuring the performance of the middle class. Well, there are more than two, but these are two significant ones: looking at median income and median net worth. Between 1999 and 2012, the median net worth of Canadian families rose by 78%. That translated to more than a 50% growth in net worth for every income quintile, except the lowest, which still grew but did not grow as much. Therefore, when it comes to median net worth, we are doing very well.

Median, by the way, is typically used as a measure of the middle class performance. It is better than an average measure, because an average metric can be skewed upward by groups who are doing particularly well, but median gets us closer to looking at those actually in the middle and how they are doing.

There was a study that came out in The New York Times in 2014 that showed real inflation-adjusted median income—I am talking about median income now—went up by more than 20% since the beginning of the last decade. By the way, at the same time, median income was roughly stagnant in the United States.

When it comes to intergenerational earnings elasticity and the performance of the middle class, Canada historically has done and is doing very well. That is important by way of context, because it seems that some members in the House have this revolutionary spirit when it comes to our economy—that we need to upend the way our economy functions now as it just is not working—but if we look at any credible measure of equality or middle-class performance, Canada is in a strong position. That does not mean we cannot do better, but we should recognize where we are and recognize the risks of dramatic or revolutionary changes in our fiscal policy.

I want to say, on the equality front, that at the same time as being very much concerned about equality, I and most of us on this side of the House would strongly reject the politics of envy. We would reject the idea that we should in some way regret the success of those who are doing well. The focus of public policy should be on helping the poor and the middle class. We do not need to focus on improving the lot of those who are well off, but we should not regret the fact that there are some people doing well.

Those people are important members of our community as well, and very often those who are well off are contributing to the community in ways that they are able to do, in particular, because of their wealth or position. That is an important point about equality. It is not about trying to level down those at the top. Rather, it is trying to build up those who are in the middle and those who are particularly struggling. Those are some underlying equality principles, at least as I understand them.

Let us, then, talk about specific measures in Bill C-2 and how they would impact equality. First, we know that this bill would provide a tax cut that would not impact those who are worse off. The tax cut specifically targets those who are making between $45,282 and $90,563. It would not have any impact on those who are making less than $45,000 a year, and that could, by the way, be families with a family income of $70,000 or $80,000 a year, if the earnings are shared by a couple. There would be absolutely no impact of this tax reduction.

Canadians should know that and reflect on the fact that this has a somewhat strange view of middle class. To get the benefit of the middle-class tax cut, one has to already be doing reasonably well. This certainly does not do much for those who, in the Prime Minister's oft-repeated phrase, are seeking to join the middle class.

However, more than that, this bill would lower the limit for putting money into tax-free saving accounts. The data suggests that many people who have low and middle incomes make very good use of tax-free saving accounts.

More than half of those who max out tax-free savings accounts are making less than $60,000 a year, so reducing the power of this vehicle is the only thing in the bill that impacts those who are making less than $45,000 a year, who arguably need the help the most.

This is a rather strange concept of equality, and although taxpayers get a benefit when they start to make $45,000 year, we know the way the tax system works here that they benefit from this change to a greater extent the more of that income tax bracket they cover. Therefore, people who are making just over $90,000 like this policy the most. They are going to benefit the most. A family making $180,000 is really in that sweet spot for earning the tax cut. Again, there are newer, higher taxes when they hit $200,000. However, a family income approaching $400,000 could actually be significantly to the positive because of these tax changes. Therefore, that is a bit of a strange approach if the objective is equality.

The impact on people making less than $45,000 a year with this tax change would be they would be losing the opportunity to invest in a tax-free savings account. They would be losing the opportunity to save in the same way, to the same degree, for their future.

One other point I want to make about tax-free savings accounts is that there are specific things within them that are pro-equality. The impact of TFSAs is greater for those who are lower income. This is because of the relative value of an investment in a tax-free savings account versus an investment in an RRSP. These are different savings vehicles. Canadians who are doing financial planning will potentially choose between putting money in a tax-free savings account or in an RRSP. The difference is that if they put their money in an RRSP they get a tax deduction at the beginning, but then they pay tax on it when it is converted to a RRIF and withdrawn from the RRIF in the future. On a tax-free savings account they have to pay tax on that money up front, but then they can accumulate interest tax free.

They are different kinds of vehicles, and I would obviously encourage Canadians to save their money in one or both of these vehicles. However, the greatest value of an RRSP is for those who can achieve a significant tax differential between the taxes they would have paid on that money. They are not paying tax on it during their working years, but then they do pay tax in the future. Therefore, if they are paying income tax at a very high rate and they can reduce that amount during their working life, but then during their retired years they can draw on that and pay a much lower rate of tax, that is really where the greatest value is in an RRSP.

On the other hand, Canadians who are making more modest incomes, who are not in the higher tax brackets, are more likely to opt for the use of the tax-free savings accounts because they do not get the same benefit from that differential. This explains why Canadians of modest and lower incomes clearly use tax-free savings accounts at very significant levels.

The argument has been used on the other side that it is only well-off people who have $10,000 they can save. I am not convinced that is true. There are many modest- and low-income Canadians who make significant sacrifices, not necessarily because they have to this year, but because they believe it is important for them to put money aside for a rainy day or for opportunities for themselves and their children in the future. There are many Canadians who do that, and that is often a very good choice to make.

With regard to the specific point about the difference between the tax treatment of TFSAs and RRSPs, if very wealthy Canadians have $10,000 sitting around, they are probably more likely to put it into an RRSP than in a TFSA. The point is that, as much as well-off people have more money to save, TFSAs are a specific vehicle that is specifically providing a greater relative advantage to those who are of modest and lower income. Therefore, it is important to understand that TFSAs are in many ways inherently more of an equal or pro-equality type of saving vehicle.

As we talk about equality, I think it is important to say, as well, that inherently debt is regressive; that is, accumulating deficits and debt is inherently a measure that is not conducive to income equality because it assigns costs to future generations, to children, people who do not have economic means, at least not right now. It says to the next generation, “Here is more money that you have to spend, in addition to dealing with your needs, because we expect you to be working hard to take care of our needs”. It assigns the cost of present needs to future generations. That, obviously, is not conducive to equality.

Telling my three-year-old daughter, Gianna, that she has to pay for social programs that I want to use today is not something that those who are genuinely seeking equality should be doing. We should be paying for present needs with present dollars.

It is worth underlining, in terms of the measures of Bill C-2, that because the tax changes do not balance out, this is going to cost a significant amount of money over the next few years. We are going to be spending billions of dollars simply because of the poorly thought-out hole in the government's budget. It is telling that the Liberals said, during the election campaign, that it would be revenue neutral. They told Canadians that their tax changes would be revenue neutral and, in fact, they were not.

Maybe this is because they were not being truthful; but maybe it is that they just did not know, because they got the numbers wrong. I think either of those is pretty concerning. This is a problem. I think it is a problem that the government should have remedied, and could still remedy.

I think it is very clear, looking at the bill, that there are significant equality problems with it.

Measures that would have been more pro-equality would have been to look for ways to lower taxes for those who are at the bottom.

I have to say that this is exactly what the previous Conservative government did. We lowered the GST from 7% to 6% to 5%. That is the tax that everybody pays. That is the tax that all Canadians pay. We also lowered the lowest marginal tax rate. That was one of the important tax changes we made. We made necessary EI reforms, which would have allowed reductions to EI premiums over the long term. It is no coincidence that all of these taxes that we sought to impact were taxes that had the biggest impact on lower-income Canadians. Cutting the GST, cutting the lowest marginal tax rate, and undertaking those necessary steps that opened the door for lower EI premiums were necessary measures to help those, in particular, who needed the help the most.

If we then compare that with what the government would do in Bill C-2, there is a clear difference. When I sometimes hear members opposite, even the Prime Minister, say that the previous government was helping those who are better off, it is always telling that they never mention a specific tax measure. I have never heard the Prime Minister cite specific tax measures or tax changes we made, in the context of that claim. That is because all of the tax changes we made were really with an eye to those on the low- and middle-income end of things.

Of course, we did cut business taxes, as well. Those are the kinds of measures that help job creation. They help low-income Canadians. They help unemployed Canadians get jobs.

I think it is important, when we think about social equality, to dig deeper into it than just the slogan. It is important to look at how we are performing as a country, first, to look at measures like the performance of our middle class, to look at things like intergenerational earnings elasticity, and then say, “This is where we are now. Now, how do we improve our performance?”

Bill C-2 would not improve our performance. By getting rid of TFSAs and by denying any benefit of these tax changes for those who are less well off, the bill is not pro-equality. We could do better. There are better measures that we could be proposing, and I would hope to see the government be willing to make some of those changes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, it is nice to be debating Bill C-2 after what has gone on this week. I do not think debate on Bill C-2 is going to make the highlight reel on CPAC; let us not kid ourselves.

I appreciate the comments the member made and I understand the position he is coming from. For us in the NDP, we have had a problem with what the Liberal definition of “middle class” is. When we look at the median income in Canada being $31,000 a year and median is very much defined as the middle point in a set of numbers, so it is about halfway. A tax cut in that range is not giving people any kind of relief. The member mentioned that we have many people in Canada who are suffering and I think he would agree with me that the gap in incomes is widening. People on the higher end of the spectrum are getting more and people on the lower end are getting less.

Economists are pointing out that couples with a combined income of $250,000 a year would gain $1,100 in tax cuts, while a couple with a combined income of $75,000 a year, which is pretty average, would gain zero to $4. I would like the member's comments on the fairness of that.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, boy, did my digression lead away from Bill C-2.

Let me say that I do commit to the idea that we should all be showing respect for each other and we should be talking to the people in our own parties and our own caucuses when they are not showing respect. When it comes to heckling, when it comes to actions that do not become us, all of us need to be leaders within our own caucuses. I commit to doing that and I hope the hon. member does the same.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I am honoured to rise today to speak to Bill C-2, introduced by our Minister of National Revenue and defended by our Parliamentary Secretary to the Minister of Finance.

Today, we have heard speeches from the hon. member for Louis-Saint-Laurent and the hon. member for Rimouski-Neigette—Témiscouata—Les Basques. What do these four people have in common? They come from three different political parties, but they are all proud Quebeckers who are all here to stand up for Canadian interests.

In my opinion, Bill C-2 advances Canada's interests because it helps the middle class.

During the election campaign, I know that people across this House, in their ridings, did a lot of door to door. I personally wore out many pairs of sneakers in this election campaign. The thing I saw the most was that there are people who need help. There are the poorest of people. There is the single mother who is earning $25,000 a year who needs help. She will be helped by the family benefits, the new child tax allowance that will come to her that will give her a lot more tax-free money. There are the vulnerable seniors who are living on their own. They will benefit, as well, from the guaranteed income supplement going up by 10% for single seniors.

However, there is also that great group of people, and certainly a large number of them in my riding, who are earning between $45,000 and $200,000 a year. They will greatly benefit from the middle-class tax cut and the reduction of the second tier tax rates from 22% to 20.5%.

I heard and I listened very closely to the different members of the NDP talking about those who earn less, and I do understand the goal of trying to help everyone. In the future, perhaps there will be another bill that will lower tax rates on the lowest tier. However, for the moment, we have to acknowledge that what is before us will help a lot of people.

There are people in my riding, and in many of our ridings, who are not comfortably middle class anymore. There are a lot of well-paying jobs that 25 years ago we would have said were well-paying jobs, but the salaries have not increased more than the cost of living, or less, over that long period of time. There may be families of four living on $90,000 or $100,000 on a single income, or $120,000 on two incomes, and they are also struggling to make ends meet. They are struggling to pay for their kids scholastic activities, whether through extracurricular activities such as sports, or alternatively through putting their kids in private schools. They are also struggling sometimes to support aged parents. Members of our sandwich generation have both their aged parents and their kids and are trying to take care of everybody.

It cannot be disputed that this middle-class tax cut for such a high percentage of Canadians, the entire mass of people who earn between $45,000 and $200,000, will help a lot of people. It will help a lot of families. It will help a lot of families take a vacation or do something that they otherwise would not be able to do, such as afford a mortgage on a better house.

When I look at the benefits of this law, while I fully understand the argument that there would be a possibility to do more some day, it still merits support.

I also want to point out that I agree with the reduction of the TFSA contributions from $10,000 to $5,500. I support the TFSA. I think the TFSA is an excellent vehicle for people to save. I do not dispute that it was a very good measure to put the TFSA into place. However, given the number of people who are using it and contributing more than $5,500, which is a negligible percentage, and the cost to the Treasury, I would rather reallocate that money to the child tax benefits.

I would rather see more people who are earning less have more to bring our children out of poverty. Let me just point out that for those families who are earning less than $30,000 with one child under the age of five, that will be over $5,000 more, tax free, that will benefit that family and perhaps bring a child out of poverty.

Any family earning less than $150,000 is getting more on the child tax credit portion, so for me, I think that is laudable.

I know that many of us have a lot of seniors in our ridings. My riding has a significant number of seniors, not just people who are 65 years old. I know my colleagues agree that 65 is not old nowadays. We are talking about people who are 80, 85, 90, or older. My grandparents and my parents' oldest friends did not move to retirement homes at 65, 75, or 80. They want to stay in their own homes.

The budget that we passed this year will enable more people to stay in their homes.

There is a problem in my riding. Two of our seniors' homes are going to close.

They are one block apart from each other. We need to put more money into social housing, particularly social housing for seniors.

Many members share these problems where they also have in their ridings seniors' homes that are closing, not enough new space for social housing, and people on a list that lasts forever when they are trying to find a way to stay in their communities. Some of the measures that we have taken this year are favourable to that.

I understand and appreciate the arguments on both sides. I am not here to attack anybody's economic record or anybody's economic plans. I only asked the question to the member for Rimouski-Neigette—Témiscouata—Les Basques to point out that it was not something that the NDP promised in the campaign, that they wanted the lower bracket to be cut. However, I still understand and I respect that argument in the same way I respect the Conservatives' argument that the TFSA should stay at $10,000, but in the end result, what we would ask all the members to look at is the fact that I do think, on balance, Bill C-2 is a good law and we should all support it.

If I may digress for just one second, I just want to say that today after question period I was very proud of the fact that members of this place came back to reality. We had a few days that were really unpleasant here where the tension could be cut with a knife. I came to federal politics, as some members did, from municipal politics, which was not partisan, and we never had things like that happen.

At committees we work with each other really well, at least we do at the justice and human rights committee where people from all parties work together in respect. I would love to see that continue to happen in this place. Everyone here is committed to it and what I learned most from yesterday's incident was that I have a personal obligation, and we all have a personal obligation, to remind our colleagues that we want to work together in respect.

I think this afternoon, where people had to come up with speeches at the last minute, impromptu, was a perfect example of respect. I just want to again thank everyone for the way they have acted this afternoon and I hope it continues.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I will be sharing my time with the hon. member for Mount Royal, who, like me, spoke in French during Monday's debate on Bill C-10. I wanted to make that correction since the hon. member for Outremont misinformed the House about that on Tuesday. In fact, I speak French more than he does in the House. He would contribute more to the quality of the debates in the House if he checked the facts before making unfounded accusations.

I rise to speak to one of our key election promises: the 7% tax cut for the middle class, whose tax rate will go from 22% to 20.5%; the tax increase for wealthier Canadians from 29% to 33%; and the reduction in the TFSA annual contribution limit from $10,000 to $5,500.

I commend the Parliamentary Secretary to the Minister of Finance and my riding neighbour, the hon. member for Saint-Maurice—Champlain, on his maiden speech. Our ridings meet along a provincial gravel road, Parent Road, where government signs strongly advise the use of CB radios. This border is located more than 300 kilometres north of Montreal, not far from the community of Parent.

Bill C-2 is important to the growth of the middle class. It includes crucial changes to Canada's tax system. The legislative summary of the bill is quite clear:

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.

These changes will benefit Canadians, so naturally, they are looking forward to them.

I also want to congratulate my colleague from Louis-Hébert on his speech. I rose to reply to him a couple of times, but better members were recognized before me. The life of an MP is complicated.

I would like to point out that the member for Louis-Hébert alluded to the fact that budget 2016 provides for a deficit. He also said that his government was responsible for all of the good things that came out of the last term of office. He is very happy to take credit for all of the positive results, while saying that his team had nothing to do with anything that went wrong.

Investments in the middle class and economic growth for ordinary Canadians are very important to me, the government, and the millions of Canadians who will benefit.

The member for Louis-Hébert also said that the Conservatives left the House clean. That is not completely true. The Conservatives sold the house to pay off the mortgage. They waved the cheque from the sale in the air for all to see before giving it back to the bank to pay the mortgage. The house was not really clean. It was gone. There are now deficits in the middle class, in infrastructure, and in all levels of government.

My colleague from Rimouski-Neigette—Témiscouata—Les Basques is a bit more reasonable. He presented fact-based arguments about our policies. I really enjoyed listening to his speech. I do not agree with him when he says that these tax cuts do not help the middle class. I agree with my colleague from Mount Royal, who asked why the New Democrats did not promise to cut taxes in their platform but did promise to balance the budget.

With the exception of the members of the former government, who still think that they left a massive surplus, even though that is not quite true, I think it is clear to all of us that it would only be possible to balance the budget this year if we used extreme measures, such as austerity, which is a very unpopular policy in any country.

I short, I am not worried about these deficits because they are investments. That is the case with Bill C-2. I would like to give my colleague from Louis-Hébert a little bit of background on deficits. Almost 100 years ago—

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I thank my colleague, who is also doing an excellent job in his first session in Parliament. He has really impressed his colleagues so far.

This is an important issue. The questions people ask me most often are about this and the proposed changes to employment insurance. For example, people have asked me why their waiting period has not yet been reduced from two weeks to one. I have explained that the measure is not yet in force. Since the government's platform said that would happen in 2017, that is what I tell them.

However, when they tell me they are still waiting for less tax to be withheld from their paycheques, knowing that this measure is in force, and they want to know why they are not seeing a difference, I am forced to ask them what their income is. In many cases, they earn $30,000, $35,000, or $40,000. I tell them that they do not qualify. Then I ask them if they have children to see if they will get the new tax benefit. Unfortunately, I have to tell single people that they will not benefit.

The problem with making big commitments and big promises is that it creates great expectations. Those great expectations can lead to disappointment for people who thought they would be included. That is what happened to a significant segment of the population with Bill C-2.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I would like to thank my colleague for his speech.

I completely agree with him about the role of committees, and I am proud that the members of the Standing Committee on Justice and Human Rights were able to work together to make 16 amendments to Bill C-14. I hope that that will also happen in other committees.

I understand the demand being made by my New Democrat colleague, who wants to offer a tax cut to a bigger group of people than the one provided for in Bill C-2. However, during the election campaign, the NDP did not put forward any proposal to reduce taxes for those who will benefit from Bill C-2 or for anyone else.

How is it that the New Democrats did not propose any tax cuts for the middle class during the election campaign and now they are demanding that sort of tax cut before they will support Bill C-2?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, as the NDP finance critic, I am pleased to rise at third reading stage of this bill, which has been debated at length in the House.

From the outset, I want to point out that during the debate and discussions in committee we reached out to the government to ensure that the tax cut promised in this bill was truly for the middle class.

As I said in my question, the middle class is not very well defined. The Department of Finance refuses to define it. We have varying definitions depending on the groups. On the other hand, we can agree that when half the people earn more than us and half the people earn less than us, we are in the middle class. I think that makes a lot of sense.

Those people, who earn roughly $31,000 or $32,000 a year, are not getting one cent from the so-called middle-class tax cut promised in this bill. I find that extremely problematic. I mentioned this in my question, but it bears repeating. As parliamentarians, parliamentary secretaries, or even the chief government whip, we are going to benefit the most from this tax cut. We are absolutely not part of the middle class, but we will get a maximum reduction of nearly $700 because of this promised tax cut.

Someone who earns $30,000, $35,000, $40,000, or even $45,000 a year will not get one red cent from the tax cuts in this bill. Therefore, when the government says that this bill will help the middle class as promised during the election campaign, that is not entirely accurate. Yes, that was in their election platform, but we all know that people rarely consult election platforms online when deciding how to vote. They tend to rely on what is said in the media, on television, in the news, and sometimes in the newspaper. What people kept hearing from the member for Papineau, who was the leader of the Liberal Party, was not that he would lower taxes for people earning over $45,000 a year, but rather that he would lower taxes for the middle class.

Those who earn less than $45,000 a year and consider themselves part of the middle class feel cheated, and rightly so. I am convinced that during the Canada-wide consultations held by the Parliamentary Secretary to the Minister of Finance and the Minister of Finance, they probably heard comments about that from people who are not eligible for the tax cut. People have been able to tell from the beginning of this year, since the tax cut took effect on January 1 and can therefore be seen on people's pay stubs.

Since the bill does not really apply to most middle-class Canadians, what could be done? That is where we reached out to the Liberal government at committee. We proposed a measure that would cost roughly the same, but would help a lot more Canadians. Instead of changing the tax bracket beginning at $45,000, which is more representative of the upper middle class, we suggested lowering the first tax bracket, the lowest level at which everyone starts paying taxes.

Accordingly, instead of lowering the rate from 22% to 20.5% for the second tax bracket, we are proposing to lower the rate from 15% to 14% for the first tax bracket. That will have a significant impact because the same person who sees half the population earning more than they do and the other half earning less, will receive a $200 tax reduction, whereas they are receiving nothing now. Thus, someone who earns $210,000 a year and now gets $200 of the proposed reduction, would instead pay $70 more.

We have to be careful with slogans. There is no doubt in my mind that, after all the debate, the desire to help the middle class that is constantly being trumpeted by the government is more of a slogan than something real.

If the government really wanted to help the middle class, it would have accepted the proposal, the olive branch that we were extending to the Liberals, in order to ensure that everyone could benefit.

I am sorry to say that this proposal was rejected by the Standing Committee on Finance. It is regrettable because I believe that it could have been debated and probably would have been agreed to. What the government promised during the election campaign, or the spirit of the promise, would have been kept. The whole of the middle class would have received a tax cut. That is not the case at present. It is unfortunate that the government is still trying to make us believe the opposite.

As a parliamentarian, I have to admit that I do not need a tax cut. I want to pay my fair share. I consider myself to be privileged. Why are they insisting that my colleagues and I receive the largest possible reduction? That is a very problematic aspect of the bill, which only has 10 clauses.

We are not fundamentally opposed to the measure to introduce a new tax rate of 33% for income in excess of $200,000 or to the measure to lower the TFSA contribution limit from $10,000 to $5,500. We have supported these measures from the beginning, even before the Liberal Party decided to include them in its election platform. I remember some debates that were held here, in the House, against increasing the limit to $10,000, and those arguments still hold true today.

The parliamentary budget officer conducted a very important and specific study on this topic. Once again, my colleague from Louis-Saint-Laurent did not fully answer the question, because he tried to imply that the TFSA is just a money-saving tool. TFSAs are indeed used for this purpose. After people pay their taxes, they deposit money in a TFSA, which then grows with tax-free interest. However, with the limit increased to $10,000, the TFSA would become a significant tax-avoidance tool for people who have the means to contribute the $10,000 maximum, as proposed by the Conservatives.

What is the result? The result is that not just money will be deposited into these vehicles. People can also put stocks, bonds, and other financial tools that would often be subject to capital gains tax into those accounts. That money can grow tax-free in these vehicles. We have here a situation where we started out with a savings vehicle and ended up with a significant tool for tax avoidance, which allows the wealthiest members of our society to shelter their money from taxes. That is why the parliamentary budget officer described this measure as potentially dangerous for the public purse.

He estimated that in 20, 30, or 40 years, the money that would no longer be paid to the Canadian government in taxes as a result of this measure could be equivalent to 0.7% of the GDP. The government feels that 0.7% of the GDP is too much to allocate to international aid. However, it does not seem to be too much to give away primarily to the wealthiest members of society, who would use the TFSA to shelter their investments.

That is why we think that the limit of $5,500 is entirely appropriate. In fact, only 17% of those who contribute to a TFSA and 7% of the entire Canadian population reach that limit. We agree with that measure.

We are not opposed to the creation of another tax bracket, which explains why we voted in favour of the ways and means motion that could not be debated or amended. It has a major financial impact.

However, there is now another important factor to consider and that is the tax cut for the so-called middle class. We are in a situation where that could be changed.

That is the path we chose. We voted in favour of Bill C-2 at second reading specifically because we wanted to try working in committee to get a clearer picture of what this measure as a whole means for the middle class.

Evidence from Standing Committee on Finance meetings shows that, systematically, almost every time I asked a question, it was about this issue. Most of the answers I got were pretty vague with respect to the impact. Some said that, basically, we were right: we would reach many more citizens and taxpayers and help many more people.

The government argues that this is part of a suite of measures that must be taken as a whole. This bill is not a suite of measures. It contains three distinct measures, one of which is very problematic.

If we look at the government's proposed measures as a whole, including the child tax benefit in the budget implementation bill, we see that many members of the middle class will not get a tax cut or any help from this government.

Single people with no children earning $40,000 a year, which is a fairly large portion of our society, I would say, will get nothing, either from this income tax cut or from other measures proposed by the federal government. An elderly couple earning $30,000 to $35,000 in pension income will get nothing, either from this income tax cut or from measures proposed by the government in the budget implementation bill.

A large part of the Canadian population will get nothing, but those people can clearly and accurately define themselves as being part of the middle class. I do not understand that, and the Liberal Party has not provided any explanation, apart from the fact that people elected them because of that, for refusing our offer to work together to help as many Canadians as possible, to help the entire middle class and not just those who are earning up to $217,000 a year. Those who are earning between $45,000 and $217,000 a year will benefit from the bill.

When I go to my constituency, how can I meet with the head of a banking institution, who may be earning $215,000 a year, and with someone earning $30,000 a year and explain to them that the former will benefit from it and the latter will not?

I do not know how the Liberal members feel when this question comes up. I suspect they will not be in a hurry to answer it. They are well aware of what kind of reaction they will get from those citizens.

We are in a Parliament that we hoped would be collaborative. I will not rehash yesterday’s events, but while the government says that it is willing to listen to our amendments and that it wants to gain our co-operation by working with us, we really feel that it just wants to push its ideas through as quickly as possible, without necessarily paying much attention to the positive effects that an opposition proposal might have.

I would like to have seen Liberal members ask more questions on this issue in the Standing Committee on Finance. However, their questions seem mostly to have been designed to elicit witnesses’ agreement with the government’s position. The Standing Committee on Finance plays a special role in this Parliament, as do all committees, in fact, which is quite different from the role of the House of Commons.

It is different because, here, we have a somewhat adversarial system, with the government on one side and the opposition on the other. However, committee is the only place where we can call each other by our proper names. We are not members for certain ridings, but rather members, period. Our role, whether on the government side or opposition side, is to make sure that the government is held to account and that the government's proposals are studied, scrutinized, and analyzed in order to ensure that they really contribute to the common good of the country.

We are talking about the current government, but I am not saying that the previous government did not do the same thing. Government members act like cheerleaders to applaud their government's proposals, rather than paying close attention to the detailed consideration of what is before them. Not only does the committee's work suffer, but so does Parliament as a whole, and so does Canadian democracy. This situation does not appear to be getting any better as time goes by, despite this government's commitment to do things differently and ensure that Parliament works more collaboratively.

There are measures that we support, including lowering the TFSA ceiling, which will still be indexed to $5,500. Combined with the other savings tools, this measure seems good to us. There is also the creation of a tax bracket for higher incomes. Despite the fact that it applies to incomes over $200,000, it will not be enough to ensure that people who earn $210,000, for example, pay more taxes, because they will pay less.

We feel that this other measure in Bill C-2 is problematic and fundamentally unfair. Contrary to what the government would have us believe, this measure does not meet a need of the middle class and does not apply to all those who belong to the middle class.

The member for Louis-Saint-Laurent makes a valid argument, even though we did not present it: when people voted for a tax cut for the middle class, they did not necessarily know where the middle class began according to the government's definition, and the government did not dwell on that either. However, if there is anything that was mentioned more often than the $45,000 threshold from which the cut would apply, it is the fact that this measure would not cost anything.

When the Liberals say that Canadians voted for this measure, we must realize that Canadians voted for their perception of this measure. That perception quite often was created by the Leader of the Liberal Party, who extolled the virtues of a tax cut for the middle class. Unfortunately, this measure excludes a lot of the middle class.

I can assure the House, that I hear my constituents talk about this and that every one of my colleagues has talked to me about it. This has been discussed by committees and also by our caucus.

Although we support the two measures, we fundamentally disagree with the third one, which we tried to amend. The government chose to ignore us. We debated this issue because it is important and it is being talked about in our ridings. We would have liked the government to listen more and co-operate with us. It did not. This morning, we were not expecting to debate Bill C-2 in the House this afternoon. However, we are discussing it again and we will have the opportunity to meet as a caucus to bring this discussion to a close.

Unfortunately, I do not think that was a very good thing for the government to do. People have rather strong opinions in this regard, even though there is still opportunity for discussion. I think that the debate at third reading will be the government's last chance to consider our demands and those of our constituents.

If the government members have suggestions or if they want to make amendments to initiatives other than this bill, which cannot be amended, our door is always open. With regard to this measure, unfortunately, we are being forced to seriously consider voting against the bill at third reading because the government has failed to listen to or show an interest in a large portion of the middle class.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to thank my colleague from Louis-Saint-Laurent. I found his remarks very interesting. He is a good speaker. It spices up the debate.

I would like to begin my question by pointing out a comment that he made at the beginning of his speech. He said that when the Conservatives were in power, they made responsible tax cuts. He mentioned the GST. According to the data that I have, the lowering of the GST from 7% to 5% over two years and the corporate tax cut cost over $16 billion, which completely eliminated the surplus that the Conservatives inherited, even before the recession hit.

The member should be careful about making comparisons that are not quite accurate.

However, one thing he did not mention in his speech that is in Bill C-2 is the TFSA limit. We know that the previous Conservative government wanted to increase the limit to $10,000. One thing we do agree with in this bill is the decision to bring the limit back down to $5,500, but to index it. We support this measure because many people think a TFSA is meant to be a place to put money that will generate interest, which will not be taxable. However, the tool can be used for many other purposes, including purchasing shares and all kinds of other financial tools. Capital gains on these tools would ultimately not be taxed.

The parliamentary budget officer estimated that this measure would cost about 0.7% of Canada's GDP in the medium term. I would like to hear my colleague's thoughts on why the Conservatives always wanted to increase the limit to $10,000, even though that would have had disastrous consequences for the Canadian economy.

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

Mr. Speaker, on behalf of my political party, I am pleased to speak in the debate on Bill C-2.

As we have seen just now, Bill C-2 contains the initial application of the new Liberal government’s financial measures. We recognize that Canadians spoke last October 19. We are true democrats. We respect the choice made by Canadians, and we want the government to respect Canadians.

The first thing that the government and any politician must respect is the commitments made during the election campaign. Unfortunately, in that regard, the least we can say is that this government got elected by saying one thing and is now doing exactly the opposite.

Bill C-2 is the first manifestation, if we needed one, of this sad reality. I said so just now in the question that I asked the Parliamentary Secretary to the Minister of Finance. Of course, we are all members of Parliament. However, he spoke as a parliamentary secretary, and I am happy to repeat publicly what I said before: this guy should be in cabinet and not just a parliamentary secretary.

What the member said just now is that, unfortunately, election promises could not be kept. With all due respect to the Parliamentary Secretary to the Minister of Finance, he did not answer the question. The Liberal Party made a commitment to bring in tax changes that, it said, would benefit the greatest number of Canadians. It is a point of honour, because it is a cornerstone of its platform. Those tax changes were supposed to be revenue-neutral. However, now reality has caught up with the Liberals: this government is making tax changes that are not revenue-neutral, but rather create a deficit.

That deficit is $1.7 billion. The parliamentary budget officer also says so, the very one quoted by the President of the Treasury Board just a few minutes ago as saying that everything is hunky-dory. I presume that the government has great respect for this institution, but this institution says, in black and white, that the tax changes made by the government in Bill C-2 will generate a deficit of $1.7 billion.

Not long ago, I heard the member say that families are content and that people are happy that money is being put in their pockets. I am quite sure people are happy, but can we afford that? No. When we do that, we must do so realistically, responsibly, and in a balanced way. Let us remember that our government, under the leadership of the right hon. member for Calgary Heritage, put forward measures to reduce taxes, at zero cost. There were 140 such measures in all.

Let us remember the most spectacular measure, taken in the first term: we lowered the GST from 7% to 6% and then from 6% to 5%. We promised to do that, and we did it. Need I also remind the House that years ago, the predecessor of the member for Saint-Maurice—Champlain, the Right Hon. Jean Chrétien, made an election promise in 1993 to abolish the GST? He never did abolish it, which led to a by-election to replace the minister, who left.

Sure, tax cuts are nice and changes to taxation are nice, but they have to be made realistically and responsibly, which is not the case with Bill C-2.

This is not the only time the government has made a promise about finances but done the opposite. Changes to the tax structure will cause a $1.7-billion deficit, and the same goes for changes to family benefits. The Liberal government is acting the same way. It promised that its changes would be revenue-neutral, but reality is catching up with it.

Changes for families, represented by the hon. member for Québec, the Minister of Families, Children and Social Development, my colleague and neighbour, were not supposed to cost anything. However, they are causing a $1.4-billion deficit.

Need I remind the House that the financial cornerstone of this government or any government is, without doubt, the budget? What did the Liberal Party say about the budget during the election campaign? It said there would be little wee $10-billion deficits for three years followed by a balanced budget and that everything would be fine.

The fact is that there will be a $24.9-billion deficit this year. That is the reality of this government: it says one thing but does the opposite. It promises a balanced budget but ends up in the hole. It says we will have small deficits but ends up with big ones. How are we supposed to trust this government? How can we believe a thing it says?

How can people not be even more cynical about politicians when, unfortunately, the government stands out so distinctly for promising one thing and then doing the opposite?

I am appealing to the government's common sense, and I am inviting it to make some changes and stop living beyond its means. A deficit is a burden for our children and grandchildren. Some will say that this is good for families and children. As I understand it, we are passing the burden to families and children. That is not a responsible approach.

Some colleagues opposite will say that when the Conservatives were in power, they ran up deficits. When we were in power and the right hon. member for Calgary Heritage led Canada, the country faced the worst global economic crisis since the Great Depression of the 1930s. Despite this terrible situation, we won the G7 triple crown because were were in power and because the Conservatives had a prudent and rigorous approach to managing the country. We are the best in the world with respect to the three fundamental aspects of the economy. We like to compare ourselves to the best in the world, because that is how we get good. We won the G7 triple crown under the rigorous management of the former government led by the right hon. member for Calgary Heritage. We had the best debt-to-GDP ratio, the best job creation record, and the best economic recovery. That is our government's legacy.

I want to emphasize the best debt-to-GDP ratio. We often hear the people currently in power say that they have the best debt-to-GDP ratio, which makes it possible for them to incur a deficit. It is because of the Conservatives that Canada has the best debt-to-GDP ratio. Had we used the Liberals' approach to managing the country during the economic crisis, we would not be the best. We would be the worst. They are making bad decisions.

I would like to remind Canadians that we left the House clean. We won the G7 triple crown. We had the best debt-to-GDP ratio. We left a surplus. We are not the only ones to say so. When the current government came to power, in November, what was the state of our finances? We had a $1-billion surplus. I am not the one saying so; the Department of Finance said so.

I got a document out of my desk, but I cannot show it. Why do I have it? I keep it close by because it is crucial to always remember what is fundamental to our political action. We are here to vote on legislation and budgets, but we must always have accurate information.

The Department of Finance indicated in the “Fiscal Monitor”, which is published by that department, that there was a $1-billion surplus for the period from April to November 2015. That has the Conservative government's signature all over it. That is how we left things financially. Unfortunately, the current government is living beyond its means.

I would like to say one last thing about the document I cannot exhibit. I think we have asked for this official document to be tabled at least 50 times. Unfortunately, the government systematically refuses to table a simple document that confirms our sound and good management.

In our view, the best thing for the Canadian economy is clearly wealth creation and job creation. However, wealth and jobs are not created by the government, but by private businesses, our entrepreneurs, our men and women who, through their intellect, enthusiasm, determination, and community leadership, create jobs and wealth. The government needs to be there to support them.

With deep sadness, our entrepreneurs have realized that there is absolutely nothing in the budget to help them. That is our vision.

The Conservatives believe that to help our businesses grow, markets need to be opened up. I have the great privilege of sitting next to my hon. colleague from the Vancouver area, who was the minister of international trade. For four years, with honour, dignity, and success, he conducted the negotiations on the trans-Pacific partnership, which is providing Canada and Canadian business people with access to a market of 800 million people. It is fantastic.

We are asking the government for assurance that this treaty will actually be ratified and the guarantees offered to our workers across Canada will be honoured, particularly regarding the famous issue of supply management.

In Bill C-2, we see that, unfortunately, that vision is not the right one, from our perspective. That is where the heart of political action lies. What vision do we have for the future of Canada? For us, the Conservatives, it is clear. It must also be said that for the Liberals too, it is clear. In our view, it is not the right one.

We believe that we have to live within our means, that we should not run a deficit in times of prosperity, which is in fact what was said by the Right Hon. Paul Martin, the former prime minister of Canada, but more importantly, the former minister of finance in the Chrétien government. In fact, his memory was honoured, not in the funereal sense, but for his historical importance to our nation, our country, when his portrait was unveiled just a few days ago.

Paul Martin said that in times of prosperity, the deficit must be eliminated and, above all, the debt paid off. That was a vision that we share and that, unfortunately, seems to have faded over time in the Liberal Party. To us, it is clear: you do not run a deficit when the country is prospering. The Liberal government has quite a different vision.

It is crystal clear. With Bill C-2, we see a government that shares not exactly the same vision, point of view, attitude, or policy as we had under our former leadership for the last 10 years. Let me be clear, in the last 10 years, our former prime minister was very strict on public funding, but first and foremost we left the House clean. There was a $1 billion surplus at the end of our mandate and also the big three of the G7: the best ratio of debt to GDP; the best at creating jobs; and the best in getting back our economy after the crisis. That is the Conservatives' signature. This is how we left the House. It was a really clean, good House left by the former Conservative government.

However, today what we see is a government that spends too much. It is a government that does not respect the fact that we have to live on what we have, instead of what we wish to have. When we create deficits in that situation, we send the bill to our children and grandchildren, even to those who are not born today. They will have to pay for the fact that today the current government is doing it all wrong and making bad decisions for the future of this country.

It is not too late. Maybe the government will open its eyes and make some modification, maybe. It is not too late. The bill is not yet passed. I can dream. I am a dreamer; not all the time, but I am a dreamer.

We strongly disagree with this attitude. Every party wants to give money to the people. We did that 140 times when we were in power. We reduced the debt, reduced the taxes, reduced income tax, and all that stuff. We did that 140 times in our government, but we did it very responsibly, which is not the case in this bill.

I hope that this House will reject Bill C-2.

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

Mr. Speaker, I wish to acknowledge my friend from Shawinigan. I am sorry, I mean the hon. member for Saint-Maurice—Champlain. When I see him I think of the Right Hon. Jean Chrétien, who of course was the member for that riding for many years.

I want to assure the hon. member that I hold him in high regard. He is a new parliamentarian, an intelligent, articulate man who works hard. He does not have any good ideas, but I have the utmost respect for him nonetheless.

I want to repeat what he said a few moments ago. He said, “We are going to do what we said we would do.” With all due respect, that is not exactly true because that party was elected on a promise that the tax changes announced in Bill C-2 would be revenue-neutral. Unfortunately, it turns out that there will be a $1.7-billion deficit. It is not the Conservatives that are saying so, but the parliamentary budget officer, whom the President of the Treasury Board was quoting earlier.

Could the hon. member explain why he says he is going to do what he promised to do, when in fact there is a deficit where the cost should have been nil?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, I would like to thank you for your wise remarks. We are talking about respect in the House and listening to one's colleagues.

I will come back to the important Bill C-2. As I was saying, during the election campaign, we promised to help the middle class because it drives our economy. When we consulted Canadians from coast to coast, they asked us to help them and their families and to grow the economy.

The first thing we did to help the middle class was to lower taxes, because we strongly believe that that is how we can help Canada's economy. That was the first thing we did, because Canadians told us that they wanted more money in their pockets in order to help their families and to grow the economy.

The second measure we are implementing, which was a key component of the latest budget, is the Canada child benefit. Members will understand that this is probably the most significant social measure since the introduction of universal health care in Canada. This measure will help nine out of 10 Canadian families and allow for simpler, tax-free benefits. This will truly help the families who need a bit more money. For example, it will help families send their kids to summer camp this summer and buy back-to-school clothes. This is exactly the kind of measure that Canadians want.

The second thing people asked us for was to grow the economy. In our budget, we included significant measures for infrastructure. We committed to investing $11.9 billion in infrastructure. When we travelled across the country, people told us that public transit was a big part of what we had to do. In our society, moving people and goods is essential to economic activity. It not only costs more money when people cannot move freely, but it also has a significant impact on our economy. We therefore made a historic commitment of $3.4 billion to be invested in public transit.

Now, let us talk about the important topic of water and waste water. We are also making around $5 billion in investments in this area. These investments will make it possible to rebuild wastewater systems or invest in infrastructure, so that we can take charge or work with the provinces and territories to improve our country's wastewater treatment systems.

There are some very flagrant cases. We know that some communities still discharge sewage without primary treatment. We know how damaging that can be to the environment. The case involving Montreal, with mayor Coderre, was quite clear. We have seen the impact that can have, and that is why we decided to make a historic investment in this area.

I would like to talk about social infrastructure. Historic investments are being made in what is known as affordable housing for Canadians. Such investments will help us move forward, just as our historic investments in innovation will help to achieve the kind of economic growth in this country that Canadians expect.

As far as Bill C-2 is concerned, I can say that people have had more money in their pockets since January 2016 and they have realized how important that was. The Conservatives often tell us that, from their perspective, promises have been broken, but I can assure the House that investing in middle-class Canadians and reducing their taxes was what had to be done. That is what Canadians really wanted.

I have the privilege to be here today and to take part in this important debate on Bill C-2, An Act to amend the Income Tax Act, at third reading, with a view to providing Canada’s middle class with a long-awaited tax break.

Since January 1, 2016, no fewer than nine million Canadians have been benefiting from this tax break. It is very important to understand that nine million Canadian men and women have been benefiting from this tax break since January 1.

The Liberal Party of Canada made this commitment during the election campaign. Since January 1, people have been benefiting from this tax break, which will enable us to invest in the economy. Canadians in every part of the country were asking the government to make investments and help their families. That is what we are hearing more and more, and that is exactly what this very important measure will enable us to do. The government was elected on the basis of a plan to grow the economy, and these changes are an important first step.

Personally, I made business and the law my career. I saw this investment as important, because it is exactly the kind of investment that helps the economy grow: putting more money in the pockets of Canadians.

The bill in question amends the Income Tax Act to reduce the second personal income tax rate from 22% to 20.5% and introduce a new personal marginal tax rate of 33% for taxable income in excess of $200,000.

During our campaign, we clearly stated our intention to help the middle class. It was the key point in our campaign. However, we also expected people with higher incomes to do more. Helping one another is part of the Canadian spirit and our identity. It was in the context of that promise that we announced our intention to Canadians. Today, I am happy to speak in the House about the fulfillment of that promise through Bill C-2.

This bill also amends other provisions of the act to reflect the new rate of 33%. It contains a number of rather technical measures. Obviously, when you change the top marginal tax rate in Canada, that entails a number of changes in the Income Tax Act. A number of provisions in the Income Tax Act are based on the marginal tax rate, which will now rise to 33%.

It also amends the act to reduce the annual contribution limit for tax-free savings accounts from $10,000 to its previous level, which, with indexation, will be $5,500 for 2016, effective January 1, 2016. We proposed to reduce this amount because we saw that only 6.7% of Canadians had taken advantage of the cumulative total that they could contribute to a tax-free savings account.

We told Canadians that our government would be based on science and facts. This measure was good public policy because, in its previous form, it benefited only a small group of Canadians.

We were elected to take measures that would benefit our economy, the middle class, and those who are working hard to join it. In December, at the first opportunity, the Minister of Finance introduced a tax cut that will put more money directly into the pockets of the middle class. I think Canadians realize that. On October 19, people made a wise choice. People wanted a government that would work for them, for the middle class, for those who are working hard to join the middle class, and for Canadian families.

As I said previously, some nine million Canadian men and women will benefit from this extremely important measure for equity and fairness in our country. The middle class has waited too long for an improvement. Despite the difficult economic situation, we have helped the middle class. We made a promise, and today I can say that we have kept that promise. Income tax has been reduced.

After this bill was introduced, our government tabled the 2016 budget, which is an essential step in ensuring economic growth and revitalizing the Canadian economy. Canada was built on optimism, often in the face of challenges that seemed insurmountable. However, the promise of a better life was broken over the past 10 years.

The confidence of many middle-class Canadians in the economy was shaken, and we wanted to restore it. For once, Canadians have a government that is standing up for them by taking measures that will promote economic development, while at the same time taking into account the most vulnerable people in our society, those who are in the middle class, and those who want to join it.

As I was saying, Canada was built on optimism, often in the face of challenges that seemed insurmountable. Even though our economy is still growing, middle-class Canadians are having difficulties.

Since I was elected, one of the most edifying things I have had the privilege of doing is to meet with those Canadians, from Moncton to Yellowknife. I went to small towns and meetings around the kitchen table where people explained their economic problems and the ways we could help them.

For once, we consulted people who had never been consulted before. It was the first time they had expressed their opinion on the federal budget and told people from the Department of Finance and the Minister of Finance, obviously, or me about their desire to see the Canadian economy grow and the need for inclusive growth.

For too long, middle-class people, families, and our young people were excluded from that growth. We had to restore such measures to benefit families and middle-class people.

Many Canadians are working harder and longer, while the cost of living keeps climbing. I remember meeting a family in Quebec City who asked for our help because they were no longer able to make ends meet. People told us that they needed a government that would listen to them, and that is exactly what we have done.

Middle-class families simply do not feel as if their lot has improved in the last 10 years, and the facts bear that out. That is why we took resolute action on January 1 to put money back in the pockets of middle-class people. The time has come to look to the future once again with the hope and optimism of the generations that came before us.

Mr. Speaker, you have often said, in your wisdom, that the privilege of being a member of this House lies in understanding the great institution of which we are part and always keeping in mind the people who sent us to Ottawa to work for them. That is precisely what we did when we listened to them and took action in this area.

We must embrace the spirit of our country’s founders and build on that legacy by creating opportunities for advancement and mobility that are as vast as those that existed in the past. We have to do so in a way that enables Canada to realize the enormous potential for growth that can come from switching to a low-carbon economy, where clean technologies and economic growth go hand in hand. We already have the keys to that future.

This week, the Minister of Finance had his first meeting with the Advisory Council on Economic Growth, which is composed of eminent experts from around the globe. That committee will work hard to put forward measures designed to promote inclusive, long-term growth in Canada.

That morning, I had the opportunity to participate in that very interesting meeting chaired by Dominic Barton of McKinsey. I should point out that it is the first council with gender parity. I am pleased that our advisory council has as many women as men from all sectors of the economy who talked to us about growth and innovation.

Let us imagine the Canada of the future and identify our strengths, but let us also be conscious of our country's demographic challenges and the fact that the Canadian economy accounts for 2% of the global economy. We must draw inspiration from best practices employed elsewhere in the world if we want to understand how to promote a stronger economy.

We are going to do what we said we would do. As we said with respect to the advisory council, we already have the keys to the future. Yes, we have challenges here in Canada, but we also have tremendous opportunities and a highly educated population.

Our country has vast natural resources. We can count on stability, predictability, and the rule of law. Those features will attract investment here.

As I said, Canadians are among the best-educated people in the world. We rank first among members of the Organisation for Economic Co-operation and Development, the OECD. More than half of all Canadian adults have a post-secondary degree, and everyone here knows that education is the foundation. No society has experienced strong economic development without having made education a priority. That is exactly what we are doing, and Canadians have one of the highest levels of post-secondary graduation.

We are world-renowned for our research and scientific discoveries. We are often on the cutting edge of clean technology, which is becoming increasingly prevalent internationally.

This is important because Canada invests a great deal in research and development. We now realize, however, that we need to do more in the way of marketing. We have to move from research and development into producing a product. Once we have a product, we need a customer, and once we have a customer, we can hope to export our product. That is how we will successfully create economic growth in Canada.

We have an abundance of natural resources that are surpassed only by the ingenuity and diversity of our people. That is also important. I often say that our greatest resource is human capital. We know, and I am sure that all my colleagues on both sides of the House will agree, that the greatest capital we have in Canada is human capital. Canadian men and women have achieved extraordinary things that have advanced humanity.

My colleague, the Minister of Transport, is a great example. He has done extraordinary things for this country. He went into space. He taught an entire generation of young Canadians, myself included, how we could dream big and realize our dreams through excellence. If there is one man who embodies excellence in Canada, it is the Minister of Transport, because not only did he give young Canadians a glimpse into space, but now he is serving his country with distinction as a member of Parliament, like all my colleagues.

Given that we have one of the lowest debt-to-GDP ratios in the G7, we know we can make these wise investments for the middle class. The Minister of Finance has been applauded by the Financial Times and the Wall Street Journal, by Ms. Lagarde of the International Monetary Fund, and by officials at the OECD. They have said that Canada is building its future on a solid foundation.

I will use my last few seconds to say how proud I am to have worked with my colleagues on both sides of the House, listening to Canadians. We drafted a budget that not only works for Canadians today, but also builds on a solid foundation to ensure that the Canada we have today will continue to prosper for decades to come.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, first of all, I am pleased to speak today to Bill C-2, which would lower taxes for the middle class.

The House proceeded to the consideration of Bill C-2, An Act to amend the Income Tax Act, as reported (without amendment) from the committee.

Excise Tax Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Yes. We are going to see real change, Madam Speaker, with the new government, I can assure the member of that and I will talk a bit about that real change.

I suspect, if we would have had a dialogue with the Conservative minister of finance at the time, the types of arguments he would have been bringing forward would have been something to the effect of, “What is the actual cost?” and “Where are you going to get the money to replace it?”

We are talking an estimated $200 million a year, in terms of lost revenue. An hon. member has just indicated that it is less than $100 million.

I think we should take a look at the percentage difference, because it is important for us to recognize, and I do believe the member did, that there are current rebates. When we talk about the actual dollar amount, my understanding is that it is closer to $200 million over the years.

If we take a look at those selected boards where there are rebates, and we are talking about the municipalities, as has been pointed out, in I believe 1994 the rebate was raised to 100%, recognizing through our municipalities the important role they play. There were different types of stakeholders at the time that articulated why we needed to move in that direction, and it was 2004. I believe it was a Liberal administration back then that recognized that this was something that had some value to it.

We also give exemptions to universities and public colleges of somewhere in the neighbourhood of 67%. If we take a look at our school authorities today, and this is what the member is trying to enhance, it is estimated at about 68%. Then for hospital authorities, facility operators, and external suppliers it is based on 83%.

What we are really talking about is that gap between 68% and 100%, and this is what the member is advocating for.

I know a question was put forward to the member with respect to the type of consultation or representations that might have been made to the member. I am not too sure in terms of exactly where the provinces themselves might be at.

We also need to take into consideration, when we talk about school boards or school entities, that there are public entities and there are private entities. I am not 100% clear, but I believe that the member across the aisle, by his actions, is implying that it would apply to both private and public. I do not know to what degree there would be an additional cost, but I can assure members that there would be an additional cost factor to it if we have both private and public.

I think the current government has been very clear in terms of what our taxation priorities are. We do recognize the need for reforming our taxation. We have seen some of the most significant changes probably in the last 15 or 20 years in terms of taxation policy with an underlying theme that what we want is for taxation to be fair. We want people to be paying their fair share.

That is why one of our government's first initiatives back in December was Bill C-2 which provided a middle-class tax break which will ultimately benefit all Canadians indirectly and nine million directly. That was a very important priority of this administration. Along with that particular tax change, we saw a tax increase for Canada's most wealthiest, those who have an income in excess of $200,000 a year, again with the idea that Canadians expect a fair taxation policy.

The Government of Canada has not given up. We recognize there are many inequities within our taxation policies. That is one of the reasons we made a commitment to strengthen the middle class and grow the economy in the long term. The government made a commitment for the coming year to undertake a review of the tax system as a whole to ensure all tax measures are fair, efficient, and fiscally responsible.

It is very important to recognize that the federal government has a responsibility to work with the different stakeholders and get a sense from them where they believe the inequities are and how we might be able to assist in trying to cure some of those inequities while at the same time establishing some priorities as to where we might be able to act.

Would it not be wonderful if the Conservatives had left us in a better situation as opposed to a deficit? Would it not be wonderful if they had provided us with a better situation? Would it not be wonderful if we could just wave a wand and see if we could deal with all tax inequities and deliver the types of tax breaks that we on the Liberal side would like to deliver? It might take a bit of time in order for us to do that.

Do not underestimate the commitment of this government and our ability to work with others to deal with issues that come before the House of Commons, like the member opposite who brought forward Bill C-241. We recognize that is an issue which we will have to look at.

I would suggest to the Parliamentary Secretary to the Minister of Finance or the Minister of Finance that in the negotiations and the consultations that will take place going forward, one of the agenda items could very well be the issue of our school divisions both public and private.

I would encourage the member across the way to continue to lobby any way he can. I know through consultations with the Government of Canada what we have seen is a genuine commitment to work with Canadians, consult with Canadians on the very important issues of tax fairness. I can assure members as we witnessed even in that small window from the moment in which we took office to the time we presented legislation on tax fairness to the presentation of the budget, that thousands, and if we factor in the Internet, hundreds of thousands of Canadians were brought in to the circle of consultation in the hope of improving our system.

The good news to the member across the way, even if he does not get what he wants within this legislation, that at the end of the day, he is looking across the way at a government that is genuinely concerned about reforming our tax system. We will do our work in terms of talking to the many different stakeholders, because we want what all Canadians want, and that is a higher sense of tax fairness.

[Trevor McGowan]

No, they're separate measures.

This is actually more closely related and is a purely consequential amendment to the introduction of the new top marginal rate. The proposed amendments that you mentioned that deal with the donation of proceeds from the sale of real property or private company shares to a charity were announced in budget 2015, and two were to have become effective in 2017. They've not been included in the bill and they were never enacted. In budget 2016, the government announced its intention to not proceed with those proposed amendments.

The proposals in Bill C-15 are unrelated to those. What they relate to is, as I said, further consequential refinements to the charitable donation tax credit that followed from the introduction of a new top marginal rate. Individuals can obtain a charitable donation tax credit in respect of their gifts. Currently—and this is not proposed to be changed—it's 15% on the first $200 of gifts. Previously, and previous to Bill C-2 and this, it's $29% on gifts in excess of that.

Those sets of proposed amendments provided, back in December, a set of rules that—to the extent you're an individual and you have income in the top marginal bracket so it's now taxed federally at 33% instead of the 29%— effectively, given the old rates, gave you a deduction. For people who are taxed at lower rates, it provided an incentive.

For people who have income in the top marginal bracket that is subject to the top 33% rate, the Bill C-2 amendments would provide a 33% tax credit. Following up on the government's announcement, those amendments that are in Bill C-2 provided further refinements to that policy, specifically for trusts. As I mentioned before, most trusts are actually subject to flat taxation, so all of their income is taxable at the top marginal rates.

What these amendments would do—as well as, in fact, replace what is in Bill C-2—is provide that, if you have a trust that is subject to top flat-rate taxation, it can access the new 33% tax credit to offset its income that's taxed at the top rate. It doesn't have to be income in excess of $200,000, because their first dollar of tax is taxed at 33%. It ensures that trusts have the same incentive to donate as high-income natural individuals.

Second, it provides that, in situations where you have a trust, a taxation year can straddle the end of 2015. It starts in 2015 and ends in 2016. It, for that year, can be subject to the.... That might be the case for a graduated rate estate where an individual dies mid-year. It can be subject to the top marginal rate of 33% on its income for the year. This would provide that gifts made before 2016—in the first part of that taxation year that straddles the year-end—can qualify for the new higher 33% tax credit as well, so that they get an effective deduction against their income taxes for those gifts.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I am still not 100% clear. Perhaps I might ask you about the best way for most people who are in the situation of having set up trusts for their disabled children and would like to know the consequences this tax increase may have for their families.... When the beneficiary, who is disabled, stops receiving it because they are deceased, what happens in the case of the rest of the family members, who are left to close things up in terms of that trust?

I would like more clarification, if you could, with real examples from you, as to how this tax treatment changes for typical, average families who have set up these trusts—and there are many of them across this country.

I will move on, because I know we are limited in time, so if you could provide that—maybe two or three examples, if there are variables in there that I haven't hit on—I would really appreciate it.

Second, the same section of the notes we were given talks about the charitable donation tax credit in Bill C-2. This is where the government has moved to take away the ability that was previously put in for persons with real estate and such giving those to charity.... I don't totally understand the description you have given me here.

Again, in a situation where a person bequeaths to a charity assets in real estate, the previous government put into place rules that they could do that without taxation, and now there is going to be taxation on those, or this whole provision is going to be removed. Is this what that speaks to?

[Trevor McGowan]

The general rule for trusts is they're subject to taxation at the top marginal rate on all of their income. The two exceptions to that rule are qualified disability trusts and graduated rate estates that arise when an individual dies.

For qualified disability trusts, as you pointed out, the policy is that these are trusts that are set up to support a disabled individual. They are therefore provided access to the graduated rates and not the top rate of tax, which was 29% last year. Under Bill C-2, that would be 33%.

The access of a qualified disability trust to the graduated rates is predicated on the income of the trust being paid to an eligible beneficiary, someone eligible for the disability tax credit. If ultimately there has been income accumulating in the trust that has been taxed at these lower rates, and income is later paid to someone who would not be entitled for it to continue as a qualified disability trust, then the rules have what is called the “clawback” of the graduated rates. This essentially provides an additional tax in respect of the lower rate in previous years, where an amount has ultimately been paid out to a non-qualifying individual.

This would prevent, for example, a qualified disability trust from being set up notionally in support of someone who is actually disabled and who would normally qualify, but then, after earning income in the trust for a number of years and taking advantage of the lower graduated rates, ultimately being paid out to someone else—perhaps the settler of the trust or whomever—who doesn't qualify. That's the policy underlying the qualified disability trust recovery rules. That's why, with the amendments that are consequential to the introduction of a new top marginal rate, it follows. The existing rules reference the previous top marginal rate of 29%, and the new rules would reference or be built upon the new top marginal rates. That policy actually remains consistent.

[Pierre LeBlanc, Senior Chief, Quantitative Analysis, Personal Income Tax Division, Tax Policy Branch, Department of Finance]

There is a stat that nine out of 10 families will be better off under the Canada child benefit than under the current system of benefits.

If you were to take other measures, the middle-class tax cut that was introduced on December 7, in Bill C-2, the elimination of income splitting for families with at least one child, the elimination of the children's fitness tax credit, and the children's arts tax credit, and took those together, you'd still be better off. One piece of analysis we did do is that about nine out of 10 families would be better off, so it's the net of all those measures.

[Trevor McGowan]

Part 1 implements certain income tax measures that were proposed in the March 22, 2016, federal budget. I'll go through each in order, as I'm aware of the time constraints.

It would eliminate the education and textbook tax credits.

It would exempt from taxable income amounts received as rate assistance under the Ontario electricity support program.

It would maintain the small business tax rate at 10.5% for the 2016 and subsequent taxation years, and make consequential amendments to the dividend gross-up factor and dividend tax credit rates.

It would increase the maximum deduction available under the northern residents deduction as well as eliminate the children's arts tax credit, and eliminate the family tax cut credit. It replaces the Canada child tax benefit and universal child care benefit with the new Canada child benefit. It would eliminate the children's fitness tax credit and introduce a new school supplies tax credit.

It would extend for one year the mineral exploration tax credit.

It would restore the labour-sponsored venture capital corporations tax credit for purchases of shares of provincially registered labour-sponsored venture capital corporations for the 2016 and subsequent taxation years.

It would introduce changes consequential to the introduction of the new 33% individual tax rate that's in Bill C-2 currently.

Part 1 also implements other income tax measures that were announced by the previous government, but had not been enacted. The current government's intention to proceed with these was announced as well in the March 22, 2016, budget.

These include: amendments to the anti-avoidance rule in the Income Tax Act that prevents the conversion of capital gains into tax-deductible intercorporate dividends; a measure qualifying certain costs associated with undertaking environmental studies and community consultations as Canadian exploration expenses; rules ensuring that profits from the insurance of Canadian risks remain taxable in Canada; amendments ensuring that the dividend rental arrangement rules under the Income Tax Act apply where there's a synthetic equity arrangement in place; rules providing specific tax rules in respect of the commercialization of the Canadian Wheat Board, mainly including a tax deferral for eligible farmers; a measure permitting registered charities and registered Canadian amateur athletic associations to hold limited partnership interests; rules providing an exemption to the withholding tax requirements for payments by qualifying non-resident employers to qualifying non-resident employees; rules limiting the circumstances in which the repeat failure to report income penalty will apply; amendments permitting the sharing of taxpayer information within the Canada Revenue Agency to facilitate the collection of certain non-tax debts; and lastly, amendments permitting the sharing of taxpayer information with the office of the chief actuary.

Health

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, I am pleased to rise today to speak to the question that I asked the Minister of Health with respect to Bill C-2, the former Conservative government's so-called respect for communities act.

I want to begin by taking a moment to commend the minister for her decision to visit lnsite, Vancouver's life-saving safe injection site, in January. This visit was an important symbol of the welcome and necessary change in tone from the Liberal government with respect to evidence-based, harm-reduction policy within our health care system.

I myself have visited lnsite and can attest first-hand to the incredible work that it does to reduce overdoses, lower the transmission of infectious diseases, provide essential health services, including addictions treatment, and most importantly, save lives.

However, words are not enough. Communities with individuals suffering from addictions, serious mental illness, and infectious diseases need a better, more responsive and more caring health care system. Therefore, I was shocked by the minister's statement in March that she has decided not to repeal Bill C-2. This harmful legislation runs diametrically against progressive health policy, and erects unnecessary barriers to the opening of new life-saving safe consumption sites in communities that need them across Canada.

Upon the passage of Bill C-2 in June 2015, a coalition of 65 health, patient and harm-reduction advocacy groups from across Canada issued a public declaration condemning this legislation. They broadcast a clear warning to the Canadian public about the serious problems with this legislation. The following are a few quotes that sum up their position:

Bill C-2 will put the lives of...vulnerable Canadians at risk by establishing excessive and unreasonable requirements for health authorities and community agencies looking to open or continue operating supervised consumption [sites]....

This bill...establish[es] 26 new requirements applicants must meet before the federal Minister of Health will even consider an approval to operate a [supervised consumption site].

The barriers this bill...presents to accessing [supervised consumption sites will] allow a public health emergency to [be treated] under a law-and-order agenda...expos[ing] patients and communities to infection, suffering, and death.

Among the prominent signatories to this declaration are Toronto Public Health, the BC Centre for Excellence in HIV/AIDS, the Association of Ontario Health Centres, the Canadian HIV/AIDS Legal Network, and the BC Centre for Disease Control. Calls for more harm-reduction facilities are only growing as overdose deaths continue to rise across Canada.

Just last month, British Columbia provincial health officer Dr. Perry Kendall declared a public health emergency after more than 200 overdose deaths were reported in my province in three months. Nearly 300 Albertans died of overdoses in 2015, more than double the 2014 death toll. Similarly, Ontario has seen a 72% increase over the last decade. Health authorities in Montreal, Toronto, and Victoria are now working to open life-saving harm reduction facilities as they struggle to save lives. Unfortunately, the onerous provisions of Bill C-2 continue to delay the opening of new safe consumption sites.

It is time for the minister to move from symbolism to action in harm reduction and commit to repealing Bill C-2 once and for all. Will she do so?

Budget Implementation Act, 2016, No. 1

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

Mr. Speaker, before I get started, I want to acknowledge my mother since it was Mother's Day yesterday and I was not able to join her. I also want to acknowledge all the mothers in Fort McMurray and Alberta who could not be with their families yesterday. We need to honour them.

As the NDP spokesperson for small business and tourism, it gives me great pleasure to bring our voice and concerns about Bill C-15. Primarily, I will focus on the Liberal promise to reduce taxes for small business from 11% to 9%, and to help those who are not in the middle class to join the middle class.

Before I talk about the tax for small business, I want to touch a little on incorporate taxes in Canada, and the history of that.

Consecutive Liberal and Conservative governments have been reducing taxes over the last few decades. We have seen corporate taxes go from 28% in the late 1990s and 2000s to 15% today, which is a significant tax decrease. During that time, it has shifted the tax burden to the people. It is a reckless way to promote a healthy economy, and it is a failed experiment. It failed in Japan and Hong Kong, and it has resulted in what I believe is an unfairness in delivering taxes.

The result has created huge inequality in our society. The gulf between the wealthy and the majority is growing faster and more widely in Canada than in any other developed nation. The richest 100 Canadians now hold as much wealth as the bottom 10 million combined. However, when we look at small business taxes in comparison, they have remained at about 11% since the 1980s. While Canada's largest corporations have had record profits, they have a lot of dead money. We talk about dead money that is leaving our communities, sitting, and not circulating in our economy.

Recently, over the last few days, while we have been debating the bill, and on Friday notably, there was a lot of Liberal rhetoric about small business. The Liberals painted small business as tax cheats. They talked about small business as being bad fiscal money managers. However, these are the volunteers in our community. These are the people who donate to our local charities. They are the people who serve on our boards. They are the cultural innovators of our communities in Canada. Therefore, it is really disappointing to hear this rhetoric from a government that went across Canada and promised a small business tax break from 11% to 9%.

This proposal was put forward by the NDP in the last parliament, which the Conservatives supported and on which the Liberals ran. All parties ran on a platform to help small business, and this is a group of individual businesses and a business community that are the job creators in our country. They are the economic drivers of our country, and the government has failed them. Promises have be made for decades and we have constantly failed them. As a result, there is a lot of mistrust with small business.

This is a very important time. This is an opportunity for Ottawa to create trust with small business, to create that intimate relationship with it. Small business people are at the front line of our communities. They know when the economy is changing quicker than any other business group in our community.

I will link back to my experience as a previous executive director of a very successful chamber of commerce and as a business owner. I remember in 2008 when the greatest economic downturn since the 1930s happened in our country. There was a huge bailout for Canada's largest corporations, but small business people were left behind. They were left with no bailout and no help from the federal government. They felt betrayed. The distrust with Ottawa was apparent.

I was picked up by a taxi driver the other day and he brought up his story about how he had a car dealership. As he ran his business, he watched all these corporations being bailed out while he struggled to make ends meet. Finally, just a year ago, he lost his business as a result of the recession. He was hanging in there, trying to get behind the big mess that was created, and the government did nothing to help him. He felt no one in Ottawa, in the House, was standing up for him. We had failed to deliver promises to small business, and we are doing it again.

The cost of not delivering this tax break to small business, as we know from the parliamentary budget officer's report, is $2.2 billion over the next four years. On average, that is approximately $3,529 per small business. People were counting on this. I talked a little earlier about how 78% of all new jobs were created by small business. Medium-size businesses create 12.5% of all new jobs, while big business creates less than 10%.

When we talk about their role in economic development, small business plays a key role. We really need to start talking about what kind of economy we want. We want local ownership, we want local jobs, and we want to keep money in our communities.

There's an organization in British Columbia called LOCO BC. It does some great work. It has talked about money recirculating in the communities. It did some research and found that if $100 was spent at a business in the local community, $46 would be recycled in the community versus $18 at a multinational corporation.

We talk about economic development and doing it differently. If we invest the $2.2 billion that were promised for small business, that money will circulate 2.6 times, rather than what is spent on giving tax breaks to multinational corporations. This is an opportunity.

Instead the government has chosen to do the reverse. It told small business that it would get a tax break, then failed to deliver on that promise. This, instead of plugging the economic leakage in every riding across the country, and really keeping money in our communities.

Many small business owners were counting on that tax break. They were relying on it to buy new equipment so they could grow, maybe even give someone a raise in their. This is an opportunity right now for us to build trust with small business people, show them that Ottawa is listening, and start tackling inequality.

We keep hearing about the middle class, helping to grow the middle class, helping those who are not in the middle class to join the middle class. We saw in Bill C-2 that anyone earning less than $45,000 would get nothing. We know that a lot of small business people do not earn $45,000 a year. While we talk about helping those to join the middle class, it is not being delivered by the Liberal government.

I read a quote from the Canadian Federation of Independent Business, from the vice-president for B.C. and Alberta. He calls the budget about as close as it can come to a betrayal as is humanly possible. He said that the Canadian Federation of Independent Business was hoping and expecting to see the tax cut, and the fact that the government had put it on hold was extremely disappointing.

This is, again, a tax break that was promised, door to door, city to city, community by community across the country. The government is failing to deliver on this promise, but it is clear that it is doing what Liberal Parties have done in the past. It is about big business and about protecting CEO stock options instead of taking care of the people who have built our communities.

Are the government members in the House willing to go home and ask their small business owners if they are okay that the government is not going to deliver the tax cut promised, 11% to 9%? I would like them to ask them how they feel about that broken promise.

In survey after survey, the number one thing small businesses have asked for is fairness in tax breaks, so they can get the same fairness that big corporations have been getting for decades.

Second Reading

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, I will be splitting my time with the member for St. John's South—Mount Pearl.

I am pleased to rise today to speak to Bill C-15, the budget implementation bill.

Just a short time ago, I had the opportunity to stand and speak to budget 2016, which I referred to as a middle-class, or better yet, a growth budget. I spoke about a budget based on the fundamental principles of investing in and strengthening our middle class as well as revitalizing the Canadian economy with a historic $120-billion infrastructure investment plan.

I also talked about how the budget would help ensure a prosperous future for the residents of my riding of Vaughan—Woodbridge, and in fact, for all Canadians.

Most important, I spoke about how, as a father of two young daughters, Natalia and Eliana, budget 2016 puts in place a plan for economic growth not only for today, but for successive generations so that all our children will inherit a more prosperous and hopeful country.

Bill C-15 is the concrete foundation emanating from the budget 2016 blueprint. The bill makes real the principles and commitments laid out by our government, such as the principles of greater tax fairness for Canadians, the belief that we should be there for our seniors to ensure they have a dignified retirement, a firm commitment to families with the introduction of the truly transformational Canada child benefit, a large step forward to honour our commitments to Canada's veterans, and significant improvements to the Employment Insurance Act.

Bill C-15 also continues to work on strengthening our financial system with the introduction of a bail-in regime for banks, which ensures that Canada's banks remain the soundest in the world, and very importantly, that Canadian depositors and taxpayers remain protected.

Bill C-15 contains 15 divisions. It had to be substantial, because our budget made substantial commitments to Canadians, and the technical underpinnings of these commitments are contained in this piece of legislation. Because there is so much to speak about in the bill, I am going to focus on a few sections.

I have stated how proud I am of this government's commitment to families, and Bill C-15 makes good on that commitment by introducing the Canada child benefit. The Canada child benefit will replace the current system of the Canada child tax benefit and universal care benefit. This transformational CCB will be simpler, tax-free, and paid monthly to eligible families beginning in July of this year.

Nine out of ten Canadian families will receive more under the Canada child benefit than under the current system. Overall, about 3.5 million Canadian families will receive this benefit, with the average increase in child benefits at almost $2,300 annually.

Independent analysis, and I emphasize independent analysis, indicates that 300,000 fewer Canadian children will be living in poverty in 2016-17 than in 2014-15.

I am proud to be part of a government that is taking this bold step to build a better and what I believe is a more just and inclusive society.

As I have stated repeatedly, seniors built this great country and we will always be indebted to them. Bill C-15 contains measures to increase the GIS, the guaranteed income supplement, by providing up to an additional $947 per year to our most vulnerable seniors, single seniors, the majority of whom are women. Seniors with personal incomes, excluding OAS and GIS payments, between zero and $8,400, will see increased benefits. This step will help improve financial security for about 900,000 of our most vulnerable senior Canadians.

Members should know that budget 2016 does not impact pension income splitting for seniors. This will remain in effect.

A large portion of the budget implementation bill addresses regulatory changes to our financial system. There is a very good reason for this emphasis in the legislation. The strength of our economy and the middle class in large measure rests on the stability of Canada's financial institutions. Canadians rely on our banks and credit unions on a daily basis for virtually every aspect of their lives.

While the failure of a large Canadian bank is very unlikely, it is still important that authorities have adequate tools to promote and preserve financial stability as well as to protect taxpayers in a crisis. Canadian banks are among, and I would argue are, the soundest in the world. They have robust levels of capital, lending practices that are sound, and stood out as pillars of strength during the 2008 global financial crisis.

I had a first-hand view of the global financial crisis. I know full well the benefits of the sound regulatory environment governing our financial system.

I would be remiss if I did not add that, while I worked in New York City during the 1990s, it was a Liberal government under Prime Minister Chrétien and finance minister Paul Martin that said no to the Canadian banks merging. I believe this decision is the major reason our banks came out of the 2008 global financial crisis with flying colours.

The bail-in regime contained in Bill C-15 would strengthen the tool kit and only apply to Canada's domestic systematically important banks and allow our regulators to recapitalize a failing bank by converting eligible long-term debt into shares.

More important, the bail-in regime makes it clear that the shareholders and creditors of Canada's largest banks are responsible for the banks' risks, not taxpayers. This way Canadians are not stuck with the tab in the event of an economic crisis.

This regime is consistent with international best practices and standards that were developed following the financial crisis of 2008 and although we have a robust banking sector, the provisions contained in the legislation would provide the legislative framework for the regime, with regulations and guidelines to follow.

I wish to make clear to all Canadians that insured and non-insured deposits would continue to be protected by the Canada Deposit Insurance Corporation.

In addition to the bail-in provisions, there are also a number of technical changes in this legislation which would help strengthen credit unions and the CDIC.

Bill C-15 would also help Canadian families by putting into place changes to the Employment Insurance Act which would assist those Canadians impacted by the very unfortunate situation of a job loss. In fact, the changes our government would implement would increase employment insurance payments to unemployed Canadians by $2.5 billion over the next two fiscal years.

Key improvements include extra weeks of benefits for workers in regions affected by a downturn in commodity prices. In addition, the waiting period would be reduced from two weeks to one week and would provide unemployed workers with hundreds of dollars more at the time they need it most.

Our government will work and create the conditions for all Canadians to find meaningful employment. That is what we want. However, we must ensure a system that would provide help when Canadians and their families require it.

During the election campaign, one of our key commitments was to greater tax fairness for middle-class Canadians and all Canadians. Our government has also introduced Bill C-2, which would lower the income tax rate for middle-class Canadians. Today, over nine million Canadians are benefiting from lower taxes, with a total tax reduction of approximately $3.4 billion.

Bill C-15 would provide even further tax fairness measures with amendments to the Income Tax Act contained in the first three parts of the bill. For example, we have added insulin pills and needles, feminine hygiene products, as well as catheters, to the list of items that are exempt from GST/HST.

The budget bill contains provisions that would increase the maximum benefit under the northern residents deduction, exempt taxable income amounts received as rate assistance under the Ontario electricity support program, and, quite proudly, introduce a teacher and early childhood educator school supply tax credit. This measure alone would provide a benefit of $140 million over five years in tax relief to our educators.

These are just a few examples of the elements contained in Bill C-15.

As I had previously stated, budget 2016, the middle-class or growth budget, provides a blueprint for a hopeful future for all Canadians. Bill C-15 is a solid legislative foundation for the future.

I hope my colleagues on both sides of the aisle will join with me in supporting the bill.

Finance

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I have the honour to present, in both official languages, the third report of the Standing Committee on Finance, in relation to Bill C-2, an act to amend the Income Tax Act.

The committee has studied the bill and has decided to report the bill back to the House without amendment.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

During the various committee meetings on Bill C-2, I have quite frequently brought up the change in the tax rate and its potential effectiveness in reducing inequalities or stimulating the economy. To me it is clear that all of the presentations we have heard on this show that the tax cut for the so-called middle class introduced by the government is probably the least effective measure among those that were presented or promised by the government, despite the fact that this is a key measure.

If we really want to reduce the tax paid by the middle class through an amendment that would still fit into the framework and the mandate of the bill, we could amend this proposal; rather than reducing the tax rate of the second bracket from 22.5% to 20% as proposed in the bill, a measure that would cost about the same would be reducing the first tax bracket from 15% to 14% for all incomes of over $12,000, rather than targeting incomes above $45,000.

That is the proposal we have made. I won't debate it any further, because I think I have had ample opportunity to do so in the work of the committee. I sincerely hope that the government, if it really wants to give the middle class a break, will allow all of the middle class to benefit, and not only a certain number of them by including incomes that are far superior to what can be defined as middle class, such as incomes of $200,000 to $217,000.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both very much for your responses.

I would like to thank the witnesses for their presentations. This will conclude our witnesses on Bill C-2.

We will suspend for a few minutes and come back to deal with clause-by-clause.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

The measure in Bill C-2 was among the most discussed topics during the election and after it. It is supposed to provide a tax cut to the middle class. However, everyone agrees that that is not really the most effective way to help the middle class. That is the conclusion I have come to.

The government points out that it is the first in a series of measures. The second, which is also contained in the federal budget, is the Canada Child Benefit. However this will not help seniors who earn less than $45,000 a year, nor childless couples where both spouses earn less than $45,000, nor single people who earn less than $45,000. In the final analysis, none of these people will derive any benefit from these measures that are supposed to reduce inequalities.

Is that also your opinion?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

What do you think about that, Mr. Veall? I don't know if I need to repeat my question. I would simply like to hear your opinion as to the impact on inequalities of an alternative measure, which would have been to reduce the first tax bracket from 15% to 14%, rather than the measure contained in Bill C-2 which reduces the second tax bracket from 22% to 20.5%.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

I thank all of you.

With the greatest respect, I would like to correct what Ms. Raitt said. She mentioned that the tax cut would give the average Canadian 90¢ a day. That is not quite accurate. The average Canadian will not benefit from a tax cut, since we are talking about Canadians who earn $45,000 or more. The average is well below that, which was in fact mentioned by Mr. Zorn in his presentation. So when we talk about 90¢ a day, that does not apply to the average Canadian, but to Canadians who have higher incomes.

Mr. Zorn, I really liked your presentation and your report on Bill C-2.

My questions will be addressed to Mr. Zorn, Ms. St-Hilaire and Mr. Veall, if I have the opportunity.

You will have looked at the report of the Parliamentary Budget Officer on the impact of the tax cut and on an alternative measure which would have been to reduce the first tax bracket by one percentage point. Rather than reducing the second one from 22% to 20.5%, we could have reduced the first from 15% to 14%. Of course, this is a hypothetical measure, since the government decided not to take that route.

I would nevertheless like to hear your opinion, Mr. Zorn. According to your knowledge of the group of experts and the methodology, how would such a tax reduction have affected inequalities overall?

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

I thank all of the witnesses for being here, those who are here in Ottawa, or participating by video conference or by telephone.

The main finding that emerges from most if not all of your comments is that Bill C-2 largely meets with the government's objective to reduce inequalities. This can be compared to the first act of a play, the second one being the 2016 budget tabled in the House by the Minister of Finance. With that in mind, I would like you all to comment.

You also pointed out in your respective presentations that the tax system needs to be reviewed.

I know, Mr. Mintz, that you've written about this as well, in your comments in The Globe and Mail on April 18, saying that it's time to look at the Income Tax Act. Other witnesses here today have mentioned that this is probably a necessary exercise, because there are a number of distortions in the act; that whether you look through an inequality lens, a tax-simplification lens, or a proper-incentives lens, tax reform is something that is more or less urgently needed in Canada.

I'd like you to briefly address both of those points, the inequality point and the tax reform point.

[Nicolas Zorn, Policy Analyst, Institut du Nouveau Monde]

Good morning. My name is Nicolas Zorn. I am a policy analyst at the Institut du Nouveau Monde. I thank you for your welcome.

For a few years now, our institute has studied economic and social inequalities in Quebec and Canada.

We know that income inequality has increased significantly since the 1980s: the average income has not really increased, while the richest 1% have seen their income increase considerably, much more so than the rest of the population. Thanks to the work of hundreds of researchers in international organizations such as the IMF or the OECD, we now know that significant inequalities, in addition to impeding economic growth, undermine the well-being of the population, social mobility, life expectancy, and the health of our democracy.

It is in that context that the three tax measures in Bill C-2 are going to affect income distribution and inequalities generally. The purpose of my presentation and the brief I submitted to the committee is to assess the impact of those measures on income distribution, in two ways.

First, the Institut du Nouveau Monde produced two budget bulletins, last year and this year, a non-partisan exercise for the purpose of assessing how the measures in the federal and Quebec budgets will affect inequality.

This year, we asked 33 economists and recognized public policy experts, from the left, the right and the centre, to assess the main measures in the last federal budget. Basically, we summarized the experts' replies, we examined the level of consensus among them, and we present their comments, which confirm or nuance the results.

In the opinion of the participants, the three fiscal changes in Bill C-2 could potentially reduce income inequalities. The results, the methodology and the names of the expert panellists are provided in the brief.

That being said, the overall effect of the rate cut in the second tax bracket—one of the three measures in Bill C-2—is that the overall impact on inequalities is weaker than in the case of the other two measures. However, the experts we consulted had more differences of opinion on this measure than on the other two. The first half of the specialists considered that this measure would reduce inequalities, but the other half felt that the measure would have no effect, or, worse, that it would increase income inequality in Canada.

When you look at the details of this measure presented as a tax cut for the middle class, you can see that it will be most beneficial for the richest members of the population, in particular those with taxable incomes in excess of $90,000. For instance, for an individual with a taxable income of $50,000, who would be considered by some as being in the middle class, this tax cut represents around $70 in savings. For someone who has taxable income of $100,000 or $200,000, the tax gain is 10 times higher. In other words, people with incomes of more than $90,000 will have tax savings of approximately $700 per person.

If the objective of parliamentarians and the Government of Canada is to reduce income inequalities and lower the amount of income tax paid by the middle class, there could be more targeted measures that would allow them to reach that objective.

If you have questions, I will be pleased to answer them.

I will now move on to my second and last point.

We estimated that adding a fifth tax bracket for those who earn $200,000 or more would have a significant effect on inequalities. This is also shown in the brief. Essentially, the richest 1% have seen their incomes go up because their incomes have increased four times faster than the rest of the population.

This measure will slow the growth of the income of the richest 1% just enough so that the income of the poorer 99% will increase at approximately the same rate. In other words, this measure will check the growth in inequalities we have seen over the past 30 years. However, inequalities will remain at a historically high level despite that. To bring the inequality back to a historically lower level, for instance the level that prevailed in 1985, the tax rate of the new bracket would have to increase from 33% to 39%. To get back to the ratio that existed 25 years ago, that would have to be the case for the next 25 years.

In conclusion, if the government and Parliament want to reduce the inequality between the richest 1% and the poorer 99%, and if they want to help the middle class more, the introduction of additional tax brackets for higher incomes and a review of the entire tax system would be more effective, according to several experts, than simply increasing the tax rate in that fifth tax bracket.

To the extent that there are many tax credits that increase opportunities for tax avoidance, abolishing deductions that mainly benefit the wealthiest people might be more appropriate.

Thank you for your attention. Do not hesitate if you have questions.

[The Chair, Liberal, Wayne Easter]

Thank you witnesses, for your indulgence.

Pursuant to the order of reference of Monday, May 21, 2016, we are studying Bill C-2, An Act to amend the Income Tax Act.

From the Institut du Nouveau Monde, we have Nicolas Zorn, policy analyst. From the Institute for Research on Public Policy, we have France St-Hilaire, vice-president, research.

Via video conference, we have Michael Veall, professor, department of economics, McMaster University.

On the telephone at the moment, we have Jack Mintz, who is with the school of public policy at the University of Calgary. Those are our witnesses for the first hour of our session.

The floor is yours, Mr. Zorn.

[The Chair, Liberal, Wayne Easter]

Thank you for that answer.

I would remind committee members that if any of the parties have amendments on Bill C-2, they have to be in to the clerk by 4 p.m. today.

With that, I want to thank the parliamentary budget officer and all of the witnesses for being here, and also for the good work you do on behalf of Canadians.

Thank you very much, everyone.

The meeting is adjourned.

[Jean-Denis Fréchette]

If I remember correctly, in our report the 83% referred to the first bracket. In our report, we said that if we started with the second bracket, as proposed by Bill C-2, 43% of taxpayers would be affected. Once again, those 43% do not just include taxpayers in the second bracket, but also those in the third bracket and others.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In short, Bill C-2 seeks to tax about 1% of the population more heavily in order to redistribute money to about 25% of the population in a significant way, let's say to 31%. Therefore 70% of the population will not necessarily see a change, despite the claim that the bill will benefit the whole of the middle class.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

I am particularly interested in Bill C-2.

I would like to thank you once again, Mr. Fréchette, for your thoughtful work to answer to my question. Indeed, you compared the provisions of Bill C-2 on the reduction to the second income tax bracket, which ultimately affects all income above $45,000, the one for income between $45,000 and $90,000, with the measure we proposed, specifically, a 1% cut for the first tax bracket, which would affect 83% of Canadians.

This is being touted as a tax cut for the middle class, but people with incomes under $45,000 do not see a penny in tax relief. Ultimately, I would like you to confirm, based on the figures from the studies you have done, that someone who earns $210,000 would receive more in tax cuts than someone else earning $62,000 per year.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

I want to talk about the TFSAs. Bill C-2 addresses that and reduces the limit from $11,000 to $5,000.

By income group, what percentage of Canadians are currently contributing the maximum amount to their TFSAs?

[The Chair, Liberal, Wayne Easter]

Thank you very much. You'll have to remain in suspense for three or four weeks, Mr. Liepert, for the outcome.

We will turn to bill C-2. On my list I have Mr. Lefebvre first, then Ms. Raitt, and then Mr. Caron. We'll try to hold it to four minutes each during this round if we could.

Mr. Lefebvre.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll go to Mr. Liepert, but I expect that when we're into the next round of questioning we may still need you, Mr. Matier and Mr. Cameron.

Let me ask Ms. Lao and Ms. Malanik to come to the table as well, so that they are here for Bill C-2.

Mr. Liepert.

[The Chair, Liberal, Wayne Easter]

Okay. I have to cut you off there.

I will take two more questions in this discussion period, from Mr. Grewal and Mr. Liepert. Then we are going to move to Bill C-2, and we'll limit the questions to three minutes, if we could, to keep it pointed on Bill C-2.

Mr. Grewal, go ahead.

[The Chair, Liberal, Wayne Easter]

Thank you.

If we could, committee, because I think you have different people to come to the fore for Bill C-2, could we keep this round of about 40 minutes or 35 minutes to the economic and fiscal update?

Mr. MacKinnon, for seven minutes.

[Jean-Denis Fréchette, Parliamentary Budget Officer, Library of Parliament]

Thank you, Mr. Chair. It's the first time you called me Mr. Fréchette so I'm really happy with that.

Mr. Chair, vice-chairs, and members of the committee, thank you again for the invitation to appear and discuss our April 2016 Economic and Fiscal Outlook, which was released today.

As you have already mentioned, today I am joined by a number of members of my team, who will be pleased to respond to your questions.

Since our November 2015 report, the outlook for the global economy has deteriorated further and commodity prices over the medium term have been revised lower. Despite this weaker external outlook, we anticipate that the combination of fiscal measures in budget 2016 and the accommodative monetary policy will help bolster the Canadian economy.

We project that growth in real GDP will rebound to 1.8% in 2016 and then rise to 2.5% in 2017. Growth in the economy is then expected to moderate over 2018 to 2020, reflecting the tapering of fiscal measures and the normalization of the monetary policy.

The level of nominal GDP, which is the broadest single measure of the tax base, is projected to be almost $20 billion lower each year on average between 2016 and 2020 compared to our November report. However, relative to the government's planning assumptions for nominal GDP in budget 2016, our projection is on average $40 billion higher per year over 2016 to 2020. The difference is most pronounced in 2016 and 2017, reaching close to $50 billion in those years.

Our November 2015 fiscal outlook provided an independent status quo planning assumption for the start of this 42nd Parliament. We have updated our fiscal outlook to include measures announced in budget 2016 as well as measures announced prior to the budget.

We estimate that there was a small surplus in 2015-16 and we are forecasting a budgetary deficit of $20.5 billion in 2016-17, which is primarily attributable to the introduction of new measures since the government's fall update.

The deficit is then projected to rise to $24.2 billion in 2017-18 as the result of moving to the seven-year break even mechanism for EI premium rates, as well as increases in direct program expenses.

Over the remainder of the planning horizon, we project the deficit to decline to $12.4 billion based on the government's forecast that direct program expenses, in particular the operating costs of departments, will remain flat over the period from 2017-18 to 2019-20.

Compared to budget 2016, our outlook for budgetary deficits over 2016-17 to 2020-21 is $4.5 billion lower on average. The average difference is roughly in line with the $6-billion fiscal impact of the government's adjustment to the private sector forecast of nominal GDP.

Budget 2016 highlights the government's commitment to returning to balanced budgets and to reducing the federal debt-to-GDP ratio to a lower level by 2020-21. To provide a broader perspective on the sustainability of the government's finances, we have extended our projections beyond 2020-21 to show the long-term trajectory of federal debt relative to GDP. Our projections show the federal debt-to-GDP ratio declining continuously over the next several decades under current policy. This indicates that the federal fiscal structure underlying budget 2016 is sustainable over the long term.

We would be pleased to answer your questions concerning our economic and fiscal outlook, or any relevant matter such as Bill C-2 or, again, our current or future mandate.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Order. During this session, we'll basically be doing two studies or two orders of reference with the parliamentary budget officer. We'll break it into two sessions. First, we'll deal with Standing Order 108(2), the study on economic and fiscal outlook. In the second half of the session with the parliamentary budget officer, we will shift to Bill C-2, an act to amend the Income Tax Act, and comments from the parliamentary budget officer and staff in that area.

I understand, Mr. Fréchette, you have one opening statement that will cover the two. To introduce who is at the table: parliamentary budget officer, Jean-Denis Fréchette; Mr. Askari, assistant parliamentary budget officer; Mr. Matier, senior director, economic and fiscal analysis and forecasting; Mr. Cameron, economic adviser and analyst, economic and fiscal analysis; and Mr. Jacques, director, economic and fiscal analysis.

Mr. Fréchette, the floor is yours. It's been a long time since we used to work at the agriculture committee together.

Instruction to Committee on Bill C-2

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I am just wondering why the member for Rimouski-Neigette—Témiscouata—Les Basques wants to debate a motion regarding a bill that he has already agreed to send to committee. He voted in favour of Bill C-2 at second reading on March 21. Why does he now want to change a bill he recently voted for? The member already had the right to vote for or against the clauses in the bill. There is a whole section of committee appropriately referred to as clause-by-clause consideration for this very task. The bill has already been referred to committee. I do not see why he is now writing new conditions for his support.

Why will the member not let the committee do its work and hold its own debate rather than pushing for unnecessary delays?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

moved:

That it be an instruction to the Standing Committee on Finance that, during its consideration of Bill C-2, An Act to amend the Income Tax Act, the Committee be granted the power to divide the Bill in order that all the provisions related to the contribution limit increase of the Tax-Free Savings Account be in a separate piece of legislation.

Mr. Speaker, as everyone knows, we are currently examining Bill C-2 at the Standing Committee on Finance. It was the first bill introduced by this government and it amends the Income Tax Act. When you look at the contents of the bill a little closer, it is clear that it contains two separate measures. The first measure has to do with changing the tax rates. The change this government is proposing targets the second tax bracket, whose tax rate would drop from 22.5% to 20%. The second measure has to do with the contribution limit for tax-free savings accounts, which the Conservatives had increased to $10,000 a year. This bill drops that limit back to $5,500.

I would like the House to instruct the Standing Committee on Finance to separate the bill so that the two issues can be addressed separately, because they are two fundamentally different issues.

Let us look at the TFSA, the tax-free savings account. Many people think or are under the impression, due to the way it was presented to the Canadian population, that it is basically a savings account for retirement, that people put money aside in that account after paying taxes on it, and that it can actually grow with interest and returns, and they will eventually be able to take that money out tax free because they already paid tax on it.

If we look deeper into the TFSA, we see it is a bit more complicated than that. It is more complicated because it is not only money that can be put in this account. People can put all kinds of things in this account. They can put stocks, bonds, derivatives, and all kinds of financial tools.

The concern with raising the ceiling to $10,000 was the fact that it became something other than a retirement savings mechanism. It became, basically, a way to shelter returns on financial investments. If I invest in the stock market and make a significant return on my investment, I will not pay the same income taxes as most of the population. With this money, I will be taxed only for half of what I would be earning, and I will only pay taxes on a portion of that half, while people earning incomes through work will actually be taxed on the entirety of their gains. We are in a situation right now where capital gains have a different tax status from income tax gains, basically.

When the ceiling was raised, there was a possibility that it could be no longer used as a savings mechanism but as a slush fund, in which people would deposit money, play the market with it through a variety of financial tools, and eventually escape the capital gains tax altogether. This possibility, I would submit, is not available to the large majority of Canadians. Those who have the means to play the stock market or the derivative market is actually a very limited number of people.

Many analysts who are studying the TFSA and the impact of the increased limit have been concerned about this. The Parliamentary Budget Officer, among others, estimated that the limit increase would have some serious adverse effects. In his update of the analysis of the TFSA limit increase, he estimated that by 2080, the long-term fiscal impact of the TFSA would reach 0.65% of the GDP. That is almost 0.7%. We are constantly being told in the House that it is impossible for Canada to meet its international aid commitments of 0.7%, because there is not enough money. However, this TFSA limit increase would have nearly hit this objective, but just a small part of the population would have benefited. The Parliamentary Budget Officer noted this as well. He looked at the distribution of TFSA benefits by wealth.

If we divide the population into groups, each representing a 20% wealth bracket, we see that the 20% representing the wealthiest households would receive a greater tax benefit than the remaining 80% of families who are not high-wealth households.

Therefore, we see that the Conservatives' proposal was extremely detrimental to the country's fiscal situation. In fact, it opened the door to the use of this mechanism not only as a retirement savings tool, but more so as a tax shelter for capital gains. The capital gains tax is already much lower than taxes on people's income, for example on working income. The concern that is being raised by many is that instead of being a savings mechanism, it almost becomes a rather significant tool for tax avoidance, and it will not be used for the purpose it was intended when it was introduced and passed in the House.

That is one measure that the government finally wants to reverse. Instead of keeping the 2015-16 ceiling of $10,000, the government wants to bring it back down to $5,500. That is one measure we agree with. We floated the idea during the election campaign. We believed that the amount of $5,500 was sufficient for reaching retirement savings goals.

In fact, depositing $5,500 for ten years, for example, will yield $55,000 plus interest, which is tax free. That is in addition to the other existing tools, such as RRSPs and the benefits people will have access to at 65, such as old age security and savings under the Canada pension plan or the Quebec pension plan.

The TFSA is an additional mechanism that can be used, a tool among many others. We believe that the $5,500 ceiling is adequate.

Now, there is a second measure in Bill C-2 which is extremely different from the ceilings of the TFSA. That is the modification of the tax brackets. The bill proposed to change a second bracket.

For those who might be listening at home, right now we have four tax brackets in Canada. The first one applies to income of $11,000 to about $45,000, which is at 15% right now. Then any income between $45,000 and about $90,000 is taxed currently at 22%. Then income of $90,000 to about $135,000 is taxed at 26%. Over that amount, income is taxed at 29%.

The bill makes two changes. It decreases the second bracket, so for all revenue, all income from $45,000 to $90,000 the rate is decreased from 22% to 20.5%, and it adds another bracket for those earning over $200,000 that will be taxed at 33%.

During that debate and during the campaign, I was actually a bit surprised at the low level of understanding of how our tax system works. That reduction on the amounts between $45,000 and $90,000 will not only affect those earning a total of between $45,000 and $90,000, but it will actually be applied on all income over $45,000.

Right now, somebody earning $150,000, an ordinary member of Parliament, for example, who earns about $135,000, will actually have a 1.5% reduction of his or her taxes on all the income between $45,000 and $90,000. Before $45,000, that income will be taxed 1.5% less.

Many people are under the impression that people earning over $90,000 will not be affected. On the contrary, they get the full tax reduction at that level.

We are going through the analysis. Much analysis has been done, including by the parliamentary budget officer. What we are seeing is that while the Liberals, during the campaign promised to have a middle-class tax cut, it is clear that those earning less than $45,000 will not see a single cent of that tax reduction. It is clear. It only affects people earning over $45,000.

I have been told in no uncertain terms that those who earn $35,000 to $45,000 might legitimately claim to be members of the middle class, which is a very difficult term to define. One way to define it is to look at all the income divisions in Canada, to exclude the 20% who earn the most, the 20% who earn the least, and that would give us a middle class that is anywhere between $20,000 to $60,000. That would be, roughly, what the middle class is in terms of income per year. There is a large chunk of that group who would not get a cent of that tax reduction. Therefore, to call this a middle-class tax cut is, in my mind, misleading.

There is a second part of it, which was supposed to pay for the lost revenues. That is the new tax bracket of 33% for income over $200,000. We know, and the government was forced to admit it, that it will not pay for the tax reductions. We all agree on that. Not only will it not pay for those tax reductions, but even people making an income over $200,000 would still have an overall tax reduction, even though this was supposed to impose more on them, because they still get the full tax reduction of that second bracket. That means someone earning $210,000 would still have an overall tax reduction. Someone earning $215,000 would still have an overall tax reduction. Is that what we mean by a middle-class tax cut?

For those of us on this side of the House, there is a problem. We agree with one large measure that would, if it is not addressed right now, have significant fiscal impact on the Canadian government. On the other side, we disagree with the measure that we find is misleading and which is not achieving the aims that were presented to the Canadian population especially during the election.

In addition, we still wanted to be constructive, since Canadians elected this government in part because of its promise to lower taxes for the middle class. We respected the verdict and we made a proposal to the government. Rather than excluding a large portion of the middle class, rather than simply reducing the second tax bracket, let us reduce the first tax bracket, the first level of income at which people have to start paying taxes. This tax bracket starts at approximately $11,000 because people are given a basic exemption that is not taxed. We proposed to reduce that tax bracket from 15% to 14%, a 1% reduction. What would that do? It would allow people who really belong to the middle class to benefit from this tax reduction. It would allow people who are currently getting a 1.5% reduction on income over $45,000 to have a 1% reduction on a similar income. It would make it possible to ensure that people who are earning $210,000 a year are not being given a tax cut. This is a series of measures that I believe all Canadians would agree with.

For reasons that cannot be explained, the government is opposed to this measure. So be it. However, I do not think that the government can disagree with the fact that the two measures in question are totally separate issues. I think that each one should be examined on its own merit. The Standing Committee on Finance has done some of the work. I also believe that it is in the government's best interest to move in that direction. We are offering the government an advantage on a silver platter. The media had a field day when these measures were presented to the Canadian public. We are offering the government the opportunity to hold two separate debates and two separate votes on the measures that it is presenting, measures it is proud of. It would be really worthwhile for the House to be able to vote on whether the bill should be divided. I know that I presented some extremely technical information, but it is hard not to get technical when we are talking about income tax. Finally, the two measures have completely opposite effects.

It goes to the notion of transparency and the notion of accountability as well that the House could actually pronounce itself separately on those measures.

We will have that chance in the finance committee. Bill C-2 is only 10 clauses long and we will do a clause-by-clause study. We will vote clause by clause in the finance committee, so we will have the opportunity to demonstrate in committee which clauses we are in favour of and which we are not.

Since Bill C-2 is the first bill presented by the Liberal government and it is one of the key measures that it wanted to bring forth to the Canadian population, it is important that the House have the opportunity to do the same and to vote separately on those arguments. It would be beneficial for the trust that the population puts in the Liberal government. It goes to the issue of credibility as well. It would go toward contributing to the answer to the question that many have asked so far.

Since we voted on the ways and means motion on which we could not divide per se, people were under the impression that starting on January 1, they would have a tax reduction if they considered themselves part of the middle class. Starting on January 1, when they saw their pay slips, they might have been surprised not to see any changes. They still do not understand.

I have not really heard the government so far in this debate talk about the technical aspects of it publicly. I hear the answers given either by the minister or parliamentary secretary saying that the government has given the middle class a tax cut, period.

This calls for some clarification. Here in the House, there are 338 MPs who represent all Canadians. The government would do well to clarify this. We are giving the government the opportunity to do that so we can debate these two points on their merits.

That is why we moved this motion to divide the bill into its two main parts. These main parts encompass all of the other elements, such as changes to the law and the tax credit formula for charitable donations. That formula generally uses the highest individual percentage, which will be changed, so it will have to be changed too.

This is not a very complicated issue. Can we divide the bill in two so as to deal with changes to the tax-free savings account and the tax brackets separately? That is what we are suggesting to the government.

I hope the members of the House will support this so we can clarify the work the Standing Committee on Finance is now doing and ensure that we are accountable and transparent to Canadians.

[Kevin Milligan, Professor, University of British Columbia, As an Individual]

Thank you very much.

I'll be brief. I have a couple of comments on Bill C-2. I have a couple of points to make about the new 33% top tax bracket and its impact on government revenues and tax planning and tax avoidance.

The first comment is just to emphasize the importance of considering the differences between federal taxation and provincial taxation. In a federation such as Canada it is more difficult to tax mobile economic factors at the provincial level. For example, if a province tries to tax high earners, some of that income may shift to other provinces through the use of financial and accounting techniques. As an example, there's something called an Alberta family trust into which a high earner could put some assets that essentially shifts taxation of the income from those assets to Alberta, where it faces lower rates.

On the other hand, at the federal level it is harder to avoid taxation, because if you're going to try to engage in these kinds of techniques, it is harder to shift money out of Canada than between provinces. In research with Michael Smart from the University of Toronto, we found that high-income taxpayers are much less likely to shift their income and engage in these tax-planning techniques in response to a federal change than they are to a provincial change. When looking at these revenue implications of a high-income tax bracket, then, we should definitely pay attention to evidence on federal changes versus provincial changes.

My second point is about the administrative measures that have been put in place over the past few months. These enhanced administrative measures are critical to combatting tax planning and tax avoidance. If the Canada Revenue Agency makes it harder for individuals to engage in tax planning, then the new 33% tax bracket is more likely to reach its revenue targets.

The government has already announced several measures that move in that direction. As an example, in the recent budget there's a change in the definition of active versus passive income for small business corporations, and there's also an announcement of several hundred million new dollars for enforcement programs at the Canada Revenue Agency.

But I believe there's still more to do on three fronts. First, we should reduce the use and availability of small business corporations as tax shelters. We can do that through examining spousal dividends, by looking at the lifetime capital gains exemption for small business corporations, and considering use of an employee count or an hours threshold, as Quebec has done, for access to the small business deduction.

The second thing we can do is reopen the case for the taxation of stock options. That was taken off the table by the finance minister recently, but I think there are some merits there that deserve some more attention.

Finally, on the issue again of tax planning and tax avoidance, it's really important to consider the international angle. Much of that happens through organizations such as the OECD. They pursue multilateral agreements to curb tax planning and tax avoidance at both the corporate and personal level, and at those international organizations, Canada can and should be taking a leadership role in pushing those processes forward.

That's it for my comments. I look forward to members' questions.

[Charles Lammam, Director, Fiscal Studies, Fraser Institute]

Thank you, Chairman Easter, and the rest of the committee for giving me an opportunity to share the work of the Fraser Institute with you today. I hope you find my comments helpful and informative as you deliberate these important public policy issues.

I'm the director of fiscal studies at the Fraser Institute. We're an independent, non-partisan economic policy think tank. The mission of the institute is to help average Canadians understand the impact of government policies on their lives and the lives of future generations.

I've been studying tax policy for about a decade now and have published several peer-reviewed studies on a range of economic policy issues, including taxation and government finances. Last month I co-authored a study titled “Canada's Rising Personal Tax Rates and Falling Tax Competitiveness”. Many of my remarks will draw from the findings of that research.

I should note that my comments today reflect my own opinions and observations about the research we have conducted. I do not speak for anyone else at the Fraser Institute.

Let me start by saying that a competitive tax system is critical to fostering a positive economic climate. Empirical evidence from across the world shows that taxes can influence whether people engage in economically productive activities, such as working hard, expanding their skills, investing, and being entrepreneurial. These are all activities that ultimately drive economic growth and prosperity.

Over the past 15 years federal and provincial governments in Canada of various political stripes have improved the competitiveness of our business tax regime, but little has been done on personal income taxes. Personal income taxes are particularly important when it comes to building a knowledge-based economy and attracting and retaining highly skilled workers such as entrepreneurs, doctors, lawyers, business professionals, and engineers.

The new top federal marginal tax rate proposed by Bill C-2, as well as recent tax rate increases in many Canadian provinces, harm our ability to attract skilled workers, and in fact discourage Canadians from realizing their full potential.

Critically the new top federal marginal tax rate of 33% is being layered on top of several tax increases by the provinces on highly skilled workers. For instance, as a result of federal and provincial tax hikes, the combined top federal-provincial statutory marginal rate in Ontario has increased from 46.4% to 53.5% since 2009. That's more than a 7% increase.

According to the latest available international data, Ontario's top combined marginal rate is the sixth highest among 34 OECD countries, and the second highest among G-7 countries, behind only France. More broadly, due to recent tax hikes, the combined top rate is now about 50% in six out of 10 provinces.

Consider that for a moment. In many Canadian provinces, including Canada's two largest, highly skilled workers can lose more than half of each additional income earned in labour income to personal income taxes. The economic evidence shows that high and increasing marginal tax rates discourage productive economic activity, making Canada a less desirable place to work, invest, and be entrepreneurial. They can also influence decisions about where highly skilled workers decide to live and work. There are many reasons why someone might decide to move to another jurisdiction, but empirical research shows that marginal tax rates play an important role in that decision, particularly for high-skilled labour.

The fact that Canada's tax rates often apply to lower levels of income than other countries further erodes our tax competitiveness. At an annual income level of $150,000 to $300,000 Canadian, every province's combined statutory marginal rate is higher than the combined rate in every U.S. state. This presents a clear challenge for Canada's ability to attract and retain skilled workers relative to our southern neighbours.

It's not just Canada's top personal tax rate that is uncompetitive. In most provinces a Canadian making $50,000 in Canadian dollars faces a higher statutory rate than they would in most U.S. states. This is despite the reduction in Canada's federal rate from 22% to 20.5%. In other words, Bill C-2 does little to address Canada's uncompetitive tax rates, even for the middle tax brackets.

The importance of a competitive tax system is not just fostering a skilled workforce. By discouraging productive economic activity, high and increasing tax rates ultimately diminish economic growth and prosperity. Indeed, because high and increasing tax rates adversely affect economic incentives, governments often do not receive the kinds of revenues they expect from these tax increases.

In closing, it is worth noting that past federal governments, both Liberal and Conservative, have acknowledged the importance of a competitive personal income tax system. For example, the economic plan of Paul Martin's Liberal government in 2005 called for lower personal taxes to “provide greater rewards and incentives for middle- and high-income Canadians to work, save and invest” and to “encourage more Canadians to invest in their skills and to remain in Canada, where their talents will help build a stronger, more prosperous economy”.

In 2006 Stephen Harper's Conservative government made a similar point in its economic plan. Unfortunately, since then marginal tax rates on highly skilled workers have generally become less, not more, competitive.

Thank you.

[Angella MacEwen, Senior Economist, Social and Economic Policy, Canadian Labour Congress]

Thank you very much.

I'm here on behalf of the 3.3 million members of the Canadian Labour Congress, and I want to thank you for the opportunity to present our views on the changes to the Income Tax Act that are proposed in Bill C-2. The CLC brings together Canada's national and international unions, along with provincial and territorial federations of labour and 130 district labour councils whose members work in virtually all sectors of the Canadian economy, in all occupations, and in all parts of Canada.

Personally, I think it's important to analyze these changes in terms of whether or not they will increase fairness and reduce inequality. In the case of BillC-2, I find that the result is mixed. The first part of the bill deals with the proposed middle-class tax cut. This proposal reduces personal income tax rates on income between $45,000 and $90,000 a year and then increases tax rates on income over $200,000. As Andrew Jackson, my former boss, and the senior policy adviser at the Broadbent Institute points out, this definition of the middle class leaves out most workers. Why is this?

Most workers don't make enough money to benefit. Data from the Canada Revenue Agency shows us that only one in three individual tax filers had taxable income over $45,000 in 2013. Because of how our tax system is structured, the maximum benefit of $670 per year is only available to people who earn between $90,000 and $200,000 a year. That maximum benefit goes to the wealthy group who arguably don't need it. On top of this, we know that tax cuts are the least effective form of government spending in terms of reducing inequality or stimulating the economy. I think we heard from the last panel that tax cuts, in terms of addressing inequality, are not a really effective way of doing that.

While we are supportive of the increase to the top personal income tax rates, we think this revenue would have been better spent, for example, strengthening public services, such as health care. Public services benefit everyone and reduce inequality. Pharmacare and home care are good examples of health care spending that can increase efficiencies in health care delivery and make lives easier for Canadians.

On the second part of Bill C-2, regarding the tax-free savings account, we think it's great that the government has reversed the previous government's changes. Returning the annual contribution limit to $5,500 recognizes that very few Canadians had the resources to take advantage of the higher limit. In fact, only about 8% of eligible Canadians had reached the maximum contribution limit during the first four years of the program. Again, as the other panel noted, it's the lifetime contribution that's going to matter in the long run, but for now this is a good move.

On retirement security, the Canadian Labour Congress feels that a much more important action to provide Canadians with real retirement security would be to double the CPP as soon as possible. In terms of what workers get from the Canada pension plan, it costs less than other ways of saving, such as mutual funds, RRSPs, or even the tax-free savings account. In a country as rich as Canada, no one should retire into poverty.

Thank you for your time.

[The Chair, Liberal, Wayne Easter]

Again, I want to thank the new witnesses for coming to the table on the reference of Bill C-2, an act to amend the Income Tax Act.

From the Canadian Labour Congress, we have Angella MacEwen. From the Conference Board of Canada, we have Matthew Stewart. Via video conference from warm B.C., from the Fraser Institute, we have Charles Lammam; and as an individual, we have Kevin Milligan, a professor with the University of British Columbia.

We'll be starting, Ms. MacEwen, with you. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Mr. Caron, we'll go to the question in one second. I think C-2 has to get through here and go to the Senate as well.

What I'm wondering is.... About your point on a report, we can't hear from witnesses and the minister and not do a report. I think the number of us who have been around Parliament for a while realize that the committee is going to have to sit for however long it takes to do a report.

We'll deal with this motion, but what I would suggest is that the steering committee meet on Monday, if that's possible, to schedule in what we can on witnesses on this point who are finishing up C-2 as well, and other issues that may be on the steering committee's agenda, so that we can schedule it out. I think the government has heard the push for the minister as soon as possible, and maybe by Monday, the minister could have perhaps a more clear position on what date she may be able to come.

You have a question, Mr. Sorbara.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I'm asking the question. I just explained that the study of Bill C-2 isn't urgent. We don't necessarily want to postpone the study to the fall. We want to be able to take care of this file, but there's no urgency because the ways and means motion has already been carried. Tax cuts and lowering the limit have already been in place since we voted on it in December.

What is more urgent for the government: a sped up discussion of a bill that is already in effect or an expeditious discussion of tax havens and an amnesty for people who, in the end, have eluded the system? The government seems to have decided that a bill that is already in effect is more important than discussing tax havens. That is one question that must be raised.

The second question that hasn't yet been answered has to do with an additional meeting to draft a report. Receiving the minister and officials from the Canada Revenue Agency to talk to us about the situation is one thing. Whether the committee looks into what they will say is another, just like the way we report to Parliament. This aspect is still absent from the current motion.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair, I would like to clarify for my colleague Mr. Caron that it isn't a lack of organization. Rather, it was the desire of committee members to conclude the study of Bill C-2 and, given the dates we're looking at now, to have the minister appear before the committee as soon as possible. So it isn't a lack of organization. It's to ensure the important work related to Bill C-2 is finished.

Once the study of Bill C-2 is finished, the first possible date on the calender for the minister and committee members is April 20. Everyone is aware of the MP's motion, we know about it. But we want to make sure that we finish the study of Bill C-2. As soon as we're done with that, the minister will appear with official representatives from her department. The first possible date is April 20. There is no other agenda but transparency and having the minister come as soon as possible, taking into consideration the work that this committee must do, which is to conclude the study of Bill C-2.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I'd like to remind the chair that I have somewhat introduced my motion, in parallel to this motion, for the minister to come on main estimates as well. Whatever the minister is contemplating for this amount of time spent on Bill C-2, I'm asking through my motion that she come on main estimates as well. Usually, that would be an hour each.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Pretending that we absolutely must study Bill C-2 immediately doesn't make sense because Parliament has already voted on the ways and means motion. The measures in Bill C-2 are already in effect. Our current efforts to ensure that the minister can appear within a reasonable timeframe is not an attempt to postpone or delay the study of Bill C-2. We support having the minister appear before us on April 21, and then we will continue to study Bill C-2 and prepare the report that we had proposed.

Once again, why, despite the fact that we have known about the situation for at least 48 hours, was the minister not informed in advance and why are we still waiting for an answer to find out when she might come? It's not as if the motion had been a surprise; it wasn't. She knew about it because she mentioned it yesterday in the House.

One last thing. She made some comments on March 10, and she should explain them. According the motion, she could appear as late as May 20. If the questions are about responsibility and transparency because of her comments about the fact that there was an amnesty or not in the KPMG matter, they should be answered sooner rather than later. We should be concerned about this and be trying to get answers about what motivated that statement.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

We all want to know the answers in terms of what has happened and the stories that have come out. Mr. Caron, I think our objectives are the same. We want to ensure that Canadians have confidence in our tax system, that everyone is paying their fair share, and that there are no sweetheart deals or anything like that going on.

I think it behooves us to continue studying Bill C-2. The minister has responded that she is available to come to the committee prior to May 20. Thank you.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Yes. Thank you, Mr. Chair.

I think it behooves the committee to continue our work on Bill C-2. With regard to the motion, it was discussed amongst ourselves that we would like the minister to appear. Now we've contacted the minister and we've received feedback that the honourable minister will be available before May 20.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

Since I don't have much time, I will get right to the point.

Mr. Macdonald, I love the options you presented. They are alternatives to what is in Bill C-2, which proposes reducing taxes for the second tax bracket and increasing taxes for the first tax bracket. As you said, taxes are being increased for 0.8% or 1% of the population and being distributed among 25% or 30% of the population by neglecting the remaining 70%.

Do you agree?

Mr. Alexander, do you dispute the assertion that the changes in tax rates that are being presented in Bill C-2 basically affect only about 30% of the population among the highest incomes, and are doing nothing, basically, for 70%?

[The Chair, Liberal, Wayne Easter]

I was going to suggest that we are on Bill C-2, but it does relate. You mentioned the budget.

Go ahead, Mr. Ball.

[Bruce Ball, National Tax Partner, BDO Canada LLP, and Member, Tax Policy Committee, Chartered Professional Accountants of Canada]

All right, thank you. On behalf of the Chartered Professional Accountants of Canada, I wanted to thank you for the opportunity.

As a bit of background, I'm a member of CPA Canada's tax policy committee, I'm a national tax partner of BDO Canada, and I'm also a chartered professional accountant.

I did want to point out that the CPA designation is now, with the amalgamation, the single accounting and business designation in Canada. This was accomplished by the merger of the three legacy designations: CA, CMA, and CGA. We have over 200,000 members now.

One thing I wanted to make clear is that we do recognize that the government was elected in terms of a fairly specific platform, and the main tax changes I'm going to focus on were part of that. We do respect that and we do recognize that they received a majority.

Bill C-2 has three main important tax changes: the reduction of the middle-class tax bracket that's been discussed, the new top bracket, and the decrease in TFSA contribution room. From a more general point of view, what we really wanted to point out and talk about was the fact that when you do change the tax system it can have various effects, positive, negative, and maybe some unintended effects as well.

We wanted to talk at a more general level, I think, and reinforce that the tax system is a key lever in terms of ensuring that we have a business environment that remains competitive, that we attract and retain the best and brightest minds, and that we also achieve economic growth and prosperity. Our main message today is that it is difficult to talk about three pretty specific tax changes in isolation without considering the tax system as a whole.

Going forward, our key message today really is that before any other tax measures are introduced or changed, we'd like to see a review from top to bottom of the tax system. The review should focus on a number of important factors, with reducing complexity, improving efficiency, effectiveness, and competitiveness being some of the key factors.

We think such a review would actually benefit taxpayers, businesses, and the government as well, the goal being to make Canada the most attractive place possible in terms of a place to live, invest, and do business in. We think that this is squarely in line with the government's agenda for growth. We also think there's no better time than now to do it, for a few reasons, the main one being that there hasn't been a real review of the entire system for over 50 years. The last one was the Royal Commission on Taxation in 1966. Clearly things have changed a lot since then.

The other thing, and I think this has been recognized, is that the tax system now is actually very complicated. It's complex. It's difficult to understand. It's very labour-intensive to deal with, and there are inefficiencies and costs associated with that. In our summary we point out that the compliance cost, according to the Fraser Institute, is probably somewhere around $25 billion for taxpayers and businesses, and perhaps almost $7 billion for the government.

The third reason, really, is that we think there's a lot of support right now for a significant review of the tax system as well. We note in particular for four years now this committee has called upon the government to explore ways to simplify the Income Tax Act and the tax system. Just this past February, it was recommended that the government initiate a comprehensive review of Canada's tax laws with the objective of making the country's taxation system simpler, fairer, and more efficient.

We just can't support that enough.

We were also encouraged that there was reference in the 2016 budget to the government's intention to review the tax system, and we wanted to recognize the chair's recent comments as well that there's a need to look at taxation as a whole, including everything from consumption taxes to income taxes, and corporate taxes to boutique tax credits or tax breaks. Again, that's exactly where we sit and I think a lot of other experts do as well.

Getting into how such a review would work, we believe there should be a panel and it should be guided by the following principles: to keep tax rates as low as possible, the tax bases as broad as possible, and eliminate inefficiency or ineffective tax preferences. We also echo the comment made earlier that the rate is exceeding 50% in a lot of jurisdictions and that is getting fairly high to levels that haven't been seen for some time.

The next key thing when reviewing the tax system is to take a look at the tax mix, especially between income taxes and consumption taxes. We believe that Canada is out of step with the other OECD countries in terms of that.

We don't have specific comments on the TFSA, but we do have the comment that the tax system should not tax personal savings. There should be some sort of enhanced incentives to make sure that Canadians are saving properly for their retirement.

Another key objective, we believe, is to try to keep corporate rates as low as possible to maintain Canada's competitive edge, attract new investment, and create jobs. We also believe that a review should focus on a pro-growth approach that encourages innovation, productivity, and prosperity.

Finally, with regard to working with the provinces and territories, a lot has been done, but we still think more could be done in terms of a more coordinated approach that will benefit everyone.

Just to sum up, Canada needs a tax system that is built for the 21st century, not what, we think, is a patchwork of original rules, amendments, and fixes that have accumulated over time and can cause uncertainty and unintended results. With a four-year mandate, we believe that now is the best time to deal with this, to work on a tax review and possibly tax reform. We would call on the government to have the vision, commitment, and focus to move forward to it.

I would be happy to address any questions on these issues.

[The Chair, Liberal, Wayne Easter]

Okay.

Thank you, witnesses, for being patient, and we will tighten up the time a little. We will have 50 minutes for discussion.

We have Mr. Alexander with us from the C.D. Howe Institute. From the Canadian Centre for Policy Alternatives, we have Mr. Macdonald. By video conference from Toronto, we have Ms. Morris from the Canadian Association of Retired Persons, and also by video conference from Toronto, from the Chartered Professional Accountants of Canada, we have Mr. Ball.

Thank you for appearing, and we are now discussing the related order of reference of Bill C-2, an act to amend the Income Tax Act.

We will start with you, Mr. Alexander. My apologies for the delay.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

I don't think we can have a debate and ask for a vote at the same time.

I would like to point out that we are supposed to hold a meeting to discuss the committee's work schedule. We have not done so yet. We were informed about what this would look like, but there has been no discussion on it. I think the members of the committee want to debate the issue. We will probably do so before the end of the meeting or at a subsequent meeting. I really want to discuss the length of time allocated to testimony and debate on Bill C-2. I agree with Mr. McColeman that we should discuss the first motions that were submitted and come back to this issue subsequently.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Mr. Chair, I know this process has gone a little differently than normal when you're in the chair, having been in the chair before. I know we were notified that you had made the decision to proceed with this particular set of hearings, but it was also narrowly defined in terms of the number of days. I think, knowing that the committee is the master of its own destiny, that not one individual—not even the chair, if I can say that respectfully to you....

One of our desires in looking at Bill C-2 is to have other witnesses attend, which the time allocated would not allow for, because it was arbitrary. That said, I'd like the committee to consider extending the time frame for the study of this and allow for other witnesses.

Who am I thinking about who should be consulted at this committee? There are many different people in Canadian society who should be brought before this committee and have their views vetted on this particular bill.

I'm asking that before we approve any of the costs associated with this, we step back for a moment and say that the committee was not able to consider the time frames for a study of this and that we should be afforded the opportunity to consider the time frames and not truncate them for any reason to withhold testimony from other Canadians who may want to weigh in on this. There are probably groups, including first nations individuals, who might like to come before this committee to speak to this bill.

[The Chair, Liberal, Wayne Easter]

Thank you, members.

We had four, and we have three motions left. Normally the way we deal with them is in the order they came in unless, as happened in the previous meeting, we get one moved from the floor and get it dealt with.

First, before we go to motions, there's the request for the budget for the hearings on Bill C-2, of which I think everyone has copies. All the witnesses who were proposed and who wanted to come were accepted, I think. The various parties put their witness lists in. The total amount requested for the hearings on Bill C-2 would be $16,300. That includes costs of four persons from Vancouver, two from Toronto, one from Montreal, one from Calgary, and the ones here from Ottawa. This is laid out before you.

Does somebody want to move adoption of that budget, or is there any discussion?

Go ahead.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you for your testimony this morning.

I have a hypothetical situation for you, and hopefully you'll be able to answer it.

Assuming you're a family that's going to benefit the maximum from the middle-income tax cut, and in that corresponding tax bracket, let's say you made $60,000. You have two children under the age of six, and you're also going to benefit from the Canada child benefit. How much more money are you going to get because of Bill C-2?

[Phil McColeman, Conservative, Brantford—Brant, ON]

—330 divided by 365 is 90¢ a day.

Currently, there's a whole suite of tax changes that are occurring in the budget documents. I'm not here to ask you specifics on those because I know we're talking about C2, but it does relate to C2. As my colleague said over here, he brought up the child tax credit, which he used.

Is your department right now considering how families will end up or individuals or couples, the whole mix of the demographic, and how this will affect all of the changes made, meaning the taxes that are taken away that the budget has proposed and the new credits that are given, along with the changes in C2? Have you looked through the math in terms of whether this will mean more income or less income for certain categories of Canadians?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I agree entirely. However, someone who lives in Toronto or in a rural area will receive the same income tax reduction, depending on their salary. When we talk about the Canadian distribution, we are talking about an aggregate. I think that we can talk about taxpayers as a whole.

According to Statistics Canada figures, the average for the third income decile is $17,800 and that of the eighth decile is $52,600. If you include the 20% with the highest incomes and the poorest 20%, you could define the middle class as people who earn between $17,800 and $52,600. However, the income tax reduction in Bill C-2 really begins to apply around $45,000.

Once again, you can confirm what I am saying. We really reach the maximum income tax reduction as of the third bracket, that is to say the one that applies to people who earn between $89,000 and $90,000. Those people and those who earn up to $200,000 will benefit from the maximum income tax reduction.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Mr. Jovanovic, I would like to begin by confirming certain figures with you.

Let's talk about the cut to the second tax bracket.

A person whose income is under $45,000 will not benefit in any way from the tax cut. Let's take the Statistics Canada figures for non-economic family members, who are generally single people. There will be absolutely nothing for the first seven deciles, that is to say the 70% of the population with the lowest incomes. The average income of the eighth decile was $52,600 in 2013. So, a few people in this 70% to 80% will benefit from a tax reduction, but all of those below that will get nothing. Are we in agreement up till now? You seem to acquiesce.

The government says that nine million taxpayers will benefit from a tax reduction. According to my calculations, 18 million taxpayers are under that threshold and will not see a tax reduction under this bill. Once again, correct me if I am wrong.

You have probably seen the report of the Parliamentary Budget Officer I requested. This is what he concluded. If we were to reduce the first tax bracket, this would affect 83% of taxpayers. However, the percentage of taxpayers affected by the decrease in Bill C-2 is far lower, since it is approximately 30%.

Have you evaluated the impact of a 1% cut to the first tax bracket rather than a 1.5% reduction of the second bracket, as proposed in Bill C-2?

[Trevor McGowan, Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance]

We're here to discuss Bill C-2, an act to amend the Income Tax Act. The bill has three main components; first, changes to the personal income tax rates; second, changes consequential to the introduction of the new top marginal income tax rate; and third, restoring the TFSA to its previous level.

I'll first describe the personal income tax rate changes.

These amendments are in clause 1 of the bill.

First, this amendment reduces the second personal incomes tax rate to 20.5% from 22%. This reduced rate would take effect on January 1, 2016. For the 2016 taxation year, it would apply to income earned in excess of $45,282 and up to $90,563. These bracket thresholds are indexed to inflation for subsequent taxation years.

Second, this amendment introduces a new 33% personal income tax rate. This tax rate would apply to individual taxable income in excess of $200,00 and would take effect on January 1, 2016. As with the other bracket thresholds, the $200,000 threshold would be indexed to inflation.

A number of income tax rules either use the top personal income tax rate or use rates or formulas that reflect it. Clauses 2 to 8 and also 10 of the bill contain consequential amendments to a number of provisions that relate to the top marginal rate. In addition, the federal budget tabled on March 22 announced a number of additional consequential amendments to be introduced in a future bill.

Individuals who make charitable donations to registered charities and other qualified donees may be eligible to claim a federal charitable donation tax credit. Annual donations of up to $200 are entitled to a 15% tax credit rate. Donations in excess of $200 are currently entitled to a 29% tax credit rate.

For gifts made after 2015, clause 3 of the bill would provide a 33% tax credit for donations in excess of $200 to the extent that donors have income in the new top income tax rate bracket. Under the income tax rules, a special tax applies at the highest marginal tax rate to so-called split income paid or payable to a minor. In general terms, this tax is intended to prevent individuals who are taxed at the top marginal rate from diverting certain types of income to their children to be taxed at much lower rates.

Effective for the 2016 and subsequent taxation years, clauses 3 and 4 provide that the tax on split income will remain subject to the flat top rate taxation but at the new rate of 33%. Trusts, other than qualified disability trusts, and estates, other than graduated rate estates, currently pay tax at the top federal marginal tax rate applicable to individuals. Effective for the 2016 and subsequent taxation years, clause 5 provides that trusts and estates that are subject to this flat top rate taxation would be taxed at the new top rate of 33%.

Given that corporate tax rates generally are lower than personal tax rates, special refundable taxes are imposed on investment income of private corporations in order to limit the ability of individuals to defer taxation by holding investments in a private corporation. Clauses 6 to 8 provide that these refundable taxes and the related refund rate be increased effective January 1, 2016 to reflect the proposed new 33% personal income tax rate.

Most significantly, the refundable additional part 1 tax on investment income of Canadian-controlled private corporations often called CCPCs would be increased by four percentage points from 6 2/3% to 10 2/3%. The refundable portion of part 1 tax on investment income of CCPCs would be increased by four percentage points from 26 2/3% to 30 2/3%. The refundable part 4 tax on portfolio dividends received by private corporations would be increased by five percentage points from 33 1/3% to 38 1/3%. The rate at which refunds are made out of a private corporation's pool of refundable taxes previously paid, known as refundable dividend tax on hand, would be increased by five percentage points when it pays dividends. This is from 33 1/3% to 38 1/3% of dividends paid.

Finally, clause 9 of the bill returns the TFSA annual contribution limit to its previous level of $5,500 from $10,000 and reinstates indexation of the TFSA annual contribution limit. These changes would be effective for the 2016 and subsequent taxation years and would not affect the $10,000 limit for 2015.

That's all. We'd be happy to answer any questions.

[The Chair, Liberal, Wayne Easter]

Good morning.

Pursuant to the order of reference of March 21, 2016, we'll deal with Bill C-2, An Act to amend the Income Tax Act. As well, as noted in the committee agenda, we will go an hour and a half with Department of Finance officials, and then we'll get into committee business and scheduling.

I note we are scheduled until the end of April, but we'll talk about the motions that are on the committee list, as well as the agenda going forward.

Welcome, officials from the Department of Finance. We have Mr. Jovanovic, who's the general director, tax policy branch, and Mr. McGowan, senior legislative chief, tax legislation division, tax policy branch.

Welcome. The floor is yours.

Financial Statement of Minister of Finance

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it gives me pleasure to speak to the budget entitled “Growing the Middle Class”.

Let me start with a quote from the Minister of Finance himself. He really summed it all up in his opening remarks. He said:

Today, we begin to restore hope for the middle class. Today, we begin to revitalize the economy. Today, we begin a long-term plan that will use smart investments and an unwavering belief that progress is possible to ensure that Canada's best days lie ahead.

As I said, that really sums up what this budget is all about. It sums up the objective of the budget. However, the budget is made all the more difficult by what the previous government has left us, or has left us without. Program after program was cut by the previous government. Earlier, the Leader of the Opposition talked about how the Conservative government had a surplus. No it did not. That was a surplus on a monthly basis, but accounting is usually done over the long term. The Conservatives left this country with $160 billion of added debt imposed on every citizen in this country. Not only did they leave us with debt, as I said, but they also cut programs and services. Even worse, they created disunity in the country.

If we are going to bring Canada ahead as a federation, we need to have a government that is willing to work with the provinces, to work together to grow the economy, to put in programs that we can utilize together to create growth in the economy and jobs for Canadians.

In reality, the budget builds on the measures introduced in December which provided a middle-class tax cut. We are dealing with that now with Bill C-2. Really what that did is bring better balance to the taxation system by giving those in the middle class a tax break and balancing that by taking a little more from those who can afford it. This budget builds on that commitment.

One of the key parts of this budget is looking to the future. That is done with the Canada child benefit, assisting those families in raising their children, giving them better opportunities to spend money where it is needed. The Canada child benefit will replace the current complicated child benefit system.

The Canada child benefit will provide a maximum annual benefit of up to $6,400 per child under the age of six, and up to $5,400 per child for those ages six through 17. Families with less than $30,000 in net income will receive the maximum benefit. Nine out of 10 families will receive more child benefits under this program than under the current system. Specifically in my own province of Prince Edward Island, they will receive $47 million more in child benefits during the 2016-17 and 2017-18 period. That is a benefit to families. It is putting the money where the resources should be put.

Not only are we dealing with families, but we are also dealing with the education of students so that we build for the future down the road. We are making post-secondary education more affordable through this budget. We are enhancing Canada student grants to give young people the opportunity to be able to afford to go to university and college.

Budget 2016 proposes to increase Canada student grants by 50%, from $2,000 to $3,000 per year for students from low-income families, from $800 to $1,200 per year for students from middle-income families, and from $1,200 to $1,800 per year for part-time students. We are not only building on the very young people, but we are building the education system as well for all Canadians.

I know this area is a little controversial, but for all Canadians we are improving the safety net for those who find themselves in difficult times as a result of being out of work. We are improving the employment insurance system after the disastrous way it was handled by the previous government.

We are expanding access to new entrants and re-entrants by dropping the 910 hours' entrance requirement to whatever the regional rate is. We are reducing the two-week waiting period to one week. We are improving the program for working while on claim. That is extremely controversial. It was extremely controversial in my area, because under the previous government's system, a person was penalized for going to work. Even people who were on maternity leave were penalized for going to work and keeping up their skills, especially those who worked in a hospital setting for one day a week while on maternity leave.

I do not mind admitting that there is some controversy around the next point I will make, and that is extending the five-week pilot project to those areas that were hardest hit by the downturn in the economy. I would say there is some controversy in my own region over that because that five weeks was not applied in that particular region, but it is targeted to those areas which have been greatly impacted by the downturn in some of the commodities in the marketplace.

The minister has committed to look at that into the future. The minister has committed to review the employment insurance system and those measures going down the road. I look forward to that review, to ensure that we get fairness and equity throughout the total measures around employment insurance in this country.

We improved the safety net for those finding themselves out of work. I do not have the time available to go into it, but we do look beyond employment insurance and we are investing in skills and training. We are enhancing the investments in training itself, strengthening the union-based apprenticeship training, supporting flexible work arrangements, and improving labour market information for Canadians. We are trying to put that workforce in a place where their skills will be needed in the future and expand on those skills to grow the economy.

However, it is not enough to deal with today's reality. We are looking at the long-term future. During the election campaign we talked a lot about investment in infrastructure. While we are looking at $11.9 billion over five years starting right away, budget 2016 puts this plan into action with an immediate down payment on this plan: $3.4 billion over three years to upgrade and improve public transit systems across Canada; $5 billion over five years for investments in water, waste-water, and green infrastructure; $3.4 billion over five years for social infrastructure, including affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities.

We are investing in the future. Specifically in my comments I should make this point: Major transfers to Prince Edward Island will total $582 million in 2016-17, an increase of $29 million from the previous year; $380 million through equalization, an increase of $19 million from last year; $147 million through the Canada health transfer, an increase of $8 million from the previous year; $54 million through the Canada social transfer, an increase of $1.6 million from the previous year.

My point is, my province benefits from this budget in terms of the transfers, in terms of the programs, and Canada as a whole can look to the future with opportunity and excitement because of what this budget does.

It addresses the problems created by the previous government and puts in place investments in families, infrastructure, education, and skills training, which is what Canadians really need to grow, with opportunity and the hope for prosperity in the future. That is what the Minister of Finance has done in this budget. I ask everyone in this House to be supportive of that to help build Canada's future.

Federal Public Sector Labour Relations Act

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

Madam Speaker, it is a privilege to stand in this place to share some thoughts on yet another very important piece of legislation, something that I suspect people should be supportive of.

I have had the opportunity on previous occasions to address different types of legislation. I would recommend that my colleagues, no matter what side of the House they are on, take into consideration that this legislation is before us because there was a Supreme Court of Canada decision that was made, and as a result legislation was then required. I would argue that this type of legislation could have, and possibly should have, been introduced long ago, even prior to the last federal election. I think it would have been nice to have had something in place.

I am very happy with the approach that this government has taken in addressing legislation, in particular with some of the labour issues. I truly believe that we can do much more in terms of improving the quality of the relationship between labour and management, not just within the private sector, but also the public sector.

A couple of weeks ago, I met a member of the public union at a local restaurant. He shared with me a questionnaire that was circulated among the civil service. It was discouraging. The questionnaire results were based, I believe from 2014. The results were very disturbing, in the sense that there is a high level of dissatisfaction, of mistrust. There is this sense that the Government of Canada was not listening to the needs of Canada's public service, or at the very least was not demonstrating respect for our civil service.

There has been a change in attitude since the last federal election. We have seen our new Prime Minister and the Canadian government take a different approach in dealing with our civil service, or unions in general. We recognize the valuable contributions they make to our society. This is ultimately recognized, not only here in terms of the citizenry of our country, but also in other jurisdictions in the world that have recognized the professionalism throughout our public service.

I tried to assure my constituent when he was sharing these very poor results from 2014 that there is a new attitude in Ottawa, in terms of appreciation and gratitude for the phenomenal work that our civil service puts in.

When I look at the legislation before us today, it is an extension of other areas in which the government is trying to to demonstrate that things have changed. There was a four-month extension that was given.

I listened to the comments, whether they were from Conservative critic or the NDP member of Parliament from Elmwood—Transcona, about wanting to see changes. I have good news for them. The good news is that we within government want to see change in the way in which our standing committees themselves operate. If the opposition takes the gesture that is coming right from the Prime Minister and the cabinet, and in essence from the government benches, I would suggest that we will see amendments brought forward, not only potentially to Bill C-7, but to other pieces of legislation.

I had the opportunity to serve over 20 years in opposition, and I have often had a sense of frustration when I wanted to see amendments brought forward, and for whatever reason—usually because they came from the wrong side of the committee—opposition amendments were just completely outright rejected.

I am suggesting, as have other colleagues, that there is a new open attitude toward the way in which committees and standing committees could be working into the future.

I tend to agree with the Prime Minister that a lot of the heavy lifting and the hard work can in fact be done in our committees. Therefore, when the member for Elmwood—Transcona talks about some of the ways he believes we have fallen short on the legislation, let me suggest for him and for all members—it does not matter whether they are even on the opposition benches, so even for my colleagues on the government benches—that if they are prepared to do the work and the consultation and share their ideas in a proactive fashion, in a progressive manner, they should not be surprised to see their amendments actually accepted and ultimately improve the legislation.

That could happen with Bill C-7 or any other piece of legislation, but the onus and the responsibility in good part is on those who are sitting on the committee. At the end of the day, if we are passing legislation through second reading and a member has some thoughts and some ideas that could improve the legislation, the government is open to listening to them. Why would we not approve, or at the very least consider, amendments that would improve the quality of the legislation itself? All Canadians would benefit from that. The Prime Minister has spoken out on this. We want to see more effective and functional standing committees that will ultimately contribute to improving the system.

I recognize, in the hour or hour and a half in which we have had the opportunity to debate this issue, that there were a number of members who talked about the importance of amendments. Let me qualify that by saying—and the parliamentary secretary in particular made reference to a fairly extensive survey where literally thousands of RCMP officers were consulted and feedback was solicited, and we received a considerable amount of information—that we understand what is being asked of the government in coming up with the legislation as to what they would like to see in the legislation. I will make more reference to that a little later in my comments.

We have to look at amendments to legislation from a holistic approach, everything from the legislation itself and the impact an amendment would have on the legislation, to what degree we are hearing from the different stakeholders and the witnesses who ultimately appear before a committee.

One of the things I really enjoy, coming from a provincial legislature to the House of Commons, is the degree to which standing committees have the ability to bring experts from across the country to provide their input on legislation—and on other matters, but specifically on legislation.

When the bill ultimately goes to committee, we will hear from experts from virtually all regions of our great nation, coming forward, sharing their thoughts, and I suspect from a combination of what they, opposition members, and government members are saying, that we might actually see some amendments brought forward.

I decided to take some time to emphasize the importance of this because there is a time limit. I do believe there is some merit to see the bill ultimately pass in a timely fashion.

As has been pointed out, the Supreme Court of Canada made its decision in January 2015. It said we needed to change the law to enable our RCMP, a wonderful national institution, to unionize if it chose to do so.

We were given a year. We had to apply for that four-month extension. From a court procedural sense, we need to speed up the process if we can. However, it should not be only about the perspective of the court. Many members of our RCMP have been anxiously awaiting this. The sooner we put this in place, then the sooner we would be allowing those fine members, who have served us so well over the years, to do what they would like to do.

There are two good reasons why I would recommend to my colleagues, no matter what side of the House they sit on, that they allow this legislation to go to committee. The sooner it gets to committee, the more opportunity the committee will have to deal with the many different issues that have been raised so far in the debate. Ultimately it will come back from the committee, and looking at the actual number of sitting days and the government's proposed legislative agenda, we see that time is a scarce commodity in this chamber. We could do a great service by recognizing the value of getting the bill to committee stage.

A number of thoughts came to my mind while I was listening to the Conservative critic, and I wanted to pose a question for him in regard to those thoughts. Some of his remarks were a bit off topic, for example, when he referenced debt and deficit that he attributes to Liberal prime ministers. If he has been listening closely to what the government has been saying, he is probably finding it intellectually challenging as to why he might stay on that side, given the number of times he has quoted Liberal prime ministers. Rather than adding more comment on that particular issue at this time, I will wait until we get the opportunity during budget debate. Suffice it to say that, when the member referenced the deficit, I would suggest that the Conservatives had a huge deficit and debt issue, far exceeding any Liberal administration since Confederation.

The member also made reference to Bill C-4 as if it were bad legislation. I am from Winnipeg, and maybe it is because Winnipeg faced the general strike of 1919 that I tend to differ with the Conservative Party. I recognize the valuable role that unions play in society, both today and into the future, but the Conservative Party in particular does not recognize this. We saw that with respect to the questions the member put forward and his statements while addressing Bill C-7. The member was critical of Bill C-4, but he does not recognize that Bill C-4 would improve Canada's labour legislation, just like the bill we have before us today. If passed, Bill C-7 would improve the labour situation here in Canada.

Bill C-4 is not the government's first priority piece of legislation. Our first priority was Bill C-2, which concerned our tax break for the middle class. Bill C-4 is a priority because the Conservatives changed labour legislation to the detriment of the union movement in Canada. That particular piece of legislation was brought in to rectify a wrong that the Conservatives had put in place.

That is the reason why I suggested earlier that the Conservatives have a different approach to dealing with labour legislation, which has ultimately led to what we have in Bill C-7 today. They had eight or nine months to deal with the legislation in some form or another. They have talked a lot about the secret ballot. They had the opportunity to put that into the legislation if they were prepared to bring it forward back then. However, it was a low priority, even though the Supreme Court of Canada had ultimately made a ruling. I would suggest that the Conservatives were negligent on this file and, as a result, that has created a time crunch, and I hope and I trust that all members will recognize that.

Before I get into more of the details of the legislation itself, I did want to pick up on a couple of important points. The most important one is that this legislation was brought forward to deal and assist with a free bargaining process for our RCMP officers. I do not think that enough could be said about the incredible work that our RCMP officers do from coast to coast to coast. The RCMP is one of those great Canadian institutions from which Canadians as a whole get a great sense of pride, especially when we see the traditional red uniform with the hat. It is something I believe embodies a great sense of pride for Canadians. It is an iconic institution that is recognized around the world as one of the greatest police forces of modern time. I believe we should all pay tribute to the fantastic work that the RCMP does.

We need to also recognize that this is not the first time that a police or law enforcement agency is looking at the possibility of forming a union. We have had police unions in Canada dating back almost 100 years, so Canadians do not need to be fearful of a union, as some members on the other side might try to espouse. There is a great deal of benefit to recognizing the valuable role unions have played in police forces in Canada to date. It is not as if we are going into an area that has never been explored in the past. The opportunity for the RCMP to unionize is very real, and I suspect it will likely happen. However, at the end of the day, it is the RCMP that will ultimately make that decision. The important thing to recognize is its right to have a collective bargaining regime. That was the essence of the ruling that was made by the Supreme Court.

I will highlight this fact. In that massive consultation and surveying that was done with RCMP officers, there were a couple of points that need to be recognized. One was that there was strong support for a union throughout all of those consultations and so forth. There was also strong support for a single national bargaining unit, and the idea of binding arbitration versus the ability to strike.

With those very few words, I trust and hope there will be a few questions.

Income Tax Act

[The Speaker, Liberal, Geoff Regan]

It is Bill C-2 and if I said Bill C-6, I apologize, but I do not think so. The vote is on Bill C-2.

I declare the motion carried.

Accordingly, the bill stands referred to the Standing Committee on Finance.

(Bill read the second time and referred to a committee)

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I hate to interrupt votes for clarification, but I thought we were voting on Bill C-6. However, I heard you call Bill C-2 and I do not want to vote the wrong way. I just want a clarification.

[The Speaker, Liberal, Geoff Regan]

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-2.

The House resumed from March 11 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.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I am pleased to rise to speak to Bill C-2. I am interested in finding out why the Liberals think that someone earning $200,000 a year deserves more tax credits. That is completely irrational and makes no sense.

My riding encompasses Montmagny, L'Islet, Kamouraska, and Rivière-du-Loup, as the name suggests. My riding borders the riding of my colleague from Rimouski-Neigette—Témiscouata—Les Basques and it includes Rivière-du-Loup and La Pocatière. La Pocatière is the gateway to the Lower St. Lawrence region, which is considered to be the poorest region in Canada. In some municipalities, the people are very far from rich.

Under this bill, Canadians who earn less than $45,000 a year, which represents the vast majority of my constituents, will not get any money at all.

The Liberals are implementing policies to supposedly help the middle class. This party boasts about being the middle-class party, but in reality, it is not helping 99% of middle-class Canadians, who do not earn more than $45,000 a year.

In my riding, family income does not exceed an average of $50,000 a year, which is very low.

As members of Parliament, we earn $167,500 a year, and we will soon earn nearly $170,000. Parliamentary secretaries earn a little more than $200,000. I will not even get into how much ministers earn. The fact remains that people in our tax bracket do not need this. We earn enough money and we do not need this money to justify tax cuts. We are the ones who will benefit the most. That makes absolutely no sense.

I repeat: in my riding, the middle class does not earn $170,000 a year. It earns less than $45,000 a year. I am a business owner, and I can tell you that I do not pay average wages of $45,000 a year if I want to keep my business afloat and continue to invest.

According to the government, this measure should be revenue neutral, in other words, it should not cause a deficit. The parliamentary budget officer said that the deficit will not be $1 billion, as announced, but rather $1.7 billion. It is completely irrational and makes no sense. What is more, that amount is permanent. It will be a permanent item in the budget in the years to come. By all accounts, this measure is ill-conceived and flawed. It needs to be changed. In any case, more than two-thirds of the population will not get one cent from this measure. It is not fair to anyone.

On average, a family might get an extra $6.50 a week. That is totally ridiculous. That is not even enough for two cups of coffee. The government needs to realize that it cannot use borrowed money to put the country in debt for policies like these, just to give a small group of people some extra money that is significant for that particular group. The majority of the Canadian middle class earns $45,000 or less a year. There is no doubt that changes need to be made to this legislation.

The other item is the TFSA. I am a business owner and I invest a great deal in my business. Over the past 10 or 15 years, I did not have the opportunity to take advantage of an RRSP or the TFSA because I invested my money in my business. Not everyone can count on owning a business to save for the future.

This measure allowed people to save $5,000. Then the ceiling was raised to $5,500, and then finally to $10,000. The Liberals just took away the $5,000 we added in our budget.

That is no way to help people save for the future. People have to understand that just because there is a ceiling does not mean that everyone is going to reach it one day.

That is not what that means at all. It means that people are being given tax room so that they can save.

I think it was the member for Hochelaga who said earlier that, in her riding, there are poor people who cannot invest a single penny because the cost of staying in their house or apartment is so high.

That is the reality. It is not just true in her riding. It is the same everywhere. When we develop a policy, we need to do so for all Canadians. Some people are successful and can save money. I forget the exact name, but there are organizations, I think they are called ACEF, that provide education, information, and training on how to save for adults and youth with good incomes. Tax room in the form of TFSAs or RRSPs is needed so that people can save money.

These are programs or mechanisms that allow people to save money. If these mechanisms, this room to save, were not available, people would not save money. People need to save. They need to start thinking about the future when they are young. When they get close to retirement and they have more money to invest, they need to be able to make tax-sheltered investments so that they can live comfortably for as long as possible.

The bill is badly flawed. I repeat: the middle class does not earn $170,000 a year. Everyone agrees that Canada's real middle class, people who earn less than $45,000, will not benefit at all from this bill. It is therefore a bad bill.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, I would like to take the opportunity at the beginning of this speech to thank all of the people of Peace River—Westlock for giving me the opportunity to stand in the House and make this speech.

Today, I rise to address the issue of fiscal responsibility. The previous Conservative government left the Liberal government a $1 billion surplus. At a time when the rest of the world was in economic turmoil, we kept a steady hand on the wheel and steered our country through that turmoil. Not only did we manage our resources prudently, but we paved a $1 billion road into the future.

In a few short months, the Liberals have squandered that surplus. When they originally introduced their new tax plan, they promised it would be revenue neutral. Since then, the Minister of Finance has conceded that the plan was not revenue neutral and would in fact leave us with a $1 billion in the hole.

A report from the parliamentary budget officer estimates the costs to be closer to $1.7 billion. This gross miscalculation speaks to the government's incompetence, and the fact that the Liberals are proceeding with legislation after admitting they have broken this promise to Canadians. This speaks to their integrity.

In my riding in northern Alberta, we have a number of industries, agriculture, oil and gas, and lumber, to name a few. We are a province of entrepreneurs, business people who understand the necessity of practising fiscal responsibility if they want their businesses to grow and thrive.

A spending spree on the taxpayers dime is not only a sign of poor fiscal management, it is an irresponsible behaviour that has drastic consequences down the road.

Who is going to pay for this shortfall? The Liberal Party has talked about eliminating a number of tax credits. When we look at the available tax credits, it is clear who will pay for the shortfall. It might be first-time home buyers, or families with kids in sports or the arts, or students or apprentices. The very people who need the tax credits will be the ones paying off the Liberals' billion dollar spending spree.

As everyone here knows, the price of a barrel of oil has negatively impacted Alberta. There have been massive layoffs in the oil patch, and this has had a ripple effect in many of our communities.

In my riding, unemployment is up, El applications are up, and the outlook for businesses, especially those connected with the oil patch, is grim. I had a call from a transport truck driver the other day. He is in his fifties and has worked hard his entire life. Now, he cannot find work. Trucking outfits are scaling back, and no one is hiring. His El has run out, his savings are dwindling, and his rent is past due.

Why is the government focusing on tax credits and income tax hikes when what we need is a plan to create jobs? We need a plan to get Canada back on solid ground.

There is a lack of evidence or explanation on why the changes in Bill C-2 would stimulate economic growth and development for Canadians. The Prime Minister believes that small businesses are tax havens. Does he plan on increasing payroll taxes on job creators?

It is important to remember that small businesses create a large percentage of the jobs in Canada. Increasing payroll taxes on our job creators creates an extra burden on companies that are already struggling in these economic times. The fact is that many companies are downsizing right now. Now is not the time to increase business taxes.

Neither is it time to raise taxes on higher income earners. These are the people who traditionally create jobs and grow our overall economy. By increasing taxes on these job creators, we are discouraging success, and punishing those who have done well for themselves. We cannot spend our way to growth, and we cannot tax our way to prosperity.

We have looked at all the tax cuts the Liberals are proposing for the middle class. Based on Finance Canada's estimates, the new Liberal tax plan amounts to, on average, an extra $6.34 per week for those individuals who qualify, and $6.34 might buy a block of cheese or a few litres of gas. This tax break would not be enough to grow our economy. It would not stimulate growth or innovation. This modification to the income tax rate would hardly qualify as a significant tax relief for Canadians and it comes with a much larger price tag.

When the previous Conservative government was in office, we reduced taxes more than 140 times. We have a proud legacy of tax fairness. We cut taxes through targeted measures that were responsible.

We would all be better off if the government worried less about the income tax rate and instead focused on creating jobs so more people could pay in.

There is another amendment I would like to address, and that is the issue of tax-free savings accounts. The Liberals have unaccountably decided to slash contribution limits for the tax-free savings account to $5,500.

Many Canadians rely on these savings accounts to plan for their future. Students save for higher education, couples save to start a family, entrepreneurs save to start a business, parents save for their children, and low-income seniors save for their retirement. These changes would make life less affordable for Canadians who are trying to save for their vulnerable years.

Financial literacy is a subject now taught in some schools. As a parent, I will teach my own children practical money skills. It is an important concept to grasp, that if we want to keep ourselves financially secure and free of uncontrollable debt, financial responsibility is important to the well-being of individuals, families, businesses, and our nation.

A recent report from the parliamentary budget officer points out that Canadians are taking on uncontrollable levels of debt, and we have the highest debt in the G7 at 171% of our annual income. Households now face overwhelming exposure to negative income and interest rates and will likely become delinquent in their debt payment.

Responsible Canadians are looking for a way to save when times are good so that they can be protected. Reducing TFSA contribution limits would reduce the ability of Canadians to save for their retirement and to protect themselves in economic downturns.

TFSAs provide a concrete vehicle for financial independence for Canadians. We should be encouraging responsible saving. Instead, the Liberals are turning a blind eye to financial literacy. They are taking options away for saving and are putting more Canadians at risk. This will translate into a greater burden on all taxpayers to support those who are unable to support themselves.

I would like to point out that this future cost to taxpayers is what the Liberals have neglected to calculate. Fiscal responsibility is a fundamental component of good government. The Liberal tax plan, a plan that runs massive and long-term deficits, will burden the taxpayer and leave Canada more vulnerable to sudden, economic shock.

Our Conservative caucus will stand up for taxpayers and press the government to approach spending in a responsible manner, to protect against risk, and to ensure stability and long-term prosperity.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Whoops, it would blow a $1-billion hole in the deficit. I repeat, $1 billion.

Then we just found out from the parliamentary budget officer that, no, it will not be a $1-billion hole, but more like a $1.7-billion hole in the deficit. That is on top of the billions and billions and billions of dollars the government keeps on digging as it blows through the $1-billion surplus the previous Conservative government gave it.

Who is going to bear the burden of the so-called Liberal middle-class tax cut? We guessed it: middle-class Canadians. In order to pay for the so-called Liberal middle-class tax cut, the government is going to roll back TFSAs, the tax-free savings accounts, the most flexible investment mechanism available to Canadians.

It would roll back the opportunity for students to save for higher education, roll back the opportunity for families to save for their children, roll back the opportunity for entrepreneurs to save for their small businesses, and roll back the opportunity for seniors to save for a later day. That is what the current government wants to do. The Liberals want to roll back TFSAs from middle-income Canadians.

The frightening part is that the Liberals are just getting started, because the Prime Minister and members opposite keep talking about boutique tax credits. The Liberals effectively want to roll back all of the tax relief that the previous Conservative government provided Canadians. Canadians on average got back $6,600 in tax relief. All of that is in jeopardy because of the Liberals' so-called middle-class tax cut.

I heard one of my colleagues say “smoke and mirrors”. I would say that the Liberal middle-class tax cut is really a Liberal middle-class tax cut fraud. That is what it is.

The so-called Liberal middle-class tax cut would do absolutely nothing to give back back to hard-working Canadians who work hard every single day in order to move ahead. It would give them back absolutely nothing. The so-called Liberal middle-class tax cut would do absolutely nothing. In fact, it would take away the opportunity for hard-working Canadians to save and invest. On top of that, it would burden middle-class Canadians with billions of dollars of additional debt that other middle-class Canadians would in the end repay.

It is absolutely essential and imperative for the sake of middle-class Canadians that Bill C-2 be defeated.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, I rise in opposition this afternoon to Bill C-2, an act to amend the Income Tax Act.

Bill C-2 would implement the so-called Liberal middle-class tax cut. The biggest problem with that so-called Liberal middle-class tax cut is that it does not actually cut taxes for middle-income Canadians. I will get to that in just a minute.

Bill C-2 would reduce the income tax rate from 22% to 20.5% for Canadians earning less than $200,000. It sounds pretty good on the surface, and I guess during the election campaign a lot of Canadians thought it sounded pretty good, but, like everything, the devil is in the details. What does it actually mean? How much are Canadians actually going to save? The answer is not a lot.

Take, for example, a Canadian who earns between $62,000 and $78,000. How much would that Canadian save under the so-called Liberal middle-class tax cut? The answer is about $117 a year or $2.25 a week. What does $2.25 get someone in Canada these days? I think a person would be lucky to get a double-double at Tim Hortons.

What about someone who is making $48,000 to $52,000? How much would that individual get back by way of the so-called Liberal middle-class tax cut? It would be $51 a year, or less than a $1 a day. That person would be lucky to to get a doughnut or a muffin at Tim Hortons in the morning for less than $1, but that is what the Liberals are offering Canadians earning $48,000 to $52,000 a year.

How about Canadians who earn $45,000? I would say that is pretty well smack dab in the middle of the middle class. How much will get under the so-called Liberal middle-class tax cut? The answer is zero, zip, nada. As I say, the biggest problem with the so-called Liberal middle-class tax cut is that it does not cut taxes for middle-class Canadians.

What is the cost of the so-called Liberal middle-class tax cut? The Prime Minister, during the election campaign, went all over Canada with his sunny ways and blue skies, saying it would be revenue neutral. Then barely after the ballots were counted, the Prime Minister had his finance minister, because I guess he did not have the courage to do so himself, say it would not be revenue neutral.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I too am pleased to join in the debate today. This is, of course, really the first substantial piece of legislation that has been put forward by the Liberals. It is interesting that we have mostly been focused on the change in the marginal tax rate and the TFSA, and I am going to spend most of my time on those two issues, but for people who might be following the debate, this legislation does have a couple of other pieces to it: charitable donation tax credits, income earned by child, income earned by a trust, and taxation of corporations and shareholders.

If our party, when we were government, had put this particular bill forward, I think the Liberals would have said we had put forward an omnibus bill. They would have asked what we were doing and they would have said it was an omnibus bill because it included six different pieces.

I recognize that within an important piece of legislation it is sometimes sensible to do things that perhaps are not that controversial and are a bit of housecleaning, so there are some more pieces to this bill. It is not an omnibus bill, although the Liberals would have characterized it as such if we had put it forward, but there are some additional pieces.

As I indicated, the focus of my comments is going to be on the two pieces that most people are making comments on today. One of my colleagues called it the bill that giveth and taketh away. I think I would describe it as a bill that represents the first broken promise of the Liberal government.

The Liberals are saying they went to Canadians and were given this mandate. They told Canadians they were going to tax the rich and give it to the middle class. The Liberals did indeed tell Canadians that particular piece of information, but what they also said when they were going to Canadians during the election period was that the change would be revenue neutral. That is broken promise number one, and it is a big broken promise. It is an $8.9-billion broken promise over six years. This is not about fulfilling a promise, but about breaking a promise to Canadians.

What is that change in the tax structure that giveth to the middle class and taketh from the rich? Apparently just today, I understand, the Prime Minister of Canada called it a tiny bit of redistribution. That is what he called that change in the tax level for people who earn over $200,000. Moving from 29% to 33%, he said, is just a tiny bit of redistribution.

If we do the math, what he has actually done is given them a 12% increase in their taxes. Going from 29% to 33% is 12%. People can make $200,000, and it is a lot of money, but people with a large family who all of a sudden are hit with a 12% hike in their taxes will find It is a pretty significant hit. Everyone's circumstances can be a little bit different, but for those people who earn over $200,000 who are maybe paying off student debt or who have other elements, calling it a tiny bit of redistribution is a bit of a fallacy.

When the Prime Minister said he was going to give the money to the middle class, he never really defined the middle class. I do not think Canadians would consider the parliamentarians in this House, who are making good money, to be part of the middle class. I think our salaries are available on a website, and we are just below the $200,000. Some of the parliamentary secretaries are probably butting up to that level. They are actually benefiting the most from this tax break. If Canadians had been told that fact, they would have perhaps been less enthusiastic. They might have asked about those people making $190,000 getting tax breaks, and not only getting tax breaks but adding to the debt of our nation by doing so.

To be quite frank, the Conservative government believed in keeping our taxes as low as possible. Conservatives always support lower taxes. To be frank, when $6 a week is being added directly to the debt of this country, I think that if I had to make a choice, I would say, “Please do not put that $6 a week onto my children. I will pay that $6 a week myself.”

There are a lot of problems with this measure, which is absolutely unsupportable from our perspective. The biggest concern is that it would create a structural deficit when we actually handed the Liberals a surplus. Wrong promises and miscalculations have created a significant problem for them. We have called this a “whoops” in other speeches. This will be a burden on our children.

Now I want to shift to the tax-free savings account. The Liberals seem to love the stick approach to getting people to do things when it comes to government programs, making things mandatory, increasing the CPP, like the Ontario government is doing. They do not like carrots. They would rather have a big government program that makes people do things. Our party believes we need to provide Canadians with the opportunity and the flexibility to make their own choices.

The Liberals talk about only the rich being able to afford $10,000. I will give the House a couple of real-life examples about why the TFSA is an incredibly important tool for Canadians and that the $10,000 contribution limit is quite reasonable.

My first example is that of a young adult who has come into a small inheritance. This young person has never been able to contribute to a tax-free savings account, having just finished school. This young adult decides to put that money into a tax-free savings account and is able to grow that investment instead of spending that inheritance right away. This individual has decided to use it for the future, and in a couple of years buys a first house. Is that an inappropriate thing to do? It is a reasonable and sensible choice for someone who otherwise would have had no options.

Many seniors are now selling their homes and moving to assisted living facilities, or to a complex that provides support. They might have made some money on the sale of their homes. They have maxed out their RRSPs, but they have room to put some of that money into a tax-free savings vehicle that will help them in the future to pay their monthly expenses.

These are just two examples of why having a robust tax-free savings account is important. I recognize that not all Canadians can put in $10,000 every year, but there are times in their lives when they could. That is the beauty of the product. It is not that individuals had to contribute $10,000 every year. There are years where people might not be able to put a penny in, and there might be some years where they could top it up to where they needed to be.

I have demonstrated today that Bill C-2, the first substantial bill to be put forward in the House by the Liberal Party, has some serious and significant flaws. It would add to Canada's structural deficit. It would not do all that much in terms of the middle class. It would take away an important tool that people have in terms of saving for their future, whether they be young or old.

I would ask that the Liberals perhaps reconsider this legislation. They have been given a surplus. I would urge them to not keep adding to the debt. We are $18 billion, we are $30 billion in deficit. Those are frightening numbers. Perhaps the Liberals should rethink their plan and look at what they are going to leave for their children and their grandchildren.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Speaker, when the Liberals originally introduced this new system of tax breaks, they promised it would be revenue neutral. Shortly after taking office, however, they abandoned this promise. It is projected by the parliamentary budget officer that Bill C-2's changes will cost Canadians $8.9 billion over the next six years.

This gross miscalculation speaks to the government's incompetence, and the fact that the Liberals are proceeding with this legislation after admitting they have broken this promise to Canadians speaks to their integrity.

In fact, many of the government commitments seem to be falling by the wayside: a $10-billion deficit cap, consultation with opposition, openness and transparency. That is three months and three major broken promises. So much for sunny ways.

This leads to a lack of trust in the government's future plans. There is a lack of transparency with this promise. Who knows how much higher these costs will go? There is a lack of evidence or explanation for why Bill C-2's changes would stimulate economic growth and development for Canadians.

Tax breaks for the middle class are not, in themselves, sufficient to stimulate economic growth and development. It is, therefore, quite likely that more initiatives will have to be introduced.

These will require even more money from the government. This money will either have to be drawn from reduced spending on public services or from the taxpayer base. Given the vulnerable economic state of Canada, tapping further into government revenue is particularly risky for this country as a whole, and also for individual Canadians.

The government continues to move ahead with these types of long-term commitments, even amidst a struggling economy, a weakening dollar, and plummeting oil prices. Canadians are asking how much higher the cost will go. These kinds of commitments are one more chip into creating long-term structural deficits, and in turn they discourage investment and growth in a struggling economy.

Our Conservative government worked very hard every day in office to stretch every cent. We left the government a surplus and expected that to be spent with caution. It seems that work was all for nothing.

The Liberals continue signalling that they plan to run massive, long-term structural deficits, which will increase the burden on taxpayers and leave Canada more vulnerable to sudden economic shocks. Our Conservative caucus will continue to stand up for taxpayers, and press the government to approach spending in a responsible manner, to protect against risk, to ensure stability and long-term prosperity.

On the subject of changes to the tax-free savings account, all Canadians over 18 may contribute to TFSAs for all purposes, not just education and retirement savings. This makes the savings mechanism the most flexible way for all to save. It is because of this that many Canadians of all backgrounds have come to rely on the tax-free savings accounts.

We have heard from students saving for higher education, families saving to start a family, entrepreneurs saving for their businesses, parents saving for their children, and low-income seniors saving for retirement, all of whom are investing in TFSAs.

It is Canadians of all kinds of financial backgrounds too. The majority of TFSA accounts belong to low- and middle-income earners. The fact is that two-thirds of TFSAs are held by tax filers with incomes less than $60,000.

What kind of message is the government projecting when it is taking away the ability for Canadians to save for their future, while racking up massive deficits?

Why does the government continue down the path of a nanny-state approach, limiting choice for Canadians to save their own money?

These are not mandatory contributions. In contrast, the Ontario Liberal plan for a provincial pension plan is. If the argument is that very few Canadians have the ability to afford a maximum contribution, why is the member opposite so opposed to offering that choice, while in other instances forcing it upon others?

Personal fiscal responsibility is something that our government should be encouraging, regardless if it refuses to lead by example.

We are in uncertain times, with dropping commodity prices, a dipping dollar, and slowing economic growth.

Recently, the PBO released a report on the state of household indebtedness and financial vulnerability in Canadians, showing that household debt-servicing capacity continues to trend upward, while capacity to meet debt obligations diminishes.

Households now face overwhelming exposure to negative income and interest rates, and are more likely to become delinquent in debt payments.

Responsible Canadians are looking for a way to save when times are good, so they can be protected. Reducing TFSA contribution limits would reduce the abilities of real Canadians to save for retirement and to protect themselves from economic shock.

This would translate to a greater burden upon all taxpayers to support those who will be unable to support themselves. Why is the government hiding these future costs from its taxpayers?

In contrast to Liberal deficit spending, whose purposes are unclear, TFSAs provide a concrete vehicle for financial independence for Canadians. Instead of encouraging consumption, they encourage saving—promoting independent control over funds—which shields Canadians from economic shock.

The burden of economic shocks on vulnerable Canadians will ultimately fall on the overall taxpaying base if the government must step in and support these individuals. Money will come from taxpayers, or public services will be compromised for the expense of increased government financial support.

TFSAs remove barriers for all Canadians to maximize their financial positions. TFSAs are open to all Canadians over 18 years of age with valid social insurance numbers. They are simple and accessible. Anyone can contribute any amount. They encourage financial literacy and curiosity.

In fact, the majority of TFSA accounts belong to low- and middle-income earners. TFSAs allow investments—any sort of investment—deposited into them to grow tax free. TFSAs make retirement savings more accessible, simple, and compelling. If individuals do not save enough for retirement, all taxpaying Canadians will ultimately be responsible for the burden.

The government's spending plans, including its nebulous deficits, are risky. We have seen no concrete evidence for targeted growth plans. Savings will shield vulnerable Canadians from the risks involved.

Conversely, limiting savings tools will limit economic self-protection and make Canadians more economically dependent upon the government. This is dangerous, given the lack of clear economic plans and directions from the government. Government dependence will likely translate to higher taxes for Canadians across a wide socioeconomic spectrum.

In popular debate, the media, and academic research, a brain drain out of Canada is cited as a very real possibility. Most doctors, lawyers, and other skilled professionals are found in the upper tax bracket, and their departure could be very dangerous for Canada.

Progressive taxation reduces investment, risk-taking, and entrepreneurial activities, since a large share of these activities is done by high-income earners.

The substitution effect is a principle that essentially states, “I'm getting less money for each hour I work; therefore, I should work fewer hours”.

Tax avoidance activities such as reporting less income, using tax-planning techniques to reduce the tax burden, working fewer hours, or even not seeking job promotions are very real possibilities.

Progressive income taxes reduce the returns to education, since high incomes are associated with high levels of education. They reduce incentives to build human capital, the kind of investment the Prime Minister talked about in Davos, while turning his back on our resources sector.

Academic consensus among experts is that taxes on both corporate and personal income are particularly harmful to economic growth, as economic growth ultimately comes from production, innovation, and risk-taking.

The conclusion is that tax rates of over 50% will not raise revenue. Between provincial and federal income taxes for top income earners, this is what would happen under Bill C-2.

I will not support Bill C-2.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, we are talking about the Liberals' Bill C-2. They claim that their bill will have a positive impact on middle-class workers, but it will actually make the rich richer. Two-thirds of Canadians will not see a penny more despite this proposed tax cut.

People earning $45,000 or less per year will not benefit from the Liberals' tax cut. The Liberals are making a big fuss about this, and that is why we are standing up in the House to say that we really need to work on bringing in meaningful measures that benefit the many thousands of Canadians who earn approximately $31,000 per year.

Society's poorest people are waiting for the Liberals to spare a thought for them and do something to help them put food on the table, pay their debts, and buy prescription drugs.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, the Liberals have said over and over again that they have a plan for the middle class. They promised quick, urgent and very positive change. However, since coming into office, they have given very few details about their plan, the deadlines and the proposed targets.

Bill C-2, an act to amend the Income Tax Act, is the starting point for a plan. For that reason, I applaud the proposal to reduce the contribution limit for the tax-free savings account, known as the TFSA.

However, the Liberals added to this bill a provision to change taxation rates that will not benefit those most in need, that is, those who earn less than $45,000. The Conservatives' $10,000 limit did not make sense. When it was introduced in 2015, many analysts and economists pointed out that it would benefit only the wealthiest 30% in our society.

Who can afford to sock away $10,000 every year in a tax shelter? It is obviously not recent university graduates or new entrants to the job market. Nor is it average workers in Quebec or Canada who earn a median income of $31,000 or anyone earning less than $45,000 per year. Those people make up about two-thirds of the population.

Such a measure would cost the government a huge amount of money. Over a 10-year period, the Conservatives became adept at reducing government revenue, and increasing the TFSA limit to $10,000 was the icing on the cake. To substantiate that, I have a quote from Gilles L. Bourque, Éditions Vie Économique coordinator and Institut de recherche en économie contemporaine researcher:

...this tax advantage is a ticking time bomb for federal and provincial public finances.

...it is clear that maintaining and expanding this kind of measure flies in the face of every principle of social solidarity and fiscal fairness and will worsen every aspect of social inequality.

I have another quotation I would like to read, because I find it incredible that the wealthy are being allowed to put more and more money aside, while those most in need simply cannot do the same. Furthermore, this measure would have affected several social programs.

For instance, Malcolm Hamilton, a senior fellow at the C. D. Howe Institute, said, “Raising the TFSA limit is a short-sighted election tactic that will lead to real problems 10 to 15 years from now.”

Why? By allowing more people to set money aside tax-free, future governments would have less financial resources to pay for other national social programs, such as pharmacare, old age security, GST rebates, and long-term health care.

That is why the proposal to bring the limit back down to $5,500 makes sense, in my view. It is a step in the right direction. Unfortunately, Bill C-2 has a major flaw, specifically a change in the tax rates that makes no sense, but I hope we can correct it at the committee stage.

The current economic context is bleak. In Quebec, hundreds of Bombardier workers are going to be laid off. The weak dollar has increased the cost of groceries. Just look at the price of fruits and vegetables and the number of people, seniors, low income families, and single mothers who are having a hard time preparing meals with fresh fruit and vegetables on a daily basis.

The Liberals presented a plan to the House not to help those having a hard time making ends meet, but to help the well-off, the wealthiest in our society. One of the key measures in this bill gives a break to the second tax bracket, those who earn between $45,000 and $90,000 a year. Does the Prime Minister realize that the median annual income in Canada is only $31,000?

As a result, the first tax bracket, or nearly two-thirds of Canadians, will get nothing, nada, niet, no help, when they could use a bit of breathing room.

According to the parliamentary budget officer, almost 17.9 million people will not benefit in any way from this Liberal measure. Even worse, those with the highest income will continue to receive a generous tax credit thanks to the Liberal plan. Thus, every member of Parliament will receive an additional $679.22. I imagine that we should thank the minister for that. I am obviously being very sarcastic.

According to Statistics Canada, in my riding of Salaberry—Suroît, almost nine in ten people, which is a huge number, earn less than $50,000 and will receive next to nothing, or just a few crumbs if they earn between $45,000 and $50,000. The income of almost half the households in my riding is less than $45,000, and they will receive absolutely nothing. I am certain that most of my colleagues, like me, would prefer to give my tax credit to a cashier working in a grocery store in Salaberry-de-Valleyfield, a labourer in Saint-Zotique, or a social worker in Huntingdon, who struggle to provide services every day for the greater well-being of their fellow citizens.

We must do much better for Canadians. In recent days, we have heard a lot about the KPMG scandal, which the Liberal government did not handle very well. The CRA made a secret deal with this accounting firm and millionaires who committed fraud. Under this agreement, the millionaires will only pay their taxes, but no fines and virtually no interest. The CBC talked about an amnesty.

What message is the Liberal government sending? Tax avoidance is for those with millions of dollars in the bank. There will be no additional cost and, in exchange, the tax rate will increase slightly. However, let us keep it quiet; we are not going to tell anyone.

This Liberal plan will clearly not address the growing inequality in our society and the CRA's attitude could well contribute to it.

The NDP's proposal would give more breathing room to a large part of the population that does not have access to specific programs, such as income splitting.

Rather than reducing the tax rate for the second tax bracket, the NDP is asking the government to lower the rate for the first tax bracket by one percentage point, from 15% to 14%, for those who earn less than $45,000 a year. That would allow 83% of Canadians, those who earn less than $45,000 a year, to pay less tax and keep more money in their pockets, which is not what will happen under the proposed Bill C-2.

According to the parliamentary budget officer, nine million Canadians would benefit from the measures proposed by the NDP. It would also give a little extra help to a hairdresser in Coteau-du-Lac, an office worker in Beauharnois, or a cook in Hemmingford, for example. That is why we are in politics. We are supposed to work to reduce inequalities, so that there is less and less social and economic injustice.

The difference in cost when compared to the Liberal's proposal would be minimal, and it would be offset by a slight tax increase of half a percentage point for large corporations. That is the least that our large banks, in particular, could do. This increase in corporate taxes would even generate a surplus that could be used to develop the working income tax benefit, an effective program that increases the income of workers with low annual incomes.

Bill C-2 needs a lot of work, and I hope that the government will listen to our suggestions. The NDP is a progressive party and we are proposing realistic measures to help the real middle class, the people who truly need help.

I want to share some measures that could change the daily lives of my constituents: the national child benefit supplement, a $400 increase to the guaranteed income supplement for seniors, and the return of the tax credit for labour-sponsored funds that help small businesses in Salaberry—Suroît and Quebec.

We will continue to pressure the Liberals to follow through on the changes they announced and to work towards reducing inequalities across Canada.

I hope that Bill C-2 can be amended in committee to reflect the NDP's suggestions on taxation.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, changes to the Income Tax Act as proposed by the new government are a major concern for entrepreneurs and professionals from coast to coast to coast.

These are the people who drive our economy, the small business owners who have taken a chance in their life, and through their hard work are now being rewarded. Now the government has taken the initiative out of the most ambitious people in our country, like the doctors who have studied for years, have made huge sacrifices, and have built up huge debt, knowing there was a reward for them at the end of the day.

Last week, I went to a young optometrist in Saskatoon. She was just starting her career. She is under 30 years of age. The professional spent the better part of her twenties in school. She graduated with a mountain of debt. This was a concern. However, at the same time, this young professional was confident that over time she could make it up.

Now we are not too sure about this young optometrist. With this plan of more taxes for higher income earners, we are discouraging success and are actually punishing those who are high achievers in this country.

Saskatoon will be the home of a much-needed children's hospital. This has been a dream of ours and our province of 1.2 million for decades. Many families in our province were forced to send their sick children to centres like Calgary, Edmonton, Toronto, and even to Minneapolis, Rochester, and New York.

We now have the opportunity in our province to have the sick children stay at home and be well attended to. Construction has started on this project in the Saskatoon area, and optimism is very high. However, there is a legitimate concern about where the doctors will come from to feed this fabulous facility.

This is a specialty area, and it is competitive for these specialists. Not only do we compete with other provinces like Alberta, B.C., and Ontario, but with these proposed changes in the Income Tax Act, we will be losing our professionals to other parts of the world. What good is the bricks and mortar, if we cannot staff this facility with highly qualified professionals? How can we be competitive with this extra burden on those who are in this tax bracket? They will simply pick up and leave Saskatchewan, and leave Canada.

This is called “brain drain”. This Liberal tax plan will certainly lead to an exit of professionals right out of this country. I have talked to many doctors and dentists who employ a lot of people in our city. They do not need to be putting in extra hours, knowing they will be paying more taxes to the government. Many have said they will simply cut back on their hours. Instead of serving the public for six or even seven days a week, they have all said they are going to cut back their hours.

Professional athletes already have apprehension about playing in Canada. Let us take the NHL players in Ottawa, Montreal, or Toronto, along with Calgary, Edmonton, and Vancouver. With higher taxes, they can make the decision, telling their agents when they are free agents, that they simply do not want to play in Canada. When free agency hits, they have the option. They can actually put a no-trade clause into their contract not to be based on a Canadian team.

The reason is simple. Hockey is a business, and players know they only have a small window of opportunity to make their living. Taxes matter in this age group. It is no coincidence that if the playoffs were to open today in the NHL, not one Canadian-based team would make the NHL playoffs today.

Yesterday, the President of the United States made a reference right in front of the Prime Minister, asking where was the Stanley Cup. Well, guess what? The cup is in the President's home town of Chicago. Do we think that is a level playing field? It certainly is not.

How about the members across from me? Could it be another 50 years before Maple Leaf fans can plan a Stanley Cup parade down Yonge Street with this tax plan? The same goes for the entertainment business. Canada's most talented people today come from a zip code instead of a postal code, and this is going to make it worse.

I can tell the House that Canadian charities are very concerned with this Liberal tax plan and this bill. High-wage earners over the years have been very generous with their money in our communities in Canada. If not for this group, many social organizations would not be around today. These are the people who dig deep for charities so they can provide the necessary programs needed in our communities. I have sat on many charities in my city over the years, and if it were not for some of these professionals, organizations would have closed their doors long before now. Charities that do not need federal handouts can continue operations because of this class of people who give back to the community in many ways. We have all been in offices that have local art on the walls. That is because people give back to their communities so that others can enjoy their lifestyles and passion.

When the Liberals originally introduced this new system of tax breaks, they promised it was going to be revenue neutral. Four months later, though, the finance minister conceded in the House that this plan is not revenue neutral at all. A recent report from the parliamentary budget officer estimates that the cost could actually be closer to $1.7 billion. We already know that the government has blown by its $10-billion deficit per year that it promised during the election campaign. We are at least at $18.4 billion, and climbing every day. Conservatives cannot wait for the budget to come down to see the number on March 22.

I ask, who is going to pay for this? It will have to be repaid at some time. Is it our kids or our grandchildren who will pay for this Liberal tax plan? It is a broken promise because it was grossly miscalculated. I might add that it will completely eliminate the $1 billion surplus that the Conservative government handed over to the Liberals last year.

The Conservative government, and rightfully so, believed in the concept that people need to save for the future, a future that requires at one point or another taking money out of the popular TFSAs for an emergency. This was designed to take the burden off the federal government so that it could redirect much-needed money to other programs in this country. Now there is no incentive at all to put money away. The very popular TFSAs have been sliced back. Many families and seniors in my riding of Saskatoon—Grasswood are not happy at all with this new Liberal tax plan.

The report yesterday said it all in The Globe and Mail. It stated, “The more we get to know TFSAs, the more they demand attention as a vehicle for retirement saving.” The previous Conservative government introduced this program. It was a great tool for investing, even for a first home.

Canadian household debt is at an all-time high today. This country lost 2,300 jobs last month, instead of the expected gain of 10,000. Canada's unemployment rate is at 7.3% today. That is the highest level in three years. It is only going to get worse with this new Liberal tax plan. I will not support Bill C-2 today.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I would like to thank my colleague for his question.

I think that we need to look at the government's approach as a whole, in a holistic way. Yes, there is the tax cut set out in Bill C-2, but we have also committed to introducing the Canada child benefit, which will lift 315,000 children out of poverty. We did the math for my riding, and this benefit will lift approximately 1,000 children out of poverty.

To come back to the previous question about seniors, members need to think about our government's commitment to increasing the guaranteed income supplement. It would have been impossible for the NDP to keep this type of social commitment because it also made a commitment to balance the budget and achieve a zero deficit no matter what the cost.

I think that we have the best approach, a more progressive approach. Bill C-2 may not be the final destination, but it is certainly a step in the right direction.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I would like to thank the member for Hochelaga for her excellent question. I share her concerns in that regard.

In my riding, I believe that 42% of the population spends more than the recommended 30% of income on housing. That being said, we need to look at the government's overall approach. Yes, Bill C-2 lowers taxes for the middle class, raises them slightly for the wealthiest members of our society, and does away with the previous TFSA limit, which in my opinion is a very good thing. However, the budget will soon be tabled, and we are committed to introducing the new Canada child benefit, which will be more generous and progressive and, according to the Library of Parliament, will lift 315,000 children out of poverty.

We are also committed to investing in social infrastructure, including affordable housing and social housing, to ensure that as many people as possible have quality of life and to reduce inequalities in Canada. That is my answer to my colleague.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I am very pleased to rise today in the House to talk about something that is particularly dear to my heart, and that is reducing inequalities. When it comes right down to it, that is what Bill C-2, an act to amend the Income Tax Act, is all about.

Obviously, I do not consider Bill C-2 to be the final destination. There will always be work to do when it comes to reducing inequalities, but this bill is a step in the right direction, a step that the government took at the earliest opportunity. This bill is a step in the right direction because it makes our income tax system more progressive by creating a new 33% tax bracket for incomes over $200,000, while lowering taxes for over nine million Canadians who earn less than $90,000.

As a forward-thinking individual, I cannot help but be pleased to see our tax system becoming more progressive through the creation of a new tax bracket under this bill. However, I am also pleased because this bill repeals what can only be described as a regressive measure implemented by the previous Conservative government that increased the maximum TFSA contribution from $5,500 to $10,000.

I do not expect members to take my word for it that this tax measure was regressive. You could listen to economist Rhys Kesselman, from Simon Fraser University, who helped lay the foundation for the introduction of the TFSA in 2009. This is what he had to say about the previous government's proposal to increase the TFSA limit to $2,000.

Before dropping the second shoe, the government should reconsider its pledge to initiate a tax change that would impose a fiscal straightjacket on future administrations that undercuts tax progressivity and increases income inequality.

There are two interesting concepts in this short quote from Mr. Kesselman, who, I remind members, is credited with helping to bring in the TFSA. An increase in contributions would have have imposed a fiscal straitjacket on future administrations, while undercutting tax progressivity and increasing inequality.

I will come back to the concept of a fiscal straitjacket, but first I want to look at how increasing the TFSA undermined our tax progressivity and drastically increased income inequality.

I have heard my Conservative colleagues on the other side say over and over, quite rightly, that 60% of TFSAs are held by individuals with incomes below $60,000. However, this statistic overlooks the fact that, often, the people who invest in a TFSA have a spouse with a substantially higher income. My Conservative colleagues should know that TFSA rules allow a spouse to contribute to both their own and their lower-income spouse's TFSA, up to a total of $11,000 under the former regime, before the Conservatives' increase.

In Kesselman's view, if you want to have a clearer picture, it is important to look at households, not at individuals. If you look at households, including single-person households, that contribute to TFSAs and have an income of less than $60,000, they represent 52% of TFSA holders, but they hold only 31% of all the money invested in TFSAs. In contrast, 4.4% of households that contribute to TFSAs and earn $200,000 or more hold 15% of all TFSA balances.

It should also be noted that the returns generated by families with the highest incomes are higher than those of other taxpayers, and on that particular issue, I would again like to quote Mr. Kesselman, who, I would remind the House, is the intellectual father of TFSAs in Canada:

Upper-income families enjoy TFSA tax savings to an even more unbalanced degree than those statistics might suggest: they typically generate higher investment returns on their TFSA assets than lower earners, and they avoid the higher personal tax rates that would otherwise apply on the income from assets shifted into their tax-free accounts.

Lastly, it is interesting to also note that, proportionally, not all Canadians contribute to their TFSAs equally. While only 29.2% of Canadians who earn under $50,000 contribute to their TFSA, 99% of Canadians who earn over $150,000 contribute.

It was not surprising, therefore, that the former parliamentary budget officer, Kevin Page, had something to say about the Conservatives' plan to increase the TFSA contribution limit. He wondered if it would really generate any savings for the middle class and low-income households. He pointed out that one would have to be pretty comfortable to be able to set aside $11,000 in a TFSA at the end of the year and that the priority should be investing in infrastructure, since the larger issue was growing the economy.

I could not agree more with Mr. Page, and clearly, Canadians agreed with him too. They chose growth and a more just and accountable society.

It should come as no surprise that when our American neighbours added TFSAs to their tax regime, they limited contributions to $5,500 and made TFSAs off limits to single individuals whose income exceeds $116,000 and households whose income exceeds $183,000.

Getting back to the concept of the fiscal straitjacket that Mr. Kesselman described, according the the parliamentary budget officer in a study published in February 2015, raising the TFSA limit would cost the federal government $14.7 billion a year in lost revenue by 2060. The provinces would lose $7.6 billion a year.

Interest rates are low, we need to stimulate the economy, and there is a pressing need to invest in our communities and our infrastructure, yet surreally, the Conservatives bemoan our government building up a deficit that will put future generations in debt while simultaneously tearing their hair out arguing in favour of maintaining an irresponsibly high TFSA contribution limit that will benefit only the wealthiest 10%, which would be an abdication of fiscal responsibility on the part of the government. It is utterly surreal.

I can understand why they are so attached to this policy. It was a hat trick for them. It was the triple crown. Not only did this irresponsible policy allow them to deprive the government of significant revenues, which then allowed them to justify its disengagement, but it also gave an undue and outrageous advantage to the wealthy, whose interests the Conservatives have always cared deeply about, as we know. That may be understandable, but it is not defensible.

Bill C-2 makes our tax system more progressive by a adding a tax bracket and giving back to nine million Canadians. It also undoes one of the previous government's most regressive and irresponsible policies. Overall, Bill C-2 is a step toward reducing inequality in Canada. At the beginning of my speech, I said that this issue is especially important to me. It may even be the reason I entered politics. It is important to me because I am seeing a worrisome trend in Canada. Since World War II, there has been a steady increase in worker productivity, but compensation has not kept pace. The gap between productivity and compensation keeps getting wider.

Since the 1980s, the disposable income of the top 1% of income earners has increased by 77%, while that of the 0.01% at the top of the pyramid has grown by 160%. During that same period, the other 90% have seen their incomes increase by only 19%.

In Canada, roughly 70% of all net worth belongs to 20% of the top income earners. Historically, economic growth is more robust when the trend leans toward income equality. From the 1950s until the 1970s, in developed countries, lower income inequality went hand in hand with high economic growth. The IMF was able to quantify the gains to be made by narrowing income gaps. I would like to share a quote:

If the income share of the top 20 percent increases by 1 percentage point, GDP growth is actually 0.08 percentage point lower in the following five years, suggesting that the benefits do not trickle down. Instead, a similar increase in the income share of the bottom 20 percent (the poor) is associated with 0.38 percentage point higher growth.

For all these reasons, I will enthusiastically support Bill C-2, because I believe that prosperity in Canada must be inclusive and that sustainable growth is inevitably dependent on equitable growth.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, perhaps members have seen the movie Groundhog Day. I started out my week by asking the member for Moose Jaw—Lake Centre—Lanigan a question about Bill C-2. I asked him whether he was concerned that a $10,000 contribution limit over time might allow the affluent to accumulate huge pools of tax-free investments. His response was that it was good to allow people to make contributions tax-free. However, there can be too much of a good thing.

In that spirit of Groundhog Day, I would like to ask the same question. At some point does the member for Moose Jaw—Lake Centre—Lanigan believe investment profits should be subject to tax?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure to respond to a question from a colleague and a good friend as well.

I do not have to remind my colleague of our previous government's record on reducing taxes. Over 140 taxes were reduced in our 9 years in government. We brought the tax regime for every Canadian down to the lowest level in 50 years.

However, the problem with Bill C-2, as I explained in my address, is that it does not just cut taxes for some Canadians. It would penalize every Canadian by not allowing them to max out their TFSAs to the levels that our government introduced. Everyone's contribution limits for TFSAs would be cut by $5,000. That is unacceptable and I certainly will not be supporting Bill C-2.

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.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure and an honour to participate in the debate on the government's Bill C-2, also known as the Liberal giveth and the Liberal taketh away bill, because that is exactly what the bill would do.

Bill C-2 would give some modest tax relief to some Canadians, but it would also take away from all Canadians the ability to contribute $5,000 more to their tax-free savings accounts. That is real money we are talking about here. For a young person perhaps just starting out, aged 25, that could be 45 years or more that he could be contributing an additional $5,000 to his tax-free savings account, but which would now be denied to him because of Bill C-2.

I will explain in greater detail what Bill C-2 would do.

For a Canadian earning between $45,000 and $100,000 a year, he or she would receive some modest tax relief. If a Canadian is earning less than $45,000, there is no tax relief. If a Canadian is earning more than $200,000, he or she will be paying more taxes rather than less. However, every single Canadian eligible to open up a TFSA, that is to say every Canadian of the age of 18 or over who has a valid social insurance number, has the opportunity to open a tax-free savings account.

A tax-free savings account is a relatively new savings vehicle introduced by our previous Conservative government several years ago. It has proved to be incredibly popular. To date, over 11 million Canadians have TFSAs, and that number is growing steadily and quickly day after day.

When we first introduced the TFSA, we set a contribution limit of $5,000. Again, that is to say that all Canadians who opened a TFSA could contribute $5,000 as a maximum each and every year. The money in that account, as it grew over the years, could be withdrawn at any time tax-free. It was so popular, in fact, that most Canadians felt it was a far better savings vehicle than the RRSPs themselves, because, as everyone knows, with RRSPs one gets a tax break when putting money in, but has to pay taxes when taking the money out. TFSAs are just the opposite. One can put after-tax money into an account, and in that account, whether one had stocks, bonds, mutual funds or any other investment, that money could grow tax-free during the life span it was in the TFSA, and when a Canadian took that money out, it could be taken out tax free.

What a wonderful vehicle for Canadians who wanted to save for the future. When someone is approaching retirement age, they are quite rightly concerned about their retirement years, their so-called golden years. Will they have enough money to sustain themselves comfortably in their retirement? The TFSA went a long way to ensuring that all Canadians could do exactly that. However, Bill C-2 would deny Canadians the ability to put an additional $5,000 into their account.

As I mentioned earlier, when we first opened the TFSAs, the contribution limit was $5,000. We increased that a few years later to $5,500, and then a few years after that we put the limit up to $10,500 a year. Out of the 11 million current TFSA holders, over two-thirds of those contribute the maximum, and of those maximum contributors, about 60% have modest to low incomes. Therefore, this was a great tax savings vehicle for all Canadians, particularly those of modest and middle incomes.

The argument presented by the government as to why it reduced the level from $10,500 to $5,500 is that this was a vehicle simply for the rich. However, the statistics prove that simply is not the case. I suspect that the real reason the Liberals have chosen to reduce the ability of Canadians to put an additional $5,000 into a tax-free savings account is simply that the current Liberal government needs more tax revenue.

Why does the government need more tax revenue? It is because the Liberals are going to be spending like drunken sailors, and we have already seen evidence of that. We know now that the first year's budget, which we will be seeing on March 22, is anticipated to come in at about a $30 billion deficit. Most bank economists and people who have been analyzing the promises made by this Liberal government are anticipating that this figure of a $30 billion deficit will grow over the years.

I know that the government's Keynesian theories about putting money into the economy to stimulate it and create jobs simply do not work. Keynesian theory has never worked and will not work today, but the reality is that because of the government's wild intent to go into deficit, all Canadians ultimately will have to pay the price. Why? It is because deficits in real terms are borrowed money. Borrowed money means that someone has to pay that money back. If it is not me, it will be my children and my grandchildren.

This is not new. This is something that the Liberals have done throughout the history of their years in government. This is in their political DNA. In fact, the majority of Canada's debt as we know it today was incurred by the current Prime Minister's father, Pierre Elliott Trudeau. Figures will show that in the last year of the former Trudeau's government, the Government of Canada was spending $1.03 for every $1 that it took in in revenue. It does not take an economist or a rocket scientist to figure out that a few years of that means that the tax load and tax burden on Canadians will have to increase, because there is no way any government can sustain that type of spending.

It seems that the apple has not fallen far from the tree, because this Prime Minister seems to be taking the same approach as his father, going into massive deficits when the government does not have to do so.

Keynesian theory is for when we are in a recession, and then, perhaps short-term stimulus spending or short-term deficits could create jobs and help the economy recover. That is only a theory, and as I mentioned earlier, I believe it has not been well thought out. It certainly has not been proven to be accurate in all of those jurisdictions worldwide that have attempted this type of economics, but one thing is certain, in a jurisdiction that is not in recession, the government should not put money into the economy as stimulus because it has no need to do so.

There is one way the government could get additional tax revenue without raising taxes, and that is to look for private sector investment, private sector projects that might be able to create jobs and create tax revenue for the government. There is such a project in front of the government today. It is called the energy east pipeline, a shovel-ready project that would create literally thousands of jobs and bring in billions of dollars of tax revenue to the government, and yet, what has the government done? Has it embraced the energy east pipeline project? No, it has not.

In fact, there are several members of the Liberal government, mainly sitting on the backbench, who have won seats in ridings from provinces that would most benefit from the energy east pipeline, including Alberta, Saskatchewan, and New Brunswick, yet not one member has stood up in this place and defended the the pipeline. Not one of those members has stood in this place and said, “I endorse energy east”. Quite frankly, that is shameful, because their home provinces know the benefits that the pipeline could bring to Alberta, Saskatchewan, and New Brunswick.

Quite frankly, that does not matter to the government. The government is anti-oil and anti-pipeline, as we have seen time and time again. Instead, it has penalized average working Canadians. It has penalized Canadians by not allowing them to put more money into a tax-free vehicle, and when I ask, when did it become a bad thing to allow Canadians to save more of their money tax free, I have an answer. It occurred on October 19 of last year, when the government decided to penalize hard-working Canadians and prevent them from saving their money tax free.

Bill C-2 is a bad bill, and I will vehemently oppose it, as everyone on this side of the House will as well.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for his question.

We support Bill C-2. Yes, it will have an impact, but we feel it should have gone much farther.

Let me go over the numbers. This measure will apply to incomes between $45,000 and $90,000 or more, but the gross income must be $51,000, which means there is no direct tax measure for two-thirds of taxpayers. This measure will do nothing for the least wealthy two-thirds of the population. The middle class will derive no direct benefit from this program.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, what I like best about Bill C-2 is the tax hike for the richest 1%. In my opinion, the income gap is too wide and that is the most glaring problem in our current capitalist society, together with the extreme pressure that our economic system is placing on the environment.

Over the past 30 or 40 years, income inequality has grown steadily and has now reached unacceptable levels. Paying a CEO ten times what his employees are paid can be justified. However, when the CEO is paid 200, 300, or even 400 times as much, that is a sign that there is something seriously wrong with our society, and that the state has failed to do one of its main jobs, namely to ensure an acceptable redistribution of wealth.

The government is sending a strong message with Bill C-2 and it is headed in the right direction. It has been a long time since Ottawa increased taxes for the rich. Lowering the TFSA limit is a measure in the same vein and I will applaud if it actually shows up in the budget.

On the other hand, my enthusiasm for the tax cut for the so-called middle class is somewhat lukewarm. In my opinion, it misses the mark. This tax cut will benefit the wealthiest one-third of taxpayers. People who earn an average or median income will not benefit at all. The government is saying that anyone who earns $45,000 or more will benefit. However, if gross income is used in the calculation, people actually have to earn $51,000 to save money on their taxes. The reason for this is that other tax deductions reduce the gross income to a net income of $45,000, which is taxable. As a result, a worker who earns $51,000 a year will not save any money on taxes under Bill C-2.

By way of example, I would like to inform the parliamentary secretary that 80% of the people in his region of Mauricie report an income of less than $50,000. Only 4% of the people in his region, including himself, will see their taxes reduced by the maximum amount. People who earn $52,000 will not even save $20 with this measure. It is far from a solution. Those who earn $100,000 a year will save $680, and those who earn a gross income of $240,000 will not have to pay a penny more in taxes.

In short, the tax transfer in Bill C-2 will help the rich save money on their taxes by making the richest 1% pay more. In other words, the Bentley owners will have to pay to help BMW owners. Bill C-2 will not help Focus, Civic, or Corolla owners and will do even less for Accent owners, even though they are the ones who need help the most.

Nevertheless, this bill sends a strong message to the richest 1%. This is a step in the right direction. The proposed change is obviously symbolic and is not enough to correct the inequalities that exist. We need to go further.

The government should also target the problem of tax avoidance and tax havens as a priority. While the middle class and the poor are struggling and coping with austerity policies, receiving fewer services, and paying more for existing services, white collar criminals are ducking their social obligations. What good is it to increase their taxes by 1% if they are diverting their income? The KPMG scandal is the most recent example of this. The issue of tax havens is the elephant in the room. Canada's has one of the worst records among OECD countries. It is time for that to change.

This government can take action right now to deal with Barbados because we moved a motion to deal with this very issue. Barbados is Canada's tax haven. That is where Canadian banks and financial institutions, as well as wealthy Canadians, send their money. We can tackle Barbados as a tax haven right now. We do not need agreement from other countries to take action. I hope this will be done. It is a matter of fairness and justice.

The government of the Quebec nation is currently looking at the issue of tax havens. It will quickly see that it has little latitude on this matter and that it is largely dependent on the decisions that are made and voted on here in Parliament.

Since Quebec is not a country, it is subject to the tax treaties and laws negotiated, voted on, and ratified by Ottawa.

Quebec suffers when this government gives amnesty to white collar criminals. Quebec suffers yet again when Ottawa allows banks to move money to their branches in Barbados.

This lax attitude causes serious shortfalls for Canada and also for Quebec. When white collar criminals shirk their responsibilities, the rest of the public loses services, pays more in taxes and fees, and sees its debt balloon. This must change. We must do much more than what is in Bill C-2.

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I explained that in my speech. I expressed a bit of frustration with the shortcomings of this legislation.

What we are seeing with Bill C-2 is a token response to the Liberal platform and to what Canadians saw. There was something in that platform that resonated with Canadians. That is why they were elected, the Liberals claim, so they should do something with it. It is a token response. As a matter of fact, it is insulting to people living in that median income range, because $600 can go a long way toward nutrition and bills.

Not providing that well-being for all Canadians puts a burden on all of us as a country. One would think the Liberals would want to maximize this tool. That is why it is a bit frustrating.

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

Mr. Speaker, I definitely agree that Bill C-2 would do nothing for seniors on a fixed income and those with lower wages who are counting on maybe CPP, OAS, and GIS to get through.

Does the member think a $600-a-year middle-class income tax break would really make a big difference to those making up to $200,000 a year?

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, it is a pleasure to speak to Bill C-2 today. I will begin by saying that, while the NDP members have issues with some elements of the bill, we are pleased to acknowledge that there are parts of the bill that we believe would be beneficial to Canadians. We have decided to support the bill going forward to committee, where some of these can be more meaningfully considered. There are some clarifications and some rationalizations that I am going to take advantage of during my time here today.

Let us talk about some of the more positive aspects of Bill C-2

Bill C-2 would include tangible measures to collect a fair tax from the rich. Specifically, it would increase, by 4%, the top income tax rate on incomes over $200,000.

As the hon. member for Regina—Lewvan pointed out when the bill was first debated, this increase is entirely consistent with what the NDP has achieved at the provincial level.

In Nova Scotia, the NDP government increased, by 4%, the top rate on incomes over $150,000.

In a minority legislature in Ontario, the NDP amended a budget to add two points of income tax on incomes over $500,000.

The NDP government in Alberta has, quite correctly, gone from a flat tax to a progressive income tax system.

As part of our election platform in Saskatchewan, the NDP is proposing an additional percentage point of tax on incomes over $175,000.

The other positive aspect of this legislation is to restore the TFSA contribution limit to $5,500 per year. I think it is important to note that the previous Conservative government's proposal to increase that limit to $10,000 would only affect people who have extra money left over after 18% of their income has been contributed to RRSPs and after the $5,500 that can still be contributed to the TFSAs.

In 2013, fewer than 7% of eligible Canadians made the maximum TFSA contribution. It stands to reason that probably only up to 7% of Canadians would stand to gain anything from a higher limit on TFSA contributions. Therefore, restoring that limit to $5,500 is clearly a progressive move.

Let us face it. Given the unemployment rate, the skyrocketing cost of food and rent or housing, and the rising precariat, there are far too many people who will not see benefit from the bill. Consider a family of four living off minimum wage with a total monthly income, including benefits and credits, of $2,882. By the way, I get this information from the local Windsor anti-poverty organization, Pathway to Potential. Of this fixed monthly income, 62% goes to rent and food, leaving only $1,082.70 for remaining expenses, such as utilities, phone, transportation, medical costs, and dental costs. People face precarious situations when their rent exceeds 30% of their monthly income. When income is low and rent is high, there is not enough money left for food. This helps explain why so many are forced to use food banks. In 2015, 80,865 individuals were served by Windsor and Essex County food banks, and 41,942 of this number were children.

I think it is safe to say that, when we have a situation this urgent, this dire, we should be drafting legislation to help these people. Yet, these are precisely the ones who are left out of the bill. When families must choose between paying rent and feeding their children, they are not going to have a spare $10,000 to hide away in a tax-free savings account.

Let us consider students. In the Windsor area, we have St. Clair College and the University of Windsor. The reality is that most people who go to school are just getting by or taking out loans to get by, let alone putting money in a tax-free savings account. Perhaps some of them are doing so with the help of family members, but the ordinary Canadians I represent do not have that luxury.

As I alluded to earlier, in the service sector, many people are moving to part-time or precarious work and basically just getting by.

Unfortunately, with this bill, we know from third-party experts and economists that 60% of this plan for a reduction in taxes for Canadians would not be enjoyed by the middle class or those with low incomes. Therefore, it is a sizeable section of Canadians who would be left out. Because of the way the scheme works, the wealthiest would benefit the most. That is a real problem, which New Democrats want to address at committee. It is an issue we have raised before.

Who would benefit from this bill? It would not be the office workers who are making an annual salary of less than $40,000 a year, or the hair stylists who basically earn around $28,000 annually in Canada. They would get zero. It is the same with social workers who make an annual salary totalling around $44,000, and with our friends in the retail sector who earn $21,424 on average.

Cashiers would get nothing back. That is a classic example. All of the people working in department stores, retail shops, drive-throughs, fast-food chains, and all of these types of businesses would receive zero from the plan. They are the people we should be rewarding with a tax reduction. These are the people who do not have the equity to easily afford some of the tax deductions that wealthier Canadians get. They do not earn income at the level to take advantage of some of the policies that have been put in place in the past couple of decades.

Waiters and waitresses earn less than $22,000 on average. They would get zero. That is another group of individuals who, I would argue, would not benefit from this reduction. They would get nothing at all. Nannies are another example. Chefs and assistant chefs would get nothing.

Who would get a benefit from this legislation? Bank managers who earn around $82,000 a year would receive $555 in their tax season from this. They would also be in an income stream where they might be able to take advantage of tax-free savings account. It would be beneficial for them and their family. Lawyers earning around $108,000 a year on average in Canada would get $679. Members of Parliament with the same wage amount would get the cap of around $680 as well.

It gets worse. Bill C-2 also includes a so-called middle-class tax cut that would not actually help the middle class. I think the Liberals might be a bit confused between cutting the middle-class tax bracket and changing taxes in such a way as to help people with middle incomes. What the bill proposes is a tax cut that applies to incomes above $45,000 a year, which is more than the median Canadian income. To receive the maximum benefit, someone would need to have an income of more than $90,000 per year. To put that into perspective, someone working as a nanny for the Prime Minister would receive nothing from the middle-class tax cut. However, the Prime Minister himself, and indeed all members in this House, would get the maximum benefit of about $700. However, we do not need the money.

What are the alternatives? We in the NDP have proposed to reduce the first tax bracket, which applies to everyone. We also propose a boost to the working income tax benefit, which is better targeted to lower incomes. It would be extremely easy to design and implement a middle-class tax cut that would actually go to the middle class. However, in all of the discussion we have heard with respect to this bill, I have not heard a coherent explanation from the Liberals as to why they are pushing ahead with a tax cut that would only go to incomes above $45,000, rather than enacting a tax cut that would include all taxpayers.

Moreover, it has been revealed that the bill would not pay for itself. It would cost more than $1 billion a year in lost federal revenue. In effect, what the government is proposing is to borrow money to fund a tax break for people who do not really need it.

In conclusion, there are a enough positive elements in Bill C-2 that the NDP is prepared to support it on second reading. However, there is a huge amount of room for improvement in targeting the so-called middle-class tax cut to those who really need it, and in collecting the revenue that would ultimately be needed if the government is ever going to balance the budget—

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I am rising for two reasons. The first is personal, and the second is to talk about Bill C-2

I would like to inform the House that this morning, my wife and I became new grandparents. Our first grandchild was born, and we are so proud. My daughter, Chantal, and her husband, Mathieu Hayley, are the proud parents of a beautiful little girl named Maëlle.

Mr. Speaker, I am extremely proud and happy to rise on Bill C-2, the law that talks about benefits for the middle class. That is what was so important about our election campaign. This was a promise that we made throughout our campaign platform, and this will make good on it.

I was very happy to hear our Prime Minister indicate that this would be the first priority of our government in this 42nd Parliament. This was a platform promise that we felt was essential because over the last 10 years the middle class has been struggling. That has been extremely difficult for many people across Canada, in many communities.

This idea is not something that came from within. This is something we heard throughout the campaign, because we were listening to and consulting with Canadians during door-to-door visits. We heard clearly that the middle class were in need of some type of tax relief for them, as they were struggling. Many people were telling me that they were working extremely hard and yet did not seem to be getting ahead because the cost of living was rising, because of the challenges of paying for personal family needs, for day care, etc. After 10 years of what I would call a low-growth economy, Canadians were looking for real change.

Our Minister of Finance has been hard at work as well, consulting with Canadians for the upcoming budget. He has consulted from coast to coast to coast. He was in Nova Scotia and had great attendance by youth at the university, and as well at the chamber of commerce. This allowed many Canadians to be engaged in this process of sharing some innovative and creative ideas. This is another sign of what I call a government that is open, transparent, and accessible. Our minister displayed that throughout that process, and I am very pleased with that.

The reality is that people have to pay the mortgage, as well as for groceries and other essentials, like child care and so on. It is very difficult for the middle class. This formula is not good for the economy, that is for sure. The bill we are debating today will allow us to shift the tax burden, so that those who have a little more will get a little less and those who have a little less will get a little more.

In my riding, over 30% of the citizens will gain from this tax reduction. Over nine million Canadians will also be taking advantage of this tax reduction. This means that a family of four will have about $540 more in their pockets for spending on things that are essential for the family.

It is also important to note that this is only part of the plan. Our plan is much more horizontal, if you will; in other words, many other initiatives that were set out in our platform will be rolled out over the next four years. What we want is to support the middle class. Our government will also be investing in infrastructure and transportation, which is absolutely crucial to stimulating the economy.

In my riding, which is Sackville—Preston—Chezzetcook, public transit and transportation are extremely important. One has to understand that there are both urban and rural parts of my riding, and I am working closely with my colleague from Dartmouth—Cole Harbour on the construction of the long-awaited Sackville-Burnside expressway. It is essential and must move forward as soon as possible.

In addition, our government is committed to creating a Canada child benefit. This will help families with day care, a fairer system, one that would see Canadians who have a little more get a little less, and those who have less getting more. That is a fairer system. There are nine out of ten Canadians who would benefit from this. Over 315,000 children will be pulled out of poverty. That is the type of plan that will be effective for Canadians. That means about $2,500 more per year for families, tax free. Add that to the $540, and it is over $3,000 per year per family. That is a very important aspect of taxes for Canadians. There will be more money in their pockets.

Our government has focused on fairness. We want to support the middle class by ensuring they have money in their pockets and that they are able to prosper.

I would like to make one final point regarding Bill C-2. We made some changes to tax-free savings accounts. The Conservatives had increased the contribution limit to $10,000. We dropped it back down to $5,500, given that 93% of Canadians were not taking advantage of the increase, because they could not afford to. The only people who will not benefit from this measure are the wealthy, not the middle class. In fact, the $10,000 limit was giving more money to those who already had the most, and the Canadian government was having to pay millions of dollars more over five years, and billions more in the long term. This will mean less spending, but it will go to those who need it most.

For the last 10 years, like I said, the middle class has been ignored. This government is putting the middle class at the forefront. This government will ensure that our policies reflect what is important for middle-class Canadians.

The House resumed from March 8 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.

Business of the House

[Dominic LeBlanc, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, perhaps there might be consent for me to table this very incisive statement that members are about to hear.

Today, we will continue our second reading debate of Bill C-6 on citizenship. Tomorrow, we will continue to discuss Bill C-2 on the middle-class tax cut. There have been discussions among several members, and I believe we will be able to conclude second reading debate tomorrow. Next week, as my colleague mentioned, we will be working very hard in our constituencies.

Monday, March 21 will be the final opposition day in this supply cycle.

On Tuesday, we will take up debate again on Bill C-6, until 4 p.m. I know that members on all sides are looking forward with great enthusiasm to the Minister of Finance presenting his budget at that time.

On Wednesday and Thursday of the week we are back, the House will have the two first days of the budget debate.

Finally, on a serious note, there have been discussions among the parties, and I believe if you seek it you will find unanimous consent for the following motion. I move:

That, notwithstanding any standing order or usual practice of the House, one minister of the Crown be permitted to make a statement pursuant to Standing Order 31 on Friday, March 11, 2016.

The House resumed from March 7 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.

Income Tax Act

[Dave MacKenzie, Conservative, Oxford, ON]

Mr. Speaker, this is an interesting time, when we talk about Bill C-2. I come from a very strong rural riding, but it is also a riding that is one of the few in Canada that has two auto plants not related to each other. Therefore, I have a broad cross-section of Canadians. When people ask what is middle income, nobody seems to know, but one consensus is that it is always somebody who makes $10,000 more than I do. The difficulty, when we start to talk about what we are doing for middle-income people, is that there is no real definition of it.

We talk about what the Conservative Party did, and I think you, Mr. Speaker, might have been here when we reduced the HST from 7% to 6% to 5%. I think members would agree that everybody benefited from that.

This change being brought forward was be revenue neutral. Revenue neutral would mean that they would take from Peter and give to Paul, but it would not cost Mary anything in the middle. As it turns out, the Liberals abandoned the promise and according to the PBO, Bill C-2's changes would cost Canadians $8.9 billion over the next six years.

I think members recognize that when governments accumulate debt, and when we are in a position that we are in now when the economy is not that bad—it is fragile but it is still growing—it does not mean we will pay it. It is not like a mortgage when we buy a house and intend to pay it off in a certain length of time. Government debt always ends up being paid by the next generation or generations. When I look at it, I recognize that we are putting this debt not only on my grandchildren but on their heirs. The debts that we build up in our time here are very important.

By taking the debt and doing what they would do for a small benefit to some people, and it would be so small that they would not be able to retain it, the Liberals have not shown us what the real advantage would be to the economy, other than we know we would add $8.9 billion to debt. This does not make sense.

Those good people in Oxford who are the farm people, the people who work in the auto assembly plants, the firemen, the policemen and the teachers, are they the middle-class people? I do not know, but they are concerned that these debts will be added on to their children and grandchildren. We need some transparency that goes along with this.

When we said that we would reduce the HST from 7% to 6% to 5%, everybody knew what that meant. It meant that everybody was going to save on their tax dollars. We recognized that tax dollars were not for the government; they were for the people. It is not for the government to decide that the tax money should be taken from pockets of people' and to spend it willy-nilly. It is to do things for the government.

Unfortunately, in this case, we are past that point. We are looking at adding billions of dollars, and I am not sure whether anybody has calculated exactly what that will be. Some economists have said it will be $150 billion over the Liberals' term in office. That is a lot of money.

We just went through the worst downturn in the Canadian economy since the Great Depression, and we know that cost money. The deficit went up and the debt went up. However, we handed over a surplus. We should be looking at starting to pay it down, as we did in our first three years in government. Canadians are starting to see the sunny ways turn into dark cloudy days, and we are handing that big debt to our children to pay.

The tax-free savings account is one area that has been focused on a great deal. I know, when I talk to people in my riding about the tax-free savings account, they see no benefit in reducing the contribution limit. We have not heard why it is so important to reduce the contribution limit, other than if the Conservatives did it, it must be bad so we will go back to where it was. I hear from young people who say that they want to save that money to buy a house. There is a difference between RRSPs and tax-free savings accounts. When people want to buy a home out of an RRSP, it just means they have another debt. They can take their money out, but it has to be paid back or they have to pay the tax on it.

These young people, who are smart enough, and there are many of them, recognize that they can put the money into a tax-free savings account. It will not grow by leaps and bounds, but it will grow. They can take the money out to purchase a home. They do not have to put the money back in, but they do have an opportunity to put that same amount back into the tax-free savings account. It is a totally different scenario, so many are looking at that.

Many middle-aged people are looking at the TFSA as an opportunity to build for their retirement. They are not anxious to take part in the new scheme in Ontario, for instance. The Ontario government wants to have its own pension plan, something like the CPP, but we do not know exactly what it is. These middle-aged people are not interested in that. They want to save for themselves, to put that money away for when they retire.

To think that it would make sense to cut back the TFSA is illogical. It does not cost anything. The government's losses in revenues from that would be minimal. It is just a slap in the face of those people who felt the need to put the money away.

As we know, the vast majority of people who put their money in a tax-free savings account would perhaps be deemed to be in the lower half of the income brackets. They are not high-income people. This is a penalty on people who can least afford it, people who would like to save for their future, who do not want to be part of a nanny state. They want their own money they have saved for their retirement. In many cases, it also includes young people who want to save for their education or to go back to school. They may want to buy a house or a car. They may want to start a business.

Therefore, when we look at it, we wonder why the government would want to cut this back. What is the harm in leaving it where it is? It is a big harm to the people who wish to save, but no harm to the coffers of the federal government.

To turn around and have the tax break we are talking about today, which we know will be minimal—I heard a number today of $1 a day—what is the benefit in that? One cannot even buy a coffee with that, although there is one chain that is giving away free coffee now, but it is rather difficult to see how that $1 or $2 a day would make a great deal of difference to the average Canadian. It is different from when the HST was reduced. We knew what it would do for the auto industry, the recreational industry, and the equipment industry, all of those.

We have not heard what this is going to do. No one can say “We'll see an increase in productivity”, or “We'll see an increase in opportunities for manufacturers.” It just is not there.

However, what we do know from the PBO, and I am sure everyone on that side agrees with the PBO now, is that it will cost $8.9 billion over the next six years. That is just a number that gets added to the growing deficit that we hear about.

We heard during the election campaign that we would have a $10 billion deficit. That $10 billion deficit was one of the 300 promises made. Now that $10 billion deficit seems to have grown to $30 billion. When we put $30 billion here and there, I know it is just a number and that budgets will balance themselves eventually, but somehow they get balanced by our young people, our families, our grandchildren. It is just not fair that we push this on to them. We have been doing it for far too long as a nation and a province.

I am from the province of Ontario, so when we put our debt here, along with the Province of Ontario's debt, we can just imagine the kind of money that our young people will have fished out of their pockets to pay for what we have not paid for. It just does not make sense in the big picture of society.

I am really puzzled as to why we would want to support taking away just one little thing, the tax-free savings account. It just does not make any sense.

I can see, Mr. Speaker, that you are getting anxious to stand up, so I do not want to take away your time when you stand up and tell us we are finished.

I know that on this side, we do not understand why the government would deny people the opportunity to save their own money. That is really what it is: they are saving their own money.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I rise in the House today to discuss Bill C-2, an act to amend the Income Tax or, as I like to call it, the Liberals' tax cut in name only.

There are many things to be said about this bill. For starters, the tax cut, while sounding good in a press release, is nothing more than a PR ploy. I want to first note the fact that this tax break is another in a string of broken promises by the Liberals. I recall the warm summer months, and I do recall the warmth fondly being here, and the beginning of a long and growing election. One of the promises made by the government was that the new tax plan, a plan that would cut taxes for the middle class, would be made revenue neutral through a tax hike on the wealthy. The wealthy were defined as those who make $200,000 or more. However, surprise, the tax plan is not revenue neutral, and in fact will cost Canadian taxpayers well over $1 billion per year, year after year.

The finance minister himself conceded that the plan will leave a staggering $1-billion annual hole behind, and this is from the head of the government's finance department. Further, a report from the parliamentary budget officer estimates the cost to be close to $1.7 billion per year, adding almost $9 billion in debt over the next six years. This broken promise proves that the government's plan was grossly miscalculated. It is clear that for the Liberals, numbers are a challenging thing to deal with.

This tax plan would completely eliminate the $1 billion surplus that the previous Conservative government left behind, as confirmed by the “Fiscal Monitor” in Finance Canada. I would normally favour tax cuts, but what Canadians are getting is a future tax hike. It is a tax cut being paid for by deficit spending. By borrowing more money to pay for this tax cut, the government is slightly reducing what individual taxpayers are paying now, in exchange for a future hike in taxes. This hike in taxes will surpass the small decrease they are receiving now. It is akin to taking out a bank loan and thinking that the money is an increase in income. It is not. Interest payments on the money borrowed to finance a $9-billion deficit over the next six years will add millions upon millions of extra dollars to what the government owes, which in turn means more money that the taxpayer will be forced to pay.

This tax cut simply does not make sense. Why pay a little less now for a larger tax hike later? In the world of the Liberals, we do so because it makes the government look good. It makes it look like it is saving Canadians money, when in reality it is sticking it to future taxpayers. This so-called middle-class tax cut amounts to savings of mere pennies a day at the lower end of the income scale, rising up to a whole $3 a day of savings at the top end.

What would it offer those making below $45,000 a year? It will offer nothing. There are 17-million Canadian taxpayers who make less than $45,000 a year and will receive absolutely nothing from this tax cut. Sixty-six per cent of all Canadian tax filers will get nothing from this tax cut. There are 338 members of Parliament in the House who will benefit from this tax cut, but not those below $45,000 a year. It is not often that I agree with my NDP colleagues, but, like them, I question how the Liberal government could overlook 66% of Canadians who make less than $45,000 a year and will receive nothing but higher debt from this tax cut. This is not a middle-class tax cut paid for by the 1%. It is simply cynical Liberal rhetoric used solely for election purposes.

It is not just the fact that this tax cut is nothing but a phony one; it includes much more than that. This bill would effectively slash the savings vehicle that gives those with low to medium-income levels a chance to get ahead. The bill would slash the tax-free savings account from $10,000 to $5,500. We Conservatives understand the importance of saving and investing. Frankly, our tax system is often a disincentive to the lower middle-class income earners when it comes to saving. The tax code would treat interest and income from savings as yet another lucrative pool of money that the government could get its hands on.

The TFSA limit at $5,500 a year and then at $10,000 a year was fair. It allowed for both lower and middle-class income earners to save without worrying that the gains made from interest or rising stock values would be washed away by taxes. Doubling the TFSA was a chance for those at the bottom of the economic rungs to climb up. However, never let a good program that benefits Canadians get in the way of the Liberals' chance to play politics for their own gain.

Let me quote from the Liberal website, which is still up, about TFSA. It states that TFSAs are “tax breaks for the wealthy — like the doubling of the TFSA limit, which does nothing for the middle class.” Yet, 73% of those who maxed out their TFSAs in 2013-14 were making less than $80,000 per year. Sixty per cent of those who maxed out their TFSAs made less than $60,000 per year.

What about those horrid one-percenters who the Liberals claim were the biggest benefactors of the TFSAs? Just 5% who maxed out their TFSAs were from this despicable 1%.

The government is trying to change the ability of Canadians to save for their future. Through Bill C-2, Liberals are now saying that those in the middle class should in fact pay more taxes on the money that they save. Rather than giving low- and middle-class income earners the freedom to save up to $10,000 a year, Liberals are saying that $5,500 is a proper amount. If one is able to save more, then clearly one is rich enough to pay more taxes, yet 60% of Canadians who maxed out their TFSAs make less than $60,000 a year. Still they are told it is a tax break for the wealthy, so they are not allowed to save more, tax free.

This has affected many Canadians who have come to rely on these savings accounts in planning for their future: students saving for higher education; families saving to start a family or for a down payment on a house; entrepreneurs saving for a business; parents saving for their children; and, more importantly, seniors saving to stretch their savings into retirement. These changes will make life less affordable for these Canadians who are trying to save for their vulnerable years. This will be the Liberal legacy: taking away opportunity for wealth generation for Canadians.

The bill embodies the Liberal ideology of higher taxes, higher debt, and higher deficits. It highlights the financial illiteracy of the current government. To Liberals, debt and deficit are great things. Taxing people more is a great thing. This is in stark contrast to what our previous Conservative government did.

Under our leadership, Canada was prosperous, with the wealthiest middle class in the world. Canada was an island of stability in a turbulent world. We had a proud legacy of tax fairness and cutting taxes. When in office, our Conservative government reduced taxes more than 140 times, bringing the federal tax burden to the lowest level it has been in 50 years. To put it in perspective, the Maple Leafs were still winning Stanley Cups the last time the tax burden was this low. We did this through measures that were targeted and responsible. We did it while ensuring that when taxes were cut, they were cut for good. It is not like what the current Liberal government is doing, which is cutting today with more to pay in the future.

All in all, the bill is simply irresponsible. It would put an even bigger hole in our budget, pile on more debt for future generations, and cost Canadians more in the long run. It would also take away the economic freedom of Canadians to be able to save and invest in their already taxed hard-earned money, tax free.

It is for these reasons I will not be voting in favour of the bill.

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

Mr. Speaker, a few phrases come to my mind, and one of them is “You have to be kidding.”

It was just a couple of weeks ago that I was at a local restaurant, and someone said to me that the new Prime Minister, in his first 100 days, has accomplished more toward making our society a better place to live than the previous prime minister did in his entire 10 years. I do not know where the member gets off with the comments that he is making.

Let me ask the member a question. We talked about an election platform. He seemed to be focused on that. Let us take a look at what Bill C-2 does. It fulfills a major party platform. It will in fact give money to Canada's middle class. This bill is a promise kept. That is something that was promised in the platform. It said that we were going to give an increase to Canada's wealthiest, that 1%. Again, it is a promise that is being kept.

Let us not give up hope. There is more coming on March 22. It is going to give that much more in terms of Canada's middle class and those aspiring to be a part of the middle class, through the Canada child benefit program. We have seen the greatest redistribution of income inequality in trying to address that issue in the last 120-plus days.

Let us be a little more patient. There is a lot more to come. Would the member not recognize, at the very least, that the government has done more for the Canadian middle class than the previous government did in the previous 10 years?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I want to begin my remarks today with a point of refutation, because in listening to the debate we have heard some discussion around inequality in Canada, with the member for Saanich—Gulf Islands using the phrase a “crisis in Canada with inequality”. We need to review the record with respect to inequality. Frankly, this bill is going in the wrong direction.

However, over the last 10 years as a government we had a really positive record addressing inequality, as the numbers clearly show. As I have mentioned before, at the beginning of our mandate we lowered the GST, which is the tax that all Canadians pay. We also cut the lowest marginal tax rate. This is a very different approach from that of the current government.

In my view, the best way to measure inequality is through something called “intergenerational earnings elasticity”, which is the ability of people to move between different income brackets across generations. In other words, what are someone's chances of being a wealthier person even if he or she had relatively lower income parents and vice versa?

I will refer members to a paper written by Miles Corak from the University of Ottawa. If we look at the data on intergenerational earnings elasticity, the numbers are clear that Canada is near the top when it comes to equality. In terms of intergenerational earnings elasticity, Canada gets a score of 0.19, where low is good. We are fourth in the world. We are far ahead of the United Kingdom, France, Italy, and countries with a very different social system. We are also ahead of the United States. Therefore, we have a combination of factors in Canada that is good for equality. I would argue that it is a combination of certain necessary social programs in areas like education and health care but also of economic opportunity, and what we have had historically over the last 10 years with limited but effective regulation of business and low business taxes. This environment has been good for equality. It is one thing for members to throw out phrases like “crisis in Canada with inequality”, but if we look at the data specifically I would argue that with respect to intergenerational earnings elasticity, we see that Canada is in a very good spot right now.

Nonetheless, I would argue, and here I agree with our colleagues in the NDP, that this bill does not move in the right direction with respect to inequality because it cuts taxes in certain categories but not in others. Many low- and moderate-income Canadians would not benefit at all.

I am concerned about this bill because we might call this a Liberal promise-wrecking ball. It is a bill that breaks through what were clear election commitments by the Liberal Party. The Liberal Party committed in two key categories when it comes to fiscal measures. It promised to run three modest deficits of $10 billion, balance the budget after that, and ensure that all tax changes were revenue-neutral. It also promised to cut taxes for, in their words, the “middle class, or [those] hoping to join it”, and to pay for those tax cuts with tax increases on higher-income earning Canadians. We see very clearly that this bill makes utter nonsense of these two commitments.

In terms of the Liberals' commitment to run only three modest deficits of $10 billion, balance the budget after that, and ensure all tax changes are revenue neutral, we know that the deficits have ballooned significantly since the election, and that even before new spending is promised, we will be running an $18.4 billion deficit in fiscal year 2016-17 and a $15.5 billion deficit in 2017-18. That is again before new spending.

The Minister of Finance had this to say about that:

A less ambitious government might see these conditions as a reason to hide, to make cuts or to be overly cautious. But our government might see that the economic downturn makes our plan to grow the economy even more relevant than it was a few short months ago.

I will say it is a rather strange definition of “ambitious” to leave the cupboard bare for the next generation. Let us define our ambition by how much we leave for the next generation, not how little we leave for it.

The Prime Minister has said that Canada has room to run these massive new deficits because of our relatively low debt-to-GDP ratio at the federal level. It is true that our government left Canada with a low debt-to-GDP ratio. In fact, we left a reduced debt-to-GDP ratio compared to when we first took office. However, the combined federal, provincial, and municipal debt-to-GDP ratio is alarmingly high. It is over 90%. It is in the same ballpark as the debt-to-GDP ratio of the U.S. and the U.K., if we combine federal, provincial, and municipal debt.

We actually do not have room at all to run these massive new reckless deficits. Of course, this large debt-to-GDP ratio is led by the very large deficit and debt here in the province of Ontario. The policies of the Kathleen Wynne government, which I think unfortunately the current government wishes to emulate, have made Ontario the most indebted sub-sovereign borrower on earth. We cannot go in that direction at the federal level as well. We are already significantly weighed down by that combination of federal, provincial, and municipal debt.

Bill C-2 makes tax changes that will have a significant cost to our treasury. By ignoring the value of tax-free savings accounts, they will also have a significant cost to our economy. This bill would cut tax-free savings accounts and lower some taxes while raising others, but it is not revenue neutral. According to the parliamentary budget officer, it would cost the treasury $1.7 billion per year. It is clear that the current government is not sticking to its $10 billion per year deficit commitment. The Liberals have no serious plan to balance the budget in year four. Their tax changes would not be revenue neutral, and estimates are that they will increase instead of lowering the debt-to-GDP ratio. Over the next four years, it is projected that the Liberals will increase the debt more than we did in 10 years. They will increase the debt-to-GDP ratio. They will do it, not because of a financial crisis, but because they have no regard for the importance of planning for the next generation. They are spending today with no regard for the future at all, and, again, certainly making nonsense of their initial budget commitment.

The Liberals said as well that they would cut taxes for the middle class and those hoping to join it. The details do not measure up to that commitment at all. Their proposal is a modest tax reduction for those making between $45,000 a year and $90,000 a year. Individuals making less than $45,000 will get nothing. Families with a combined income approaching $90,000 a year will perhaps get nothing. Whether those people consider themselves middle class or those hoping to join it, they in fact would lose because of the proposed changes. Even individuals at the low end of that tax bracket may be worse off because of the other changes that the current government would bring in with respect to tax-free savings accounts.

Those who will benefit most, as has been pointed out, would be those making over $90,000 per year, perhaps families with a combined income approaching $200,000 a year. That is the reality of these changes. As a member of Parliament, I know I make a good salary, and my wife, as a part-time physician, does as well. With two incomes, each individually less than $200,000 a year, we are in the group that would benefit the most from these proposed changes. However, the fact is that members of Parliament and senators do not need tax cuts. Canadians do—hard-working, middle-class Canadians—and those who are hoping to join it. The rhetoric does not match the reality in this bill, at all. Instead, what the Liberals will do by reducing tax-free savings account limits is to hurt those Canadians who need the help the most.

Here are the real numbers on tax-free savings accounts. Over 65% of tax-free savings account holders make less than $60,000 a year. Almost half of TFSA holders make less than $40,000 a year. Over half of those who currently max out their TFSAs make less than $60,000 per year. The Liberals somehow behave as if those making over $90,000 a year count as middle class for the purposes of their rate cut, but those making less than $60,000 a year for the purposes of tax-free savings accounts count as wealthy. This is a clear paradox in their plan. Why would they cut benefits for those who make less than $60,000, while increasing benefits for those who make more than $90,000 a year?

Again, this bill will drive a stake through the Liberals' election commitments. They promised to run three modest deficits of $10 billion, balance the budget after that, and ensure that tax changes are revenue neutral. That was and is nonsense. They promised to cut taxes for, in their words, the middle class and those hoping to join it, and to pay for those tax cuts with tax increases on higher-income Canadian. Again, if we look at the numbers, clearly this is total nonsense.

Those of us who are on the Conservative side of the House, and even our colleagues in the NDP, have convictions. We stick to them and we try to advance them. However, it is clear that the current Liberal government already has no regard for its platform. The Liberals have broken more promises in a mere four months than we did in 10 years. Shame on them for that.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Mr. Speaker, I would like to thank my seatmate for his elucidation on sunny ways.

The comment I want to make to him, notwithstanding the ridiculous question posed by the member from the Liberal Party, is this. Anyone who is a financial advisor or understands financial investment and personal income security would understand that anyone earning less than $40,000 a year currently has no or little-realized benefit from putting their money into an RRSP. That money is better put into a tax-free savings account until the income earner is in an income bracket where it makes more sense for them to put their money into an RRSP.

If we do the math and apply it, if an individual Canadian earning less than $40,000 a year who can save or put, say, $5,000, $6,000, or $7,000 a year into an RRSP were instead to put it into a TFSA—whose extra capacity they will lose under Bill C-2—they would be able to further advance their own income security and income for retirement. By maximizing their contributions to the tax-free savings account early in their careers and then when they become seniors and need to take money out of their RRSPs or their locked-in retirement accounts at the other end, they are taking advantage of the most important financial vehicle that has ever been brought in by a government. The fact that this has been undermined and political games have been played with it is astounding.

Could my colleague talk to the importance of Canadians who can look after themselves and are able to do so with vehicles like a tax-free savings account?

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, it is a great pleasure to rise in the House today to speak to Bill C-2.

I realize that we are near the end of the debate and the vote is coming tonight. Oftentimes when we prepare for these types of things, a lot of what we want to say has already been said. We have heard some good arguments from both sides of the House, but I happen to think that the arguments from this side have been more persuasive.

I have tried to break this issue down to its simplest form, and its simplest form is this. If I were standing in a Tim Hortons in Stroud or Alcona or if I were at Big Bay Point or in Huronia, in Barrie, how would I explain Bill C-2 to the residents of my riding? I would simply start by saying that it is a shell game. I have often used the term “liberalnomics”. If one were to define “liberalnomics”, it would be accurately reflected as a fiscal policy of saying that things will add up when they do not; a fiscal policy that equates to playing pin the tail on the donkey in the dark, where a government keeps missing its targets; and a fiscal policy in which, if government members made decisions using their own money, they certainly would not make the same types of decisions they are making, including those that appear in Bill C-2.

Who is going to pay for this? That is the question we need to ask. The Liberals said they were going to give middle class Canadians a tax break by making taxes fairer. They said they would cut the middle-class tax bracket to 20.5%, and they certainly have done that. However, they also said that this plan would be revenue neutral. All of the speeches that have been presented by members on our side, even information that has been presented to us by the parliamentary budget officer, have indicated that a $1.7 billion deficit will be created by this plan this year and effectively an $8.9 billion deficit over six years. This plan would benefit the top 30% of wage earners. How would I explain this to the people of my riding if I were standing in Tim Hortons?

This may not be a great example for this side to use, but it is an example nonetheless and it comes from Mr. David Macdonald, who is senior economist with the Canadian Centre for Policy Alternatives. In an article in Maclean's magazine Mr. Macdonald, through a study, said that 1.6 million families making $48,000 to $62,000 a year would see roughly $51 a year in tax savings; and for those families making $62,000 to $78,000 a year, they would be making $117 in tax savings. I would define those figures as the middle class, and Mr. Macdonald did as well.

Then Mr. Macdonald moved into an interesting category that he defined as the upper middle class, and I think most of us would agree with his definition. Those Canadians who make $124,000 to $166,000 a year would see a benefit of this middle-class tax decrease of about $521 a year, while those making $166,000 to $211,000 would see a tax saving of $813 a year.

How would I explain that to my residents if I were standing in Tim Hortons? I would simply say to them that this middle-class tax decrease would benefit every single member of the House of Commons more than it would affect those who need it the most.

We have heard the finance minister stand up many times in the House during question period and say that nine million Canadians are going to benefit from this. If the parliamentary budget officer's estimates are correct—and there is no reason to think that anyone in the House would discount them—that means for those nine million Canadians, the amount of deficit that they would have to pay is equal to about $164 each. If I were to explain to my residents in Barrie—Innisfil, with an average median household income of $69,000 in Barrie and $66,000 in Innisfil, that the maximum amount they would get as a result of this middle-class decrease would be $51 but the expectation would be that they would have to pay $164 for the amount of this deficit, not one of them would think this is a good deal.

Yet the Canadian government is running around, because of this election promise, saying that nine million Canadians will actually benefit from it, when in fact, every member of the House knows that it is Canadians who pay the price.

Based on Finance Canada's estimates, the new Liberal tax plan amounts to an average of an extra $6.34 a week for those who qualify, merely a head of cauliflower with the way the prices are today.

The other thing Bill C-2 talks about is the reduction of the TFSA from its current amount down to $5,500. In fact, 11 million Canadians took advantage of the TFSA. My wife and I, who I would classify as middle-class Canadians, and my kids who are in university have used TFSAs as a savings and investment vehicle. It is a tool that lessens the dependence on government. It gives people options. To reduce it just does not make sense because it puts Canadians in control of their future if they choose to do so.

Recently, my financial planner talked about TFSAs and he was quite concerned about the fact that we would see a reduction in them. He told me the story of a 22-year-old student who had invested the maximum amount in a TFSA, which was now worth $220,000. That individual will be able to take that out tax-free and use it for whatever purpose he or she chooses to use it for. The purpose of the TFSA was all about that.

About a century ago, American author and journalist H.L. Mencken wrote that complex problems had simple, easy to understand wrong answers. He may as well have been referring to the idea that budgets balanced themselves or that the Government of Canada could foster economic growth by simply injecting mountains of taxpayer money into the economy.

Government stimulus spending and workers alike can succeed. However, bad public policy, one based on pin the tail on the donkey approach, Liberalnomics, sees companies rushing for the border and everyone else heading straight to the unemployment line. That is exactly the road that the people in my home province have found themselves travelling on over the past 13 years and Canadians are sadly following the same disastrous route under the current government.

Tax breaks that do not help those who need it the most and they create deficits that are not needed. That is Liberalnomics. That is how I would explain to the residents of my riding why I am not supporting Bill C-2. It does not help those who need it the most. It gives members of Parliament a bigger tax decrease than most Canadians, and I will not support it.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, it is an honour to rise today in the House to discuss Bill C-2.

I want to start by clearly stating my premise up front and then speak to it throughout the 10 minutes I have. My premise is that fairness for the middle class and societal inequality cannot stand together. We cannot as a society, and nor can the government, decide that the middle class is the be all and end all of tax policy. I will say this bill misses the mark on delivering for the middle class.

We cannot say that fairness for the middle class is the be all and end all for society, because as long as inequality and poverty persist, every part of society is disadvantaged. Every part of society is disadvantaged by the continuation of poverty.

In the last half hour, I heard a Conservative member say that the people who need the tax breaks the most, the people who need the help the most, are the middle class. No, the people who need the help the most are the homeless. The people who need the help the most are the unemployed. The people who need the help the most are the poor.

In terms of inequality, where does Canadian society stand today? By any measure, we are a fairer and more equitable society than the United States. However, in a very real way, we are not as fair or as equitable as we used to be.

During the election campaign, I was digging all the time for stats and arguments for the few leaders' debates in which I was included. While doing research, I was staggered to come across this stunning statistic: the 86 wealthiest families in Canada have more combined wealth than the 11.4 million Canadians in the bottom of income brackets. Eighty-six individual Canadian families have more wealth than 11.4 million Canadians at the bottom.

Is this a problem? I submit it is a serious problem, and it is a problem that Bill C-2 will not address. I do not imagine that anyone thought Bill C-2 would address it. I will say, in fairness to the new government, that I hope that more is planned if it is serious about addressing income inequality.

Let us just look at this on a higher plane of analysis, namely, in regard to the mania for neo-liberalism, for the policies of Milton Friedman and for the Thatcher-Reagan era, in which no politician would say anything other than that we needed smaller government, that we needed tax cuts, that we needed deregulation, that we needed trade liberalism, as though that mantra would deliver great blessings to society overall.

One of the economists who I think has skewered this most effectively with detailed empirical research, and who does not brook a different opinion because he comes fully loaded with the facts, is Nobel prize winning economist and current professor at Columbia University in New York, Joseph Stiglitz. Stiglitz amassed all the information any Parliament would need to decide that inequality is unacceptable for a society that wants to succeed at anything.

Joseph Stiglitz's book, The Price of Inequality, is one that I hope every member of Parliament will read. Stiglitz concludes that:

Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset—its people—is not being fully used.

There are a lot of things one can say about the era of Thatcher-Reagan, neo-liberalism, and the kinds of trickle-down policies that were supposed to deliver benefits for all, but Joseph Stiglitz has pronounced, and I think it is time that we all learned how to say it, that the neo-liberal experiment with tax cuts to deliver wealth has been tried and is a monumental failure. Growth is stagnant. The economy is suffering, not just in Canada but everywhere. In Canada, particularly more than some of our OECD colleagues, we have had stagnant growth for a while now. We are not seeing investment, and I want to touch on what our corporate sector has been doing or not doing.

Trickle-down economics is a joke. The great Canadian economist, the late John Kenneth Galbraith, used to explain trickle-down economics like this. If one feeds a horse enough oats, the sparrows will eventually find a meal in the manure. That is trickle-down economics. In the alternative, as Gus Speth, who used to be head of the United Nations Development Programme, once said, when talking about trade liberalization, a rising tide lifts all boats; we can now fairly say that a rising tide will lift all yachts, not all boats.

We have a real challenge in our society and, boy, do we have a really good opportunity right now. I would urge the new government to actually embrace the idea of tackling inequality in our society. We have seen a foundational shift in our tax system in the last 10 years.

Let me provide this statistic. I am indebted to a great Canadian economist, who I wish had not just moved to Australia, Jim Stanford, for having identified this. Over the 10 years of the previous government, the federal revenues as a share of GDP fell from 16% in 2006 to 14.3% last year. That may be celebrated by some, but tax cuts overall end up with shrinking revenue to do the things that society needs, like make sure the health care system works, deliver child care for all, make sure people are not living in poverty and cannot get adequate housing, because again, I repeat, the empirical evidence is clear that it disadvantages all of society, not just the poor.

If we are going to see a rise in revenue, that means politicians are going to have to get used to saying some words that have been drilled out of our lexicon since the Thatcher-Reagan era began, and that is to ask where we are going to find the taxes to increase government revenue. It is clear that this tax cut modestly, moderately readjusts a tax bracket for our highest income earners. The top 20% basically see $3 billion removed from the very highest taxpayers, so that the next highest taxpayers get a slight benefit. It is not bad in itself, but it is not, on its own, tax relief for the middle class, nor does it strike any significant blow against income inequality. It is a small step, but tepid, and it fails to address the needs of the middle class, nor does it address the needs of the poor, nor does it really deal with the complicated tax code we have.

I would like to propose to the Minister of Finance that we need root and branch tax reform. We need to step back from all the fashionable pandering to individual sectors of a voting electorate, the boutique tax cuts of the previous 10 years. We need to review all of the complications that work against a tax code, that frankly, the fiscal conservatives say they want, and that people in Canadians for Tax Fairness argue we absolutely need. We need to simplify our tax code by taking out the special rewards: for people who happen to have kids who are already in hockey and can get a prize for that, for people who are already taking the bus and can get a prize for that. That is not good tax policy.

We also need to look for where we should be increasing taxes. I would suggest we need to look no further than what happened to the tax code for the corporate tax rate in the previous 10 years. It used to be 28% in the year 2000. By 2006, when the previous administration took over, it had dropped from 28% to 20%. It now stands at 15%. People might be interested to know that, in comparison, the U.S. corporate income tax rate stands at 35%. Other than Ireland, which is at 12%, Canada has the lowest tax rate in the industrialized world, and certainly right now we stand with the lowest tax rate in the G7.

I draw members' attention to the fact that Canada's corporate tax cut has resulted in about $700 billion to date being considered as dead money, as the former governor of the Bank of Canada described it—$700 billion sloshing around as available cash and not being reinvested in our economy where we need it. We may need to look at other tax measures. Down the road, we may need to look at the GST. The Green Party is not advocating raising that tax. We are talking about increasing the corporate tax rate. I believe it should be set where it was in 2008. We really need to look at a guaranteed livable income, because the bottom line is that Canada's society is middle class. All of Canada's society will not experience well-being and prosperity as long as poverty persists.

[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.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, I would like to congratulate my seatmate on an excellent analysis of why Bill C-2 is so flawed and why the previous government's economic record was so good. The member has a lot of material to work with.

I am sure that members, at least on this side of the House, will be familiar with the last two “Fiscal Monitor” releases, which showed that the Conservative government left the Liberals with a surplus. At the time the Liberals took over, the Government of Canada was running a surplus. We know there will be a deficit and that this deficit will be a direct result of the choices the Liberal Party has made, and not because of anything the previous government did, because we left the books in such great shape.

The tail end of my colleague's speech centred on the tax-free savings account, and I would like to speak to that as well.

Canada used to have a lifetime capital gains exemption. I believe at the time it was phased-out by a previous government, it was a $500,000 in lifetime capital gains. It meant that any Canadian could buy and sell shares, equities, or investment real estate properties, and when they sold, a good chunk of it would be tax free, and there were a lot of reasons for that.

There is a huge economic incentive to protect capital gains in that way, and the first aspect I would like to touch on is the idea that inflation is a tax.

When one has a capital gain, a good chunk of that notional gain is due to inflation. In other words, if I buy $100 worth of equities today and 20 years from now they have gone up 20%, when I sell them, I have to pay taxes on that gain even though a good chunk of that has been the normal inflation that the Bank of Canada actively seeks with its mandate to achieve a 2% inflation target. Therefore, the $120 that I sold the equities for is not really $120, because a good chunk of the value of it has been eaten away by inflation, but I still pay the taxes as if I had the benefit of the entire 20%.

What the tax-free savings account does, of course, is protect all of the growth, both inflation and real growth, from the tax man. Therefore, if I have equities in a tax-free savings account and it does go up by 20% over a period of time, then, yes, a good chunk of that is inflation, fake growth and not real, a kind of a tax and devaluation of something that I own, but it is protected at the very least from paying taxes.

Ordinary Canadians cannot protect themselves from inflation. It is a tool of government, a tool of the Bank of Canada, and it is done for many different reasons.

There is some debate as to the benefits of having an inflation target, but nonetheless ordinary Canadians can do nothing about it. They can try to protect themselves in terms of where they put their money, they can try to find investments that offer some kind of predictable return, but they cannot control what the folks at the Bank of Canada do, and it in turn certainly cannot control the mandate it is given by the government. However, the tax-free savings account, at the very least, offered a little bit of a shelter against the negative impacts of inflation when it comes to paying taxes, as one would not have to pay tax on that fake growth.

Mr. Speaker, I see we are approaching statements by members.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, it is my very great pleasure to rise today and speak on behalf of residents of Milton with respect to Bill C-2.

If we recall the last campaign, the new Liberal tax plan was a central part of the government's campaign. It would become a vital plank of the Liberals' platform, one that they would go on to say was a major part of the plan that they credit their election win on. In fact, it was a vital plank of their platform that was signed off on by the now-Minister of Finance.

What was really important to my constituents in that campaign platform was that the plan be revenue neutral, as they had promised. However, soon after coming into power, the Minister of Finance admitted that there was a miscalculation. He is basically admitting that the Liberals had been elected under false pretenses.

We also have it confirmed now by the Parliamentary Budget Officer that this tax plan will end up costing Canadians $8.9 billion over the next four years. This is one of the first concrete initiatives that was brought in by the new Liberal government, and it was grossly miscalculated. This leads us to where we find ourselves today, very much concerned about what is next. What future is our government headed toward in terms of other possible miscalculations?

The Liberals have justified destroying the former Conservative surplus and repealing the budget balance bill on the grounds that their spending is going to stimulate the economy. They are assuring Canadians, “Do not worry; relying on borrowed money is going to be okay. What really matters is the relationship between debt and GDP.”

What the Liberals are not telling Canadians is that these values of debt and GDP are not within the government's control. The government controls only spending, and quite frankly, it should be exercising prudence on this front. Targeted spending that will truly stimulate the economy is a good thing, and it is very different from these feel-good handouts that we are seeing more and more from the Liberal government.

What is this for? What is this deficit for, in terms of this tax plan? In reality, for a single person, Finance Canada tells us that it amounts to $6.34 a week. That is the price of a latte once a week, or maybe a salad once a week. The plan also relies on a feeling of consumer confidence, but when I talk to constituents in my riding, they have suggested that they are starting to feel a pinch.

A few weeks ago the Premier of Ontario announced a 4.5¢ tax on a litre of gas. That is about $900 a year for Canadian families to fill up at the pump. That is the cost associated with moving kids around to hockey, to soccer, to school. Under the federal Liberals' new tax plan, middle-class families are just going to receive $300 per year, and with this provincial tax, money granted under this bill will be completely swallowed up. Now, rather than feeling confident in spending, many plan on saving. After all, putting money in one pocket just to take it out of the other is certainly not what was promised in the election campaign.

The other aspect of this legislation that is truly concerning is that it seeks to make it more difficult for Canadians to save in general. It actually slashes the contribution limits for the tax-free savings account to $5,500 from the $10,000 that a previous Conservative government had set it at.

Many of the constituents in Milton have told me that they rely upon these savings accounts when planning for their future. In fact, there are two ways in which families in Milton are saving for their retirement and their future. One is by investing in their home. When they have their home equity built up, they utilize that in future years. They know they are saving toward a great goal.

The second way, of course, was through these TFSAs. The beautiful part about the TFSA is that individuals did not have to sell their homes in order to access the growth in these accounts. To someone saving for a higher education, a single couple saving to start a family, entrepreneurs saving for their businesses, parents saving for next year's hockey costs, or a low-income senior saving for retirement, the TFSA was a key tool to help them save. The Liberal tax plan will make life less affordable for Canadians and seniors who are ultimately trying to save for vulnerable years.

A recent report from the Parliamentary Budget Officer demonstrates that Canadians are taking on uncontrollable levels of debt. Canada has the highest debt in the G7, 171%, but at the same time we are taking away ways for Canadians to save their own money, and that is going to increase their exposure to becoming delinquent. The government should be encouraging responsibility in saving, regardless of how it chooses to run the nation's finances.

At a cost of $8.9 billion over four years, the new Liberal tax plan will do virtually nothing for Ontarians. The point is that the amount of money granted under the Liberal tax plan is so small that it is not worth the cost. With low oil prices, with thousands of lost jobs across the country, Canadians cannot afford to be plunged into a greater economic uncertainty with more deficit spending, which, by the way, is borrowing. When individuals buy cars, they do not say they are going to deficit finance that car. They say they are going to borrow money for that car.

If net benefits are nebulous, as they are in this Liberal tax plan, then it is problematic. If the government cannot manage its own books, who will? At the end of the day, all Canadians will end up paying in the form of tax increases.

The Conservative government had a legacy of tax fairness and a legacy of cutting taxes. When in office, the Conservative government cut taxes over 140 times. It left government with a surplus on the books, according to Finance Canada. That surplus became a deficit pretty soon after the Liberals took power. The Liberal path of deficit spending is disconcerting. The lack of oversight demonstrated in Bill C-2 speaks to this, and for Canadians, this should be a red flag.

Three promises were made in the Liberal campaign platform. The first was that the budget would be balanced by the end of the Liberal mandate, the second was that any deficit would be moderate, and the third was that any tax plan would be revenue neutral.

Canadians took the Liberals at their word, but over 120 days, every single one of these fundamental promises has been broken and fundamentally breached. Those promises, I would submit, were absolutely made in consideration for the vote of the Canadian taxpayer. As a result, we sit in a situation now where we do not know how much the deficit will be, but we expect it will be significant.

The Liberals are not going to balance the budget at the end of their mandate. We know with great certainty that this is not a revenue-neutral tax plan, because it has been shown not to be upon admission and by Finance Canada.

As I said, for Canadians these are not only broken promises but very costly broken promises. Canadians cannot afford these changes, and when they come at the cost of growing structural long-term deficits, they should be opposed.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I begin my speech today by referring to page 9 of the Liberal Party of Canada election platform and will quote directly from that document: “The two tax changes will be revenue neutral to the federal government.” It does not say that these tax changes might be revenue neutral to the federal government or that they hope these tax changes will be revenue neutral to the federal government. The Liberals were very clear that these tax changes will be revenue neutral to the federal government.

Of course, on page 6 of the same document, Liberals told us that this was all part of a “fully costed” platform. In fact, throughout the election, we heard how Liberal experts had fully costed the platform. However, we now know that the so-called Liberal experts got it wrong. In fact, they got it very wrong.

The public budget office has shown us the real cost of these Liberal tax changes. These are not revenue neutral at all. The real cost is $8.9 billion by the 2020-21 fiscal year. In other words, every single Liberal member of this House was elected under questionable pretenses.

Where are those Liberal experts today? I have yet to hear the Prime Minister apologize on behalf of these experts, or hold them accountable for misleading Canadians. The Liberals, as we know, say these tax changes will help the middle class. In fact, if we search Hansard, as well as online search engines, we would see hundreds of references by the Prime Minister about the middle class.

Yet, here is an interesting observation. On dozens of occasions in this place and in the media, the Prime Minister and the Minister of Finance have been repeatedly asked how they define the middle class. To my amazement, I have yet to find an answer. They consistently refuse to provide a definition.

Let us look at these tax changes for an idea on who the Liberals think are the middle class. Are they citizens who are earning $45,000 a year? According to the Liberals, these are not middle-class Canadians because there is no income tax cut for them in these changes.

In essence, the Liberal tax changes apply to the tax bracket for incomes just over $45,000, and up to $90,563. However, wait, there is more. For those who earn over $90,000, they will also pay less tax on this portion of their income. For those earning up to $199,000—and I will come back to why I reference $199,000 in a moment—they will benefit from this tax cut. In other words, someone earning $199,000 per year benefits from these Liberals income tax changes, while someone earning $45,000 a year does not.

I challenge any member of this House to ask your constituents who they think is part of the middle class. Is it someone earning $45,0000 a year who does not benefit from these Liberal tax changes, or someone earning $199,000 per year who does? It is no wonder that our Prime Minister and Minister of Finance refuse to define the middle class. Only the Liberals would think that someone earning $199,000 is middle class and someone earning $45,000 is not.

The other interesting part is that the Liberals, in spite of the shoddy revenue-neutral math, tell us that these tax changes are there to help stimulate the economy. However, part of these tax changes are that the Prime Minister has created his own new top income tax rate. Those earning $200,000 or more will be penalized with a new 33% tax rate. In other words, we have a tax cut intended to help stimulate the economy, yet those who are most financially able to stimulate the economy are being penalized not to do so.

I have no doubt that the same Liberal experts who bungled the math on these tax changes being revenue neutral likely came up with this misguided policy as well. With this Liberal tax hike, combined with provincial income taxes, some provinces will now be paying a combined rate of taxation that exceeds 50%.

I know that the Liberals think, who cares, that these people are wealthy. However, in talking to regions desperately trying to recruit much-needed new doctors, particularly rural areas in my riding, when doctors hear about a total tax rate of over 50%, they say “Thanks, but no thanks”.

What is also interesting is that Bill C-2 proposes to roll back the maximum TFSA contribution implemented by the former government. I went through Hansard and read the Prime Minister's comments to try to determine why he hates the idea of Canadians saving money.

I found an interesting reference from the Prime Minister. He believes that having a tax-free savings account will only benefit the rich and will be paid for by the next generation of Canadians. I find this fascinating. Here we have a Prime Minister who is saddling the next generation of Canadians with billions of dollars in new debt, and he is worried about people having too much money in a savings account. Only in Liberal land does this make sense.

Let us not forget that all tax-free savings account contributions are made with net after-tax dollars. In other words, they are from the net income after tax has been paid. Let us also not forget that although people's investment income may not be taxable within a tax-free savings account, which is the entire point of having one, eventually that money will be withdrawn. In fact, people already withdraw from the TFSA for vehicle purchases, home renovations, and other big-ticket items that are common reasons for withdrawal.

Let us not overlook that when people spend that money here in Canada, not only do they support our local economies, but the money is also taxed, by GST, HST in some places, provincial sales tax. It is bizarre when the Liberals say that they are cutting taxes for some Canadians to help stimulate the economy, yet they discourage the idea of saving money.

Yesterday, I read an interesting column in a report by Vancity Credit Union. It talked about the expectations of millennials to inherit funds from the bank of mom and dad. The problem is that in many cases the expectations exceed what the bank of mom and dad is planning on delivering. That is why I submit that cutting back the tax-free savings account and sending the message that saving after-tax dollars is a bad idea is so misguided.

That is why I am here today opposing Bill C-2. So-called Liberal experts have the map badly wrong and have misled Canadians in the process. These same so-called experts further came up with policies that will only further set Canada behind, while adding billions in increased debt. It is not increased debt because we are in a recession, but rather debt because we are in a period of slow growth. That does not make sense.

The Liberals often like to say that a Canadian is a Canadian is a Canadian. However, if someone is a Canadian making $45,000 a year, there is no tax cut. If a Canadian is making $199,000 a year, they are apparently the middle class and do get a tax cut. If someone is a Canadian making $200,000 a year or more, they are further financially penalized. However, I suppose the fact that all future Canadians, regardless of income, will be left paying billions of dollars in new debt from these Liberal tax changes is the great equalizer.

I oppose these changes, because I believe that as Canadians we deserve better.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the late Saskatchewan premier Allan Blakeney defined social democracy as a “fair share for all in a free society”, and the NDP certainly believes in a free society.

In the last Parliament, we were the only party to stand up and vote against Bill C-51, the Conservative surveillance law. In the current Parliament, we were the only party to stand up and oppose the Conservative motion calling on the state to condemn controversial speech about Israel.

However, as important as civil liberties are, and as good as the NDP's record is in this area, civil liberties are not what define us fundamentally as social democrats. “Liberal” is also a derivative of “liberty”. Even in the Conservative Party, there is a libertarian strain, even if it was pretty difficult to detect under the last Conservative government. What really defines us as social democrats is our concern for what former premier Blakeney described as a fair share: a more equitable distribution of income and wealth.

We believe in equality, not just for its own sake, but also because all the evidence indicates that a more equitable distribution of income and wealth leads to more happiness, better health, and less crime. Therefore, the trend toward worsening inequality is quite troubling.

In recent years and decades, a vastly disproportionate share of income gains have been concentrated in too few hands at the very top of the scale. The tax system is one of the most powerful tools available to government to address those inequalities. Therefore, I believe the House should evaluate Bill C-2 in terms of its effect on income inequality.

At this point, I will shift from quoting Allan Blakeney to invoking Clint Eastwood, because Bill C-2 has the consistency of a spaghetti western. Allow me to review the good, the bad, and yes, the ugly aspects of the legislation before us.

The good thing about Bill C-2 is that it includes tangible measures to collect a fairer share of tax from the rich. Specifically, it would increase by 4% the top income tax rate on incomes over $200,000.

This is entirely consistent with what the NDP has achieved at the provincial level. In Nova Scotia, the NDP government increased by 4% the top rate on incomes over $150,000. In a minority legislature in Ontario, the NDP amended a budget to add two points of income tax on incomes over half a million dollars. The most excellent NDP government in Alberta has quite correctly gone from a flat tax to a progressive income tax system. As part of our election platform in Saskatchewan, the NDP is proposing an additional percentage point of tax on incomes over $175,000.

The other positive aspect of this legislation is to restore the TFSA contribution limit to $5,500 per year. I think it is important to note that the previous Conservative government's proposal to increase that limit to $10,000 would only affect people who have extra money left over after the 18% of income that can be contributed to RRSPs and after the $5,500 that can still be contributed to TFSAs.

In 2013, fewer than 7% of eligible Canadians made the maximum TFSA contribution. It stands to reason that probably only up to that 7% of Canadians would stand to gain anything from a higher limit on TFSA contributions. Therefore, restoring that limit to $5,500 is clearly a progressive move. That is the good.

Now I am moving on to the bad.

Bill C-2 would include a so-called middle-class tax cut that would not actually help the middle class. I think the Liberals might be a bit confused between cutting the middle tax bracket and changing taxes in such a way as to help people with middle incomes, because what the bill proposes is a tax cut that only applies to incomes above $45,000, and that is more than the median Canadian income. To receive the maximum benefit, someone would need to have an income of more than $90,000 per year.

To put that into perspective, someone working as a nanny for the Prime Minister would receive nothing from the middle-class tax cut. However, the Prime Minister himself, and indeed all members of this House, would get the maximum benefit of about $700—but we do not need the money.

What are the alternatives?

We in the NDP had proposed to reduce the first tax bracket, which applies to everyone. We also proposed to boost the working income tax benefit, which is more targeted toward lower incomes.

In our election platform in Saskatchewan, the provincial NDP is proposing to boost the basic personal exemption, which again applies to everyone.

It would be extremely easy to design and implement a middle-class tax cut that would actually go to the middle class. However, in all the discussion we have heard about the bill, I have not heard a coherent explanation from the Liberals as to why they are pushing ahead with a tax cut that would only go to incomes above $45,000, rather than enacting a tax cut that would include all Canadian taxpayers.

I notice that many people on this side of the House are speaking today because the Liberals have given up their speaking slots in this debate. I would suggest that is because they do not actually have a very good answer to this question.

That is the bad.

Now, I am moving on to the ugly.

The bill would not even add up. I would argue that the Liberal tax proposal during the election was palatable to many progressive Canadians because it was promised to pay for itself. Even though the Liberal proposal was not very well targeted, it at least seemed that a redistribution from the very rich to the upper middle class might be a move in the direction of equality.

It has since been revealed that the bill would not pay for itself, that it would cost more than $1 billion a year in lost federal revenue. In effect, what the government is proposing is to borrow money to fund a tax break for people who do not really need it.

How could we make up the lost revenue?

Since 2000, Liberal and Conservative governments have slashed the federal corporate tax rate in half. We have not seen the promised boost in investment. On the contrary, we see private non-financial corporations sitting on a record hoard of cash.

The parliamentary budget officer estimates that each point of corporate income tax that we might restore would collect $2 billion of revenue.

One might argue that, with low commodity prices and depressed corporate profits, the corporate tax would not actually bring in that much. However, that is the beauty of corporate taxes: they function as an automatic stabilizer. When the economy is depressed and profits are low, they do not take very much money out of it, but as the economy starts to recover and we want to move toward a balanced budget, corporate taxes will automatically collect more revenue.

I would urge the government to very seriously consider at least partially reversing corporate tax cuts as a way of starting to collect the additional revenue that will be wanted as our economy begins to recover.

In conclusion, there are enough positive elements in Bill C-2 that the NDP is prepared to support it on second reading. However, there is a huge amount of room for improvement in targeting the so-called middle-class tax cut to those who really need it and in collecting the revenue that will ultimately be needed if the government is ever going to balance the budget.

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, it is a pleasure to rise in the final hours of debate on Bill C-2.

We all recognize that this piece of legislation, rushed into the House in December, a forerunner of the budget scheduled for March 22, was intended to fulfill a number of misguided campaign promises in time for a new taxation year. I must say that over the hours of debate since the speech by the Minister of Finance, his answers in debate and in question period, his pronouncements in various fora across Canada, Canadians are getting a very clear and concerning picture of where the government intends to go in terms of taxation, the collection of Canadians' hard-earned tax dollars, and of spending, namely, that it intends to go on a mega disbursement spree of those same hard-earned tax dollars.

The economic situation in Canada today, which a number of speakers have remarked upon, is truly a crisis in parts of the country walloped by the crash of resource prices, but it is not at all like the 2008-09 global recession. The fact is that Canada is not in recession today. Focused stimulation, tax cuts, incentives, and decisive and courageous support of projects such as pipelines and power projects are, indeed, appropriate for provinces hit hard by the resource downturn. However, massive, expansionary government spending, growth of the debt, increased debt servicing, and the mortgaging of our children's futures is simply not justified.

The minister's much touted middle-class tax cut will, he proclaimed, put more money into the pockets of Canadians who need it. The tax cut does, modestly, do that, but the finance minister himself estimates that that it will amount to barely $10 a week for the middle class and then, as our NDP colleagues have pointed out, only a portion of the middle class. At the same time, the Liberals promised that the total cost of the tax cuts would be offset by a new tax on Canada's most affluent taxpayers. Again, a reality check from Finance Canada reveals that, in fact, there will be at least a billion dollar shortfall in the Liberals' estimate, or, more appropriately, guesstimate, which is hardly reassuring as we anticipate the coming budget.

I will move on to the minister's ill-advised trimming of the tax-free savings accounts. The TFSA, as we know, was created by our previous Conservative government, along with more than 180 tax cuts made between 2006 and 2015. These tax cuts combined to give Canadians across all income groups significantly greater take-home income and reduced the federal tax burden to the lowest level in half a century. About half of adult Canadians today have tax-free savings accounts, which is a very high level of participation, indeed, for a program that only began in 2009.

These numbers have been cited before, but I am proud to remind the government again that of those TFSA investors who took advantage of last year's $10,000 limit, fully 60% earned $60,000 or less, which refutes the Prime Minister and the finance minister's characterization of the TFSA as a tool for the rich only. The tax-free savings account is also a particularly important retirement savings tool for seniors who can no longer take advantage of RRSPs, registered retirement savings plans.

A majority of Canadians supported and still support the $10,000 limit. Public opinion polls reflected this and still reflect this. That support is consistent across all age groups, income levels, and regions of our country. That support was reflected in one of the first e-petitions to the government, an e-petition that I was proud to sponsor. Folks at home can find and consider that petition at petitions.parl.gc.ca, listed under e-3, with the key words “taxation”, and “tax free savings account”. This petition has accumulated almost 5,000 signatures, even though the government plowed ahead in reducing this year's TFSA contribution level by half. The petition is still open for another month, and frustrated Canadians can still register their unhappiness with the government's decision until April.

The government tried to justify the gutting of the annual savings limits with the excuse that the TFSA cost the government too much. The federal government spends much more every year to support the very generous indexed pensions of government employees. Those public service pensions are paid for with the hard-earned tax dollars of the 80% of Canadians who do not work for the government, who have much less generous employer pension plans, or who must provide entirely for their own retirement.

In my constituency, the wonderfully diverse middle-class community of Thornhill, TFSAs have become an important part of taxpayers' retirement savings portfolios, an important part, again, of our senior citizens' retirement savings portfolios. That is evident across all income levels, as national polls show.

Making the retirement savings process even more challenging and burdensome, the new federal government has agreed to collect for the spendthrift Government of Ontario the job-killing payroll taxes from employees and employers for the so-called Ontario retirement pension plan. The ORPP is sold as a top-up to the Canada pension plan, but it will take fully 40 years to reach its modest annual payback level. Why now? What is the rush?

Well, Premier Wynne's government, in an amazing blaze of unintended transparency, in its 2014 budget, revealed that the ORPP is not really designed for retirees. The budget document revealed that ORPP is really a tax grab. It will help bail out the debt and deficit created by the provincial Liberal government's misspending. The 2014 budget said precisely that by “encouraging more Ontarians to save through a proposed new Ontario Retirement Pension Plan, new pools of capital would be available for Ontario-based projects such as building roads, bridges and new transit.”

The federal government is now complicit by recently agreeing to collect for Ontario the job-killing employment taxes, not for the workers of today who will see little, if any, eventual benefit, but effectively to create a new slush fund for its provincial Liberal cousins who have created the largest sub-national debt in the world.

A variation of an old joke, not that far from reality is, ask an Ontario Liberal how to create a small business and they will say, take a medium-sized business and tax it down to size.

I see my remaining time is short, so I will briefly return to the Minister of Finance's remarks, when he introduced to Bill C-2, in which he talked about growth and investment in the budget that will tabled March 22.

We on this side of the House are very concerned about the dark reality for Canadian taxpayers and the Canadian economy that will, we believe, define those words. The growth that the minister and Prime Minister are trying, unwisely, to create will be in annual deficits: $30 billion, $40 billion, or more, in expansionary spending that simply cannot be justified. The investment will be the billions of dollars of deeper debt that our children and grandchildren will eventually have to confront.

If the Liberals are really serious about growing the economy, the minister must come forward with a jobs plan that will actually help get Canadians back to work. He should abandon the rush to recklessly push Canadians' billions of hard-earned tax dollars into spontaneously confected, inadequately planned infrastructure projects or to impose new regulations and taxes based on half-baked theories.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure for me to speak today on what I think should be more appropriately titled the Liberal government's legislation on misplaced priorities, because that is exactly what Bill C-2 is.

The government of the day claims that this is a tax cut for middle-class Canadians and will help stimulate the economy. In fact, all it is is a bit of a shell game.

Liberals are attempting on the one hand to suggest to Canadians that this is a good thing, that it is reducing taxes, which is certainly something that our government believes in, since when we were in government for nine years, we reduced taxes over 140 times. The reason it is a shell game is that while there may be some modest gains in tax relief for some Canadians, on the other hand the Liberals have started to reduce the amount of contributions allowed in TFSAs.

The tax-free savings account was an initiative that our government brought in several years ago, the most important savings vehicle that Canadians have seen since the advent of the RRSP. It has been incredibly popular, and it was well received by Canadians from all income brackets.

My colleagues previously have talked about the fact that 60% of Canadians who maxed out their TFSAs have modest incomes. I always say that any time we give Canadians an opportunity to save money in a tax-free vehicle, that has to be a good thing, so when did it become wrong for Canadians to have the ability to save more of their hard-earned money tax free? When did it become wrong to do that? However, that is exactly what the government apparently is saying, because it is planning to reduce the TFSA contribution limit from $10,500 to $5,500. Liberals are denying Canadians the opportunity to put $5,000 more per year into a tax-free savings account.

I recognize that perhaps not all Canadians would be able to contribute the full amount each and every year, but the TFSAs have been structured so that there is a carry-over element. If people cannot max out their contributions in one year, they do not lose it the next year. No, that unused amount can be carried over, and carried over almost into perpetuity, so that several years down the road if a retired couple wants to sell their house in which they have built up a great deal of equity to travel in their golden years, they could take the money from the sale of their house and put it into a TFSA to the maximum amount.

However, the Liberals feel that this is not the right route to take. Rather than allowing Canadians more opportunities to save more money, they want to reduce that amount. Their argument is that only the wealthy can afford to contribute $10,500 a year, but that is not what they really are saying. They may say that publicly, but what they mean and what they intend is that if a majority of Canadians maxed out their contributions at $10,500, it would cost the government money in lost tax revenue. That is really the crux behind this move, because the government is in trouble.

Although the Liberals promised what they considered to be modest $10-billion-a-year deficits in the first three years of their term, now are going to be incurring at least $30-billion deficits for the first several years of their mandate. They said they would be able to balance the books by 2019, by the time of the next election. It is now admitted by the government's own officials that doing so will be an impossible task.

The government needs more revenue. Allowing Canadians to save more in a tax-free environment would deny the government the much-needed revenue it so desires. What do the Liberals do? Their approach is to spend more money. They say that spending more money will ultimately create a healthier and larger economy. This Keynesian approach has never worked in the past and it will not work this time, but that is the approach that the government has.

I suspect that some of that comes from a long history of Liberal mismanagement in the economy. If one only takes a look at the current Prime Minister's father and his regime, when former Prime Minister Pierre Elliott Trudeau left office, his Liberal government was spending $1.03 for every $1 that it took in in revenue.

No wonder we have such a huge debt in this country, a debt that we are still trying to pay off, thanks to a previous Liberal government. Apparently the apple did not fall far from the tree, because the current Prime Minister seems to be taking the same approach as his father, an approach that has left this country in massive debt.

This is unacceptable, but obviously there are options. Any government has choices. How can it increase its revenue? How can it take in the amount of money it needs to produce programs and balance the budget, as it apparently desires to do?

The obvious choice is to raise taxes, but that is never a popular choice for any government. The other option is to find projects that might increase employment and consequently increase tax revenue, both personal and corporate. The government would argue that this is exactly what it is doing with its stimulus spending: by putting money into the economy, it would create those jobs, create those projects, and in return receive additional revenue.

Unfortuntely, most economists worth their salt would tell us that stimulus really only works if a government or a country is in a recession, which Canada is not. Our economy is growing. Perhaps it is growing more slowly than we would like, but we are most certainly not in a recession, so there is no need for stimulus spending. What is needed is for the private sector to initiate projects that would bring in that much-needed tax revenue, projects that would create employment.

What have we got out there? Is there anything on the horizon that we could point to that might actually fit the bill? There is something, and it is called the energy east pipeline. Here is a project that is shovel ready, would not cost the Liberal government or taxpayers a dime, and would create literally thousands of jobs and billions of dollars in tax revenue between personal and corporate income tax, yet the government sees fit to put so many impositions and prohibitions on the start of this project that the chances of energy east ever seeing the light of day are slim. Hopefully, chances are not zero, but that is what is probably going to happen.

This is why I say that this piece of legislation is misguided in its priorities. There are alternatives. There are options the government could employ to increase its revenue base without costing the Canadian taxpayer a dime, but the Liberal government does not want to do that. Instead, it is going to punish and penalize average hard-working Canadians by reducing the amount of money that those same Canadians can contribute to their tax-free savings accounts.

The Liberal government is making the wrong choices. It has misguided priorities. At the end of the day, we will find that Bill C-2, the first piece of legislation the government has introduced, will end up costing Canadians far more than they will save.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, it is a pleasure to speak to Bill C-2. I want to focus my discussion today on the tax-free savings account.

I find some of the comments from the other side of the floor about the tax-free savings account, which we initiated, very interesting. We are very proud of this initiative and I think many Canadians appreciate it.

From going around my riding of Foothills in southern Alberta during the campaign and during other times during the year, I know Canadians, especially those in my riding, appreciated the increase in the tax-free savings account. Canadians use this to save for their children's education, or to buy their first home, or maybe to have a comfortable retirement. However, the fact is that the tax-free savings account allows Canadians to save.

Some members opposite claimed that this was just a way for us to pander to our base. If the middle-class Canadians who supported TFSA is our base, I would be more than happy to take them.

Members say that these dollars do no go to the Treasury and that they could be better spent. That is an arrogant statement, especially coming from a government that horribly has gotten the math wrong on its middle-class tax cut, which will now go into $30-billion annual deficits despite having pledged $10-billion deficits. Its financial plan is a mess and yet it is telling Canadians that it does not want them to have the benefits of the tax-free savings account because it feels it could spend those dollars better than them. It is extremely disingenuous to tell Canadians that a government can spend their dollars better than they can.

I want to talk a bit about what the tax-free savings account really means to Canadians.

We heard members opposite say that this was something very few Canadians could use, that it was a tax haven for the wealthy.

It should be noted that 11 million Canadians have tax-free savings accounts. That is certainly more than just wealthy Canadians. Eighty per cent of those are making $80,000 or less. Of those who maxed out their TFSA, 60% are making $60,000 or less annually. These are not wealthy Canadians. These are hard-working Canadians who are making difficult choices for their families, difficult choices that they feel will benefit them in the future, whether that is saving for their first house, or their children's education or for retirement. These are hard-working Canadians making the financial choices that they feel are best for them.

Since when does the government step in and say that it knows better than them when it comes to savings? These Canadians are simply trying to have a sound financial plan. We should be encouraging these things, not eliminating them. The key is that Canadians should have the opportunity to make decisions that are best for them. They are making choices that suit their priorities. Certainly some may have an RRSP, but the TFSA has much more flexibility than an RRSP. What is wrong with giving Canadians another option, another opportunity to save for their futures?

Canadians want to have those choices so they can put money away when times are good. Certainly for Albertans, many of them may be tapping into their tax-free savings account when times are difficult. This is a great chance for them to put funds away when times are good to help them through when times are difficult. When times are tough and they do not have that savings, they will rely on government social programs, whether it is EI or other programs. Any time they can be self-sufficient and rely on their own savings is a benefit for the government.

The new Liberal government's approach to this is misguided. It wants to take away something that has been extremely popular. As I said, 11 million Canadians have a TFSA. The Liberals want to take away something that allows Canadians to make their own choices in whatever their unique savings goals might be. Not only do they want to take away the TFSA, but they will be implementing a mandatory CPP increase. This will not only hurt Canadian taxpayers—an additional $1,000 a year—but it will also impact Canadian business owners because they will have to also match those fees.

Why would the government put in a mandatory savings when it has this great opportunity of which many Canadians can take advantage? They can put as much or as little into it, whatever they feel best benefits them and their families.

What kind of message is this sending to Canadians when the Liberal government is saying that it wants to take away some of their options for savings, but at the same time it will use those dollars to try to mitigate this massive deficit it will pass on to the taxpayers. The government will be taking with one hand and taking with the other. That could be extremely frustrating for Canadians who are trying to save for their future.

The Parliamentary Budget Officer released a report earlier this year that stated household indebtedness and financial vulnerability in Canada was increasing. It showed household debt servicing capacities were continuing to trend upward, while continuing capacity to meet those debt obligations was diminishing. It shows that we should be giving Canadians every opportunity to save when times are good, so when times are tough, like they are right now in Alberta, Atlantic Canada and Saskatchewan, they have an opportunity to have savings they can tap into when they need it.

Reducing the TFSA contribution limits will simply reduce the ability of Canadians to save for retirement and to protect themselves during those economic downturns. TFSAs remove barriers for all Canadians to maximize their financial position. It really is a shame the Liberal government wants to decrease the ability of Canadians to use this tool to save for their future.

The other issue at hand with Bill C-2 is the middle class tax cut. I am sure this vision was burned into the minds of Canadians during the election campaign. The Prime Minister went from coast to coast to coast and said, “A billion dollar tax cut for the middle class, paid for by a $3 billion increase on high income earners”.

However, the Liberals got their numbers completely wrong. This middle class tax cut is anything but revenue neutral. In fact, the Parliamentary Budget Officer has said that this tax reform, and I will not call it a tax cut, will cost Canadians $8.9 billion over the next six years. That is anything but revenue neutral and it shows that the Liberal government will be taking away with one hand and taking away with the other. They say that this is a middle class tax cut, but average Canadians who qualify for this will only get $6 a week. I do not think that will have a profound impact on stimulating our economy or making a big impact for middle-class Canadians. In fact, middle-class Canadians will not benefit from this at all. The group that makes closer to $200,000 will benefit the most.

We will be penalizing those hard-working Canadians, usually those who have started businesses, created jobs, grown our economy and who worked extremely hard to be in that higher tax bracket. We will be taking $3 billion away from them, and it will not be making that big of an impact.

We should be taking a hard look at who actually will be benefiting from this middle tax cut. It is not a tax cut. It will be a $8.9 billion debt for which each and every Canadian taxpayers will have to pay.

We should not be impacting or discouraging Canadians from saving. We should not be discouraging those hard-working Canadians who are job creators, who have started businesses, who have helped grow our economy. What I see in Bill C-2 are miscalculations impacting our business owners and our entrepreneurs. Also it will not have the financial impact the Liberals have said it will have.

I encourage all members of the House to vote against Bill C-2. This will have not have the financial impact the Liberals have said it will, other than increasing our massive and growing debt. It comes down to this. Should Canadians be taking financial advice from a Liberal government that could not get the math right on its middle class tax cut, is arguing with its own financial staff on the amount of the Conservative surplus, and will now have a $30 billion annual debt that it will put on Canadians? I do not think we should be taking financial advice from that party or that government.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I would like to thank my colleague from Bécancour—Nicolet—Saurel for his speech. Bill C-2 will reduce the second personal income tax rate on income exceeding $45,000. My question for my colleague is as follows: would it be better to reduce the first tax bracket, which applies to everyone?

[Ted Falk, Conservative, Provencher, MB]

Mr. Speaker, I want to thank the member for Mount Royal for his excellent speech and defence of Bill C-2; however, I would like to focus on the tax-free savings accounts, TFSAs.

In my riding and right across Canada, the most prolific users of tax-free savings accounts were our seniors. It was an avenue for seniors to take their nest egg, their retirement savings accumulated over a lifetime of working, and put it into a vehicle that did not attract any tax. The government is focused on giving the guaranteed income supplement a boost, but would this not have also been a good measure for our seniors?

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, let me draw a picture. A single mother is earning $80,000 and has two kids; one of the kids is in day care, and one of the kids is starting grade 2. She has to afford her mortgage, her grocery bill, her day care bill, and all of these different things in her daily life. This is exactly the type of measure that is designed to help her and nine million other Canadians. This is why I am so proud to rise today to support Bill C-2 in its second reading.

On January 1 of this year, nine million Canadians received a tax break. Our government was elected on a plan to grow the economy, and these changes are an important first step in that plan.

This week, our government reiterated its conviction that when you have an economy that works for the middle class, you have a country that works for everyone. Our government is charting a new course. At the heart of this approach is a commitment to strengthen the middle class and create conditions for economic growth that benefit all Canadians.

The new government will take action to ensure that economic growth is shared equally with the middle class and those working so hard to join it. In challenging economic times, the government has an important role to play. Now, more than ever, is the time to make investments to build a stronger middle class and foster sustainable, clean growth.

The legislative measures set out in Bill C-2 are the first step in the government's plan to create the long-term conditions necessary for economic growth. This will certainly not be the last step since we have a very ambitious agenda that we will fulfill one step at a time, one bill at a time, and one debate at at time.

I want to focus on the bill we are debating today, Bill C-2. This bill makes a meaningful change for the middle class by putting more money in the pockets of Canadian workers. In 2016, this bill will lower the personal tax rate for taxable income by 7% for people earning between $45,282 and $90,563.

On January 1, 2016, the government also reduced the annual contribution limit for the tax-free savings account, or TFSA, from $10,000 to $5,500. I assure the House that this change is not retroactive. The 2015 contribution limit will remain $10,000. We know that just 6.7% of Canadians who are eligible to contribute to a TFSA contributed the maximum amount in 2013. Doubling the contribution limit did nothing for the 93.3% of Canadians who did not contribute the existing maximum. Indexation of the annual contribution limit will be reinstated so that the annual limit maintains its real value over time.

Let me just say that I very strongly support the TFSA. I think it is a very important investment vehicle.

However, given the fact that so few Canadians used the maximum amount—only 6.7% in 2013—the amount of money we are losing in treasury for doubling the amount of TFSA can well be used on better things, such as for example, the Canadian child tax benefit that we intend to introduce.

With this tax cut for the middle class and the associated changes, we are delivering a fairer tax system. It is expected that about nine million Canadians will benefit from this measure in 2016, and this measure represents a real change for many Canadian workers. Not only is this measure fair, but it is also the smart thing to do for our economy. Furthermore, the tax changes proposed in Bill C-2 took effect on January 1, 2016. This means that the Canadians affected by these tax changes are already seeing the impact on their paycheques.

This is a turbulent time for the global economy, a time when the Bank of Japan has adopted a negative interest rate policy, China is facing a slowdown, the collapse of commodity prices is more than just a blip, and mediocre growth is the new norm.

This is a time when Canada needs decisive measures and a firm hand. It requires bold leadership in order to make smart investments and adopt tax measures to put our economy on track for growth.

Our government is ready to rise to the challenge. Our government was elected to implement an ambitious economic agenda that will kick-start our economy. We are taking concrete action to manage the Canadian economy. We are building a more sound economic foundation by providing tax relief to middle-class Canadians and investing in key sectors.

Thanks to our plan to strengthen the middle class and grow the economy, people who work hard can expect a good standard of living, a secure retirement, and better opportunities for their children.

During the election campaign, many of us had the chance to travel around our own ridings; and my riding of Mount Royal is no different from many other ridings. All of us know many people who would benefit from the middle-class tax cut.

It is true that not every Canadian would benefit. Some Canadians who earn more than $200,000 would be taxed a little more. Some Canadians who earn less than $45,000 would not benefit from the middle-class tax cut itself. However, they would benefit from all of the corollary efforts the government would make: to add to the guaranteed income supplement for single seniors, the Canada child tax benefit that would allow those who earn less to have much more to take their children out of poverty, and all of the corollary plans of our agenda, which was the plan Canadians chose in this election. They are ones that we believe are well worthwhile to put through.

I fully understand that some members opposite may disagree. We are all free, in a democracy, to disagree. However, I do think nobody can doubt that this was a proposal we made in the election campaign—a proposal we were elected on—and as such, it is a proposal the government needs to adopt in this Parliament.

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

Mr. Speaker, what the member does not realize, or he did not state, is that there are millions of Canadians who will benefit. I also did not hear him make reference to the tens of thousands of manufacturing jobs, and those workers who would benefit by the bill. This is why the NDP have chosen to support the bill.

The member did not talk about the tens of thousands of teachers from coast to coast to coast who would benefit in tax relief from the bill before us. There are nine million Canadians who would benefit from the bill.

The NDP asks about those on very low income. Never before have we seen such a progressive national child care program, which we are going to be hearing a lot more about in a week or so, that would lift hundreds of thousands of children out of poverty.

These are the types of progressive initiatives that the Liberal Party talked about prior to the last federal election. What we are seeing today, through Bill C-2, is a piece of legislation that would help to implement the Liberal platform. It would lift children out of poverty and support Canada's middle class.

I appreciate that the NDP will be supporting the bill, but will the member not at the very least acknowledge the benefits that tens of thousands, if not millions, of Canadians, would receive by seeing this legislation pass?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to speak on Bill C-2 today. It is an initiative that New Democrats support going to committee. The reason we are doing so is because there are so many issues related to the incomes of Canadians.

The debate itself is healthy, because we have seen in society, during the years that I have been here, a movement away from the middle class, in two directions. One direction has been that some have become more affluent and are able to take advantage of certain government changes in laws, like the tax-free savings account and other types of measures put in place over the last decade. In the opposite direction, there are people with challenging circumstances, such as their wages being frozen, having their working hours reduced, a reduction in benefits taking place as collective agreements have been stretched to the limit, or benefits staying the same and cutting the workforce. That has very much been a priority of unions across this country, because they want to keep the same benefits and wages. However, there has been a stagnation with that.

We have also witnessed, on the other end against personal income taxes, massive corporate tax reductions that were supported by the Liberals originally, and then later by the Conservatives. That has left our economy without a lot of the tools that we normally would have had. There are a number of different industries, like the banks and so forth, that have benefited from a lot of tax reductions. Their response to those tax reductions has been historic layoffs and closures of facilities that actually cost Canadians more. There has also been a reward for them related to the products and services that they provide to customers on the other end. Therefore, there are those who are less affluent and cannot take advantage of their different circumstances.

Before I get into the connection to Bill C-2, I will take, for example, my bank, which I will not mention the name of; I also deal with a credit union. My bank allows its customers free banking services if they maintain a minimum of $1,000 in their accounts. It continues for the duration of a month. If customers go below that amount, then they pay a series of charges. In the riding I represent, Windsor West, there are a lot of people who do not have $1,000 in their accounts, especially if they are students or working-class families. They pay those additional fees, whereas people with the money do not have to. We have lost the income stream from the government's tax reductions and a whole bunch of dead money in our economy, and then, on top of that, service charges continue to grow.

The tax-free savings account, in Bill C-2, is something that New Democrats are happy to see the eventual reduction of. The parliamentary budget officer and others have raised the caution flag with regard to the way that this expanded. I know from representing my area and travelling to other parts of Canada over the years, whether it be for my seniors charter of rights bill or other initiatives on auto fairness, that there are a series of things I have run into. The common thing is that a lot of people do not even have enough money to save for their current school year, let alone the next one.

There is a fine college, St. Clair College, in my riding, as well as the University of Windsor, that have done their part in expanding services and competitiveness, and attracting international students and other Canadians to go there. In many respects, it revitalized some of our innovation. However, the reality is that most people who go to school there are just getting by or taking out loans to get by, let alone putting money in a tax-free savings account. Perhaps some of their family members are doing so with their help, but the ordinary Canadians I represent do not have that luxury.

The squeeze is on the middle class and those who are unemployed. As I mentioned, in the job service sector many people are moving to part-time or precarious work and basically just getting by. Unfortunately with this bill, we know from third-party experts and economists that 60% of this plan for a reduction in taxes for Canadians will not be enjoyed by the middle class or people with less earnings. Therefore, there is a series of Canadians who will be left out. Because of the way this scheme works, the wealthiest will have the benefit. That is a real problem that New Democrats want to address at committee. It is an issue that we have raised before.

There will be a vote later tonight on employment insurance, where there are many people paying into a system that does not provide them with any benefit whatsoever. In the example that I used in speaking about this issue earlier in the House, there are persons with disabilities. They only have a certain number of hours to do their jobs because of health restrictions. They pay into the system, and to my knowledge would never benefit from it because they would not qualify at the end of the day.

We have to be careful. People are still getting their heads around it. To this day, I run into people who say they do not want to go on employment insurance because they do not want to feel they are taking taxpayers' money. They like to get by on their own. However, what people forget is that employment insurance is their money that comes off their pay cheques, and the companies' money. That has nothing to do with the government, aside from the government deciding how that is disbursed, how it is actually given back to workers.

We set rules that disadvantage those who are in more precarious and part-time positions, and that includes women. We have a systemic issue within our culture and our society, even on the government programming side. We make lots of noise about being equality driven, but we still have rules in place that do not allow that to happen.

Who would not benefit from this bill? It is important for Canadians to realize some of the comparisons and who would not benefit whatsoever from this plan in terms of tax reductions. They are office workers who make an annual salary of less than $40,000 per year; they would receive nothing under this scheme. They are hairstylists, who in Canada basically earn around $28,000 annually. They will get zero. They are social workers, which I used to be in my previous working life. I worked for two organizations, on behalf of persons with disabilities and on behalf of youth at risk. Their annual salary today is around $44,000. They would get nothing. Some people in the process of trying to buy a home, who are trying to raise families and trying to get forward, would not be able to benefit from this plan.

We have cashiers. When we go to stores and see the people working there, they work hard doing what they need to do. In our economy in some places, we have had challenges with the retail sector and so forth. They earn $21,424 on average. Cashiers would get nothing back. That is a classic example. All of the people working in department stores, in retail shops, in drive-throughs, in fast-food chains, and all of these different businesses, would receive zero from the plan. To me, they are the people we should be rewarding with a tax reduction. These are the people who do not have the equity to easily afford some of the tax deductions that wealthier Canadians get. They do not earn income at the level to take advantage of some of the policies that have been put in place over the last couple of decades.

Waiters and waitresses earn less than $22,000 as an average wage. They would get zero. That is another group of individuals I would argue would not benefit from this tax reduction. They would get nothing at all. Nannies are another good example, and chefs and assistant chefs as well. They would not get anything.

Who would get income from this legislation? Our bank managers, who earn around $82,000 a year, would receive $555 in their tax season from this. They would receive that and also be eligible for the tax-free savings account. They would be in an income stream where they might be able to take advantage of it. It would be beneficial for them and their families. A lawyer, earning around $108,000 a year on average in Canada, would get $679. Members of Parliament in that same wage amount would get the cap, at around $680, as well.

I know my time is running out, but I want to hopefully create an opportunity at committee so we can work on some of the measures to ensure that all Canadians are included in this proposed tax reduction. We know it is going to come from the cost of borrowing, as the Liberals do not have the money coming in that they thought they had for this bill. Interest and payments on that money in the future is paid for by all Canadians, so all Canadians should be part of a tax reduction.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, I am pleased to stand today to speak on behalf of my constituents and Canadians across the country who have great reservations about Bill C-2 and the ballooning deficit agenda of the Liberal government.

My riding of Yorkton—Melville is strongly representative of the highly educated and talented workforces the Minister of Finance confirms exist in Canada, from young successful entrepreneurs and professionals to small- and medium-sized businesses in the real estate, retail, agriculture, manufacturing, and mining sectors, just to name a few.

We are a hardworking bunch who are committed to sustainable growth and prosperity. We value caring for each other and those less fortunate. We value investing in our communities, our hospitals, care homes, and our youth at risk programs. Quite frankly, the people of Yorkton—Melville are second to none when it comes to hard work, compassion, and common sense.

Election promises were made. However, promises made, promises kept, has yet to apply to the government. Instead of helping the middle class, the Liberals' tax cut is most beneficial to the high end of the second highest tax bracket, those who make close to $200,000 a year. In fact, the parliamentary budget officer says that the reduction of the second tax bracket will benefit the top 30% of income earners in the country.

Based on the Finance Department's own estimates, the new Liberal tax plan amounts to an average $6.34 a week for those who qualify. These facts reveal that this tax cut does not in any way uphold the Liberals' campaign promise. They promised that the tax cuts would be part of a plan holding the deficit to $10 billion.

The Prime Minister promised a $3 billion tax cut for the middle class, paid for by a $3 billion tax increase on high-income earners. The middle class tax cut would be revenue neutral. By the Minister of Finance's own admission, there will be a revenue shortfall of over $1 billion on this issue.

The Institute of Research on Public Policy has said that the shortfall will be even greater, creating a revenue debt up to $1.5 billion. The C.D. Howe Institute, which the Minister of Finance once chaired, said the Liberal plan will fall short by nearly $2 billion, that will not be revenue neutral, but a tax cut that will cost the treasury a minimum of $1 billion.

I have to say that ordinary folks in my riding are shaking their heads, wondering how election promises were made, either with poor research and poor advice, or with no clarity other than that hope that “This could work. It sounds good. Let's go for it.”

Another related promise has been made that in the upcoming budget a new Canada child benefit will be introduced, plainly to target those who need it most by replacing the universal child care benefit, which was not tied to income.

The UCCB was given to every family, true, regardless of income. In addition, the Canada child tax benefit was also available for parents who needed and were eligible for more support. Here, I totally agree with the member opposite that my own family, when they were in challenging circumstances, were very thankful for that support that lower income folks need, and especially since, in many cases, the amount of tax they pay is minimal to begin with.

While I was door knocking during the election campaign, one gentleman complained to me that his daughter and son-in-law would have to give it all back when submitting their taxes and that it would not be of any benefit to them. As we talked, he did share that they were both good income earners who had qualified for their mortgage, and whose children were well cared for and that they had a little bit of savings. Since they knew they were likely to have to return the money, I suggested that perhaps they could put it in their tax-free savings account and at least make a little tax-free interest in the meantime.

As well, I suggested that it was probably good to know it was there in case the unexpected happened, an illness or who knows what, such as a downturn in the economy that could mean a temporary or permanent loss of employment, in which case an unexpected change in their family income could suddenly mean that the UCCB would be there for them because it is readily available and not tied to income.

This new Liberal child benefit tied to income would not be adjustable until after one's income tax has been filed and a difficult year is in the past, like the year that many of our oilfield workers in Saskatchewan and Alberta and those from the east coast are experiencing right now.

Then there is the decision of the government to eliminate the increase in the tax-free savings account to $10,000, declaring that this action is consistent with their objective of creating a tax system that is fair and helps those most in need.

As a result of the TFSA being designed to be cumulative, it encourages young Canadians to invest what they can, knowing that it is a savings account to be used for the future when they are economically able to put more away in the knowledge that they had that choice. These accounts were an enormous step forward for the middle class to support a wide range of their financial goals, including saving for school, their children's futures, a home, or a comfortable retirement.

When the money is withdrawn it carries no tax penalties. Unlike the RRSP, money in a TFSA can be used as collateral, while at the same time investments are not counted as income to qualify for government benefits or pension supplements that carry a means test. They are not to penalize the most vulnerable people in society but to add to the free choice of how Canadians can save.

The argument that keeping the limit at $10,000 would have helped Canada's wealthiest save more while costing the federal treasury hundreds of millions of dollars over the next five years is truly telling. It says that the government cannot afford people putting away for their own futures, saving for their own retirements, so they can continue into their golden years self-sufficient and continue to contribute to the economy. It says that when the government goes into deficit to the tune of at least $50 billion in the next four years, it will need to claw back the hundreds of millions of dollars Canadians would be saving for themselves and their families' futures over the next five years.

The new government's approach to retirement savings is counter-intuitive. On the one hand, it supports the Government of Ontario's ideology to force all workers into new government-sponsored pension schemes that would cut take-home pay and force employers to cut jobs and/or have less to invest in the very businesses that are the backbone of our economy. On the other hand, the Liberals want to deter Canadians from using a revolutionary savings tool designed to support Canadians in whatever their own unique goals might be.

Eleven million Canadians opened tax-free savings accounts. People earning less than $80,000 a year accounted for 80% of those holding those accounts, and 60% of the individuals contributing the maximum amount had incomes of less than $60,000.

I personally encourage all young Canadians to open tax-free savings accounts now, in the midst of the challenges of getting their post-secondary education, raising their young families, facing increased unemployment and rising housing costs, including higher down payment expectations from the government that will hurt their ability to get into the housing market. I urge them to do it now so that the accrued potential for their future savings gives them hope and the incentive to plan and take hold of their future, and certainly not depend on a government that says on the one hand that it wants to invest in the middle class while on the other hand stifling their saving options and growing a national debt that will ultimately fall on their shoulders to repay.

This legislation does not recognize the fact that the tax break for the middle class is not revenue-neutral and would not make a significant difference in the ability of the middle class to grow or stimulate the economy in a significant way. This legislation would place a higher priority on federal revenues to offset the government's intentions to go significantly further into deficit than on empowering Canadians. When the Minister of Finance introduced the bill he said that “the government's job is to help Canadians succeed”. Sadly, the bill does not meet that objective.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, I want to follow up on the question my colleague asked regarding the consultation.

When I went around my riding and most of Alberta, the feedback I received from Albertans was that the increase in the tax-free savings account was extremely welcomed to Albertans. Talking to my colleagues, I heard that it was extremely positive across Canada.

The member talked about consultations with Canadians. Have the Liberals ignored the feedback from Canadians who appreciate the increase in the tax-free savings account? Bill C-2 would eliminate that increase. I would be interested to hear why the Liberals would eliminate something that Canadians really want.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, our government was proud to run on an ambitious economic agenda, an agenda that highlighted the importance of investment, investing in our economy and infrastructure. However, we did not pledge only to invest in the economy; we pledged to invest in the resourceful and talented people of our great country.

Specifically, our campaign was predicated on the belief that investing in the middle class and those working hard to join it was of utmost importance. As all members of the House can agree, when the middle class succeeds, we all succeed.

We are committed to a strong and growing middle class. The middle class is the true driver of economic growth and job creation in our country, and it needs our help.

Having run on, and been elected on, this plan, I am proud to support this legislation, which delivers on our promise to cut taxes for the middle class that has gone far too long without a raise. This is the fair thing to do; this is the right thing to do.

In the economic update of a few days ago, the Minister of Finance made clear that we were facing difficult economic times. We know that times of economic difficulty exacerbate inequality.

Bill C-2 would cut the tax rate on income earned between $45,282 and $90,563 in 2016 to 20.5% from 22%, and it would introduce a new tax rate of 33% on income in excess of $200,000.

As of January 1, the government is putting $3.4 billion in the pockets of about nine million Canadians each year.

Single individuals who benefit would see an average tax reduction of $330 every year, and couples who benefit would see an average tax reduction of $540 every year.

To help pay for this middle-class tax cut, the government is asking the wealthiest Canadians to contribute a little more. We are therefore creating a new top personal income tax rate of 33% for individual taxable incomes in excess of $200,000.

Earlier, I mentioned the importance of helping the middle class, and those working hard to join it. It is critical that as a government we remember those most vulnerable in our society. In budget 2016, we will see a major step forward in helping our most vulnerable, through the introduction of the Canada child benefit.

I would like to discuss what this measure will mean for Canadian families.

This new tax-free income-tested benefit will lift hundreds of thousands of children out of poverty. Nine out of ten Canadian families will be better off.

The proposed Canada child benefit will simplify and consolidate existing child benefits. It will replace the universal child care benefit, which is not income tested. As we have committed, the new Canada child benefit will be better targeted to those who need it most.

We aim to have payments under the CCB begin this summer. It will give a new generation of Canadians just a bit more space to be children and to grow into a Canada that has prepared itself for them through long-term investments. That includes things like skills and labour strategies to unlock the potential of greater productivity, without making people work longer and harder for less.

Our most vulnerable will also benefit from our historical commitments to infrastructure. They will benefit from our commitment to social infrastructure in things like affordable housing, but also targeted investments in public infrastructure that will grow the economy and get Canadians moving, and green infrastructure that will open up new sectors while addressing climate change.

Canadians elected us to do these things, and they are supportive on the work we are doing.

Recently the Minister of Finance and the parliamentary secretary fanned out across the country, asking Canadians directly what our government could do to better support the middle class. They met with indigenous leaders, business leaders, cultural leaders, all with the intent of listening to Canadians and engaging in discussions to find practical solutions to the difficulties they were facing.

These pre-budget consultations continued online until very recently. The response rate and comments received were tremendous. With over 200,000 interactions with Canadians and more than 500,000 online submissions, this has been the largest pre-budget consultation on record.

Throughout the course of these consultations, Canadians confirmed that they wanted a government that delivered on strengthening the middle class and helping those working hard to join it, and we will deliver.

Our plan to grow the economy is now more important than ever. As the minister reiterated at the finance committee and in the House, the other parties' balanced budget proposals would have led to massive cuts at a time when the economy needed more investment. Cuts at this time would have led to more layoffs and less flexibility.

After 10 years of weak growth, we have a plan to grow the economy. As Bill C-2 clearly demonstrates, we have already started. It is a plan that we are proud to put forward and proud to be implementing. I know some in the House disagree, and members on our side will be happy to hear their perspective and happy to debate them. However, ultimately, we will not be deterred from implementing a plan that will help Canada by investing in it and in its talented, resourceful, and well-educated people.

The tax relief proposed in the legislation will help millions of Canadians. It will give middle-class Canadians more money in their pockets to spend, invest, and grow the economy. I encourage all members of the House to vote for this important legislation.

The House resumed from February 1 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.

Business of the House

[Dominic LeBlanc, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will continue with debate on the opposition motion that we began this morning.

Tomorrow, we will have the final day of debate at second reading on Bill C-4, concerning unions. I would like to note that the votes relating to this bill will be deferred to the end of the day on Monday, March 7, pursuant to an order adopted earlier today.

I want to sincerely thank my colleagues in the House for their co-operation in finding an agreement on this matter, and also on the ISIL motion, which was debated earlier this week.

Next week, as my colleague indicated, members will be working in their ridings.

On Monday, March 7, we will resume debate, at second reading stage, of Bill C-2 concerning a tax cut for the middle class. I would like to inform the House that Tuesday, March 8, will be an allotted day. On Wednesday, we will begin debate at second reading stage of Bill C-6 on citizenship, which was introduced this morning by my colleague, the Minister of Immigration, Refugees and Citizenship. On Thursday, we will begin consideration of Bill C-5 concerning public servants' sick leave.

Finally, Mr. Speaker, I know that you have been looking forward to this. Pursuant to Standing Order 83 (2), I would ask that an order of the day be designated for the Minister of Finance to present the budget at 4 p.m., on Tuesday, March 22, 2016.

Employment Insurance

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I appreciate the question from my colleague across the way. I believe I did make reference to that aspect of the program in my speech, when I said we supported a proposal that would allow workers to choose which system benefited them individually.

What we have before us today is a motion. The real meat of the issue has to come in the form of legislative change. I would have preferred to have seen that legislative change come in Bill C-2, but unfortunately, the member's party had other methods that it wanted to pursue. Many of the changes we are proposing can be brought forward in a government bill. We do not need to wait for the budget. If we are serious about immediate action for those who are suffering, the government should bring us a bill, show us something we can work with, and we will look at some amendments if necessary.

Business of the House

[Dominic LeBlanc, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I know colleagues look forward to this every week. I will be brief.

This afternoon, we will continue with the debate on the Conservative opposition motion.

Tomorrow, we will resume debate on government Motion No. 2, which was moved by the Prime Minister yesterday, concerning Canada's fight against ISIL.

I am currently negotiating with the House leaders of the other parties to come to an agreement on the length of the debate. We will continue debating that motion next Monday and Tuesday. If we manage to conclude the debate on Tuesday evening, on Wednesday we will proceed with second reading of Bill C-2, an act to amend the Income Tax Act.

Finally, Thursday of next week will be an allotted day.

Canada Labour Code

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

Madam Speaker, the member always has very insightful questions in this House.

I cannot put myself in the shoes of the new government, and I certainly would not want to be in those shoes. However, if we look at the first 100 days—and there is a snazzy video out on the first 100 days—we can see the legislative agenda.

Bill C-1 is a formulaic administration-of-oaths bill; Bill C-2 was tax increases and the elimination of the TFSA; Bill C-3 was a massive injection of spending, in large part to cover a promise on the Syrian refugee resettlement; Bill C-4 is the unwinding of labour modernization from the previous Parliament, clearly a quid pro quo for support during the election; and Bill C-5 is undoing the sick day negotiation with the public service.

If we look at the legislative agenda of the new government in the first 100 days, it is tax, spend, and support the friends who got them into office. Contrast that with the previous government's first 100 days. There was the Federal Accountability Act, child care benefits for all families, and a GST reduction. It was about giving back to Canadians, not taking away.

Business of the House

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I will be sharing my time with my colleague from Mississauga—Lakeshore.

It is a privilege for me to be here to participate in this important debate on today's motion.

I would like to reassure my hon. colleague that we have complete confidence in the abilities of the dedicated officials at the Department of Finance, who are currently working on the 2016 budget.

I can say that our budget will flesh out our plan to grow the economy, a plan that has the support of the Canadians who gave us a majority mandate last fall.

First of all, the government believes that all Canadians should have real and equal opportunities to succeed. This will be achieved by strengthening and growing the middle class. That is what we said throughout our election campaign, and that is what we are offering Canadians.

It will come as no surprise when I say that Canada is going through tough economic times. Although the recent U.S. economic performance is encouraging, emerging economies, especially China, are cause for concern.

Many analysts were counting on emerging economies, such as Brazil, Russia, India, China, and South Africa, to help stimulate economic growth. We now know that this will unfortunately not be the case.

Canada's economic performance was weak in 2015, which can primarily be explained by last year's drop in the price of oil. Make no mistake about it, the Government of Canada will post a deficit for the 2015-16 fiscal year, and this deficit is the result of what the previous government did and did not do. That is a fact.

The previous Liberal government left a $13-billion surplus in 2006. The Conservative government wasted this surplus and racked up more than $150 billion in additional debt, all the while managing to achieve the worst growth record since the Great Depression. Those are facts.

Our colleagues have told us all kinds of tales this morning, but what I just said is the truth. All of that, with no plan to grow the middle class, no plan to invest, and no plan for growth. That is the Conservative government's disastrous record.

It is quite likely that the global economy will remain unfavourable in the future and that the price of commodities will remain low. There is no doubt that, as we begin to put our plan for economic growth and long-term prosperity into action, we are up against fierce headwinds.

However, in the face of this real challenge, there is also real opportunity to put in place the conditions to create long-term growth. This growth will create good jobs and help our middle class, the lifeblood of our economy, to prosper.

This is a good time to make targeted investments to support our country's economic growth. However, I want to be clear. We are going to focus on smart investments that promote economic growth while maintaining a commitment to fiscal responsibility.

We intend to focus on two particularly challenging issues. The first is restoring economic progress for the middle class, the backbone of our economy. We simply cannot claim that our country is prosperous if our middle class is having trouble making ends meet.

That is why the government followed through on its promise by making a tax cut for the middle class the first order of business on December 7, 2015. I am proud to say that, as of January 1, approximately nine million Canadians are receiving significant tax relief. This is a fair measure, and it is the smart thing to do for our economy.

In order to achieve this goal, we introduced Bill C-2, an act to amend the Income Tax Act.

This bill is merely the first step in our plan to grow the economy in the long term, create jobs, and help Canada's middle class prosper.

More specifically, Bill C-2 will cut the personal income tax rate, dropping it from 22% to 20.5%, and establish a 33% tax rate for individual taxable incomes above $200,000. We are asking the wealthiest Canadians to contribute a little more.

Lastly, we are lowering the annual contribution limit for tax-free savings accounts, TFSAs, from its current $10,000 back to its previous amount, which was $5,500, and we are also reinstating the indexation of that limit. Our middle-class tax cut and the accompanying changes will help make the tax system fairer. As I mentioned, this bill is just the beginning of our government's measures to grow the economy.

In the next budget, we will introduce the new Canada child tax benefit, another important measure that will provide increased support to the vast majority of Canadian families and help lift hundreds of thousands of children our of poverty. That is right, I said hundreds of thousands of children. Unlike the existing program, the Canada child tax benefit will be simpler, more generous and more targeted to those who need it most. Plus, it is tax free.

Together, these measures will help strengthen the middle class and help those who work hard to be a part of it. As a result of these measures, Canadians will have more money to save, invest, and help grow our economy. More generally, these measures will stimulate economic growth at a time when the global economy is cause for concern, to ensure that all Canadians will benefit.

The second challenge we are facing, and this may be the biggest one, has to do with creating the conditions for strong, long-term economic growth. Smart, targeted investments in infrastructure are essential to stimulating economic growth. Furthermore, now is the time to invest, while interest rates are at all-time lows.

Canadians made it clear that they want real change. They want their government to govern differently. They want to be able to trust their government and they want leadership that is focused on what is most important to them.

We are listening. Since early January, the Minister of Finance and I have been criss-crossing the country holding pre-budget consultations organized by the Department of Finance. We have gathered some very good ideas and excellent comments. Canadians have told us that they are concerned about the state of our infrastructure, including bridges, roads, public transit, sewers, and seniors' homes.

Canadian cities are growing rapidly, and all levels of government are facing the same challenge: making infrastructure investments that generate economic benefits for Canada and promote sustainable urban environments.

Over the next decade, we will invest $120 billion in public infrastructure. Our investments will focus on making life better for Canadians and developing more lucrative business opportunities for our exporters.

To ensure that we are making strategic investments, we will work with the provinces and territories to address their most urgent needs. That is what Canadians expect of us. They want us to work together to make progress and begin building a better Canada.

A number of initiatives are important to our government's growth strategy for Canada. First, environmental sustainability will be central to the development of our natural resources sector. Together with our North American partners, Canada can and should be one of the most efficient and responsible energy producers in the world.

We will also support growing businesses to help them attract the talent, capital, and innovation they need to capitalize on business opportunities in the global market.

We will work with the provinces to develop a skills and labour strategy that promotes greater participation of under-represented groups.

We will work with the provinces and territories to improve the Canada Pension Plan and help Canadians achieve their retirement income security goals.

These are important objectives that can have a significant impact on our long-term growth.

In closing, there is no quick and easy solution. We are lucky to live in such a diverse and prosperous country. However, the challenges we are facing today are real and to overcome them we must find common ground despite our different points of view. I can assure my colleagues that our government is prepared to meet these challenges.

Opposition Motion—Department of Finance

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, to begin, I would like to address today's motion and reassure the hon. member that we support the officials in the Department of Finance. They are consummate professionals who are working hard drafting our government's first budget. Like the members on this side of the House, they know that a snapshot in time is just that. It does not tell the whole story. It is like looking at one's bank account before paying the bills.

Let us make no mistake. The projections outlined in the economic and fiscal update show that there will be a deficit in budget year 2015-16 as a direct result of the previous government's failure to prepare for a downturn in global oil prices and volatility in the global market.

Happily, we have a plan. After 10 years of weak growth, this government has a plan to grow the economy and create jobs by focusing on the middle class, investing in infrastructure, and helping those who need it most.

As the Prime Minister recently said, we fully intend to take all means necessary to support an economic growth strategy that will benefit all Canadians.

Our government was elected on ambitious economic measures. We know that there has never been a better time to make targeted investments to support economic growth. If the members opposite are patient, we will certainly provide them with our vision for the future and the details of these targeted investments.

Let me describe our starting point. As we embark on an agenda of economic growth and long-term prosperity, there is no doubt that we are facing considerable headwinds. Globally, we continue to experience what the International Monetary Fund's managing director, Christine Lagarde, famously called the “new mediocre”. In its latest world economic outlook, in January, the IMF said that it expects global growth to pick up modestly to 3.4% in 2016 and 3.6% in 2017. This is down 0.2 percentage points for both 2016 and 2017 compared to the October 2015 world economic outlook.

Although the recent performance of the U.S. economy is encouraging, the emerging economies, especially China, are causes for concern. Global crude oil prices remain at levels less than a third of what they were mid-2014, reflecting a persistent global oversupply and softening demand. What is happening beyond our borders has real and tangible effects for all Canadians.

In Canada, our economic performance in the first half of 2015 was poor, mainly due to collapsing oil prices in 2014. It has become obvious that growth in Canada will be lower than was expected in the previous government's last budget projections, in April 2015. This, of course, has important implications for our current fiscal situation. Indeed, the Department of Finance's own numbers in the economic and fiscal update, tabled in this House, show this. I find it strange that the members opposite only seem to respect the numbers from department officials when they feel that they can score political points with them. I urge them all to review the economic and fiscal update, and in the spirit of respect for this country's public servants, admit that they are dead wrong in believing that we will not be in a deficit by the end of this fiscal year.

The previous Liberal government left behind a $13-billion surplus in 2006. The Conservative government squandered the surplus and accumulated an additional $150 billion in new debt while still managing to deliver the worst growth record since the Great Depression. The “Fiscal Monitor” referred to in the member's motion is a snapshot in time and does not tell the full story.

Tough economic times call for bold measures to support the middle class and those working hard to join it. We in the government are prepared to implement these measures.

We maintain an enviable position here in Canada, with a low debt-to-GDP ratio, abundant natural resources, and one of the most educated and talented workforces in the world. Keeping our debt-to-GDP ratio on a downward path throughout our mandate remains a central plank of our economic agenda, alongside balancing the budget by the end of our mandate. To achieve this, our policies will strike a balance between fiscal responsibility and our commitments to Canadians.

One of the most important pillars of our plan is strengthening our middle class, the backbone of our economy, whose members have gone too long without a raise. This is why one of the government's first orders of business was to table a notice of ways and means motion to cut taxes for the middle class. We would cut taxes for nine million Canadians by asking the wealthiest 1% of earners to kick in just a little more. This is the right thing to do and the smart thing to do for our economy.

The middle-class tax cut and the accompanying tax changes would help make taxes fairer so that all Canadians would have the opportunity to succeed and prosper. I am pleased to note that Bill C-2, the bill to implement these measures, is now being debated in Parliament. The middle-class tax cuts would mark an important first step in our plan for economic growth.

Going forward, the government will introduce proposals in the budget to create a new Canada child benefit. Changes under the new child benefit would begin in July 2016. In addition to replacing the universal childcare benefit, which is not tied to income, the proposed Canada child benefit would simplify and consolidate existing child benefits while ensuring that the help is targeted to those who need it most.

Taken together, these measures will help strengthen the middle class and those working hard to join it, putting more money in their pockets to save, invest, and grow the economy. More broadly, they will help grow our economy in the context of a difficult global economic climate so that all Canadians benefit.

The second challenge the government faces, and the most important one, is creating long-term conditions for strong and durable economic growth. The international community, as well as leaders right here at home, have more or less arrived at the same conclusion: targeted investments in infrastructure are key to driving economic growth. With interest rates at historic lows, now is the right time to invest. Canadian cities have been growing at a rapid rate, and all governments have a shared challenge in making investments in infrastructure that create economic advantages for Canada and more sustainable urban areas.

For the next decade, we will make investments in social infrastructure, like affordable and seniors' housing, in green infrastructure, like water-treatment systems, and in public transit. We have pledged to make historic investments in Canadian infrastructure, and we intend to follow through. These investments will aim to get Canadians moving and will open more cost-efficient trade options for our exporters. These are big, meaningful measures that can have an significant impact on our long-term growth.

Unlike the previous government, we do not intend to recklessly add to the national debt on the backs of our children and grandchildren by making reckless and politically motivated investments. Rather, we intend to make smart investments that will build an even more prosperous country for our children and grandchildren.

Given the government's clear objectives listed today, I would strongly encourage hon. members to support the government in our efforts to strengthen the middle class and grow the economy.

Income Tax Act

[Matt DeCourcey, Liberal, Fredericton, NB]

Mr. Speaker, it will come as no surprise when I say that Canada is going through tough economic times.

However, along with this real challenge, we also have a real opportunity for establishing the conditions needed for long-term growth, which in turn will create good jobs and contribute to the prosperity of the middle class, the lifeblood of our economy.

First, I would like to elaborate a moment on our government's ambitious economic agenda that sets Canada on the path for economic growth. Our government believes that all Canadians should have a real and fair chance to succeed. Central to that success is a strong and growing middle class, but in the face of this real challenge, there is a real opportunity to put in place the conditions to create long-term growth.

We were elected on a plan to grow the economy, and we have already started by introducing this tax cut in December. From infrastructure investment to responsible environmental stewardship, we are providing needed leadership. Our priority is to strike a balance between fiscal responsibility and delivering on our commitment to Canadians.

Indeed, we fully intend that our plan for economic growth will benefit all Canadians through targeted investments. Let me reassure the House that the government is not daunted by the challenges before us. We are cognizant of our fiscal reality.

Before turning to the content of Bill C-2, I would like to mention that the government's plan will include introducing proposals to create a new Canada child benefit. This new, tax-free, income-tested benefit would lift hundreds of thousands of children out of poverty. In fact, nine out of 10 Canadian families would be better off under this plan. We aim to have payments under the new Canada child benefit begin in July 2016.

The proposed Canada child benefit would simplify and consolidate existing child benefits. It would replace the universal child care benefit, which is not income tested. As we have committed, this new Canada child benefit would be better targeted to those who need it most.

We also recognize that public investment is needed to create and support economic growth as well as job creation and economic prosperity, which is why we will make significant new investments in public transit, green infrastructure, and social infrastructure. We will work together with both the private sector and our provincial and municipal counterparts to advance our shared priorities across a range of fronts.

Here are some of the areas. We will make targeted investments in public infrastructure that would grow the economy, get Canadians moving, and open up more cost-efficient trade options for our exporters with a focus on public transit, green infrastructure, and social infrastructure.

We will also work together with all of the provinces and territories for a cleaner environment and to fight climate change. Canada has a plan to invest historic amounts each year in green technology producers, so they can tackle Canada's most pressing environmental challenges and create more opportunities for Canadian workers. The government will also invest to support innovation and the use of clean technologies in forestry, fisheries, mining, energy, and the agricultural sector.

We will support our communities and our economy by making significant new investments in green infrastructure and clean technologies. Not only will these strategic investments help us tackle climate change, but they will create jobs. Canadian businesses now have an incredible opportunity to be a part of the solution and to help build a low-carbon economy. The government will prove to Canadians and to the world that a clean environment and a strong economy go hand in hand. In fact, we cannot have one without the other.

Protecting the environment and growing the economy are not incompatible goals, and in fact, our future success demands that we do both.

We are committed to a strong and growing middle class, and we want to ensure that all Canadians have a fair and real chance to succeed. This is why our government has enacted legislation to deliver a tax cut to the middle class. This is the fair thing to do and the smart thing to do for Canada's economy.

That is why Bill C-2 is so important for all Canadians.

I would now like to talk about the specific elements of Bill C-2. Our tax cut for the middle class and the accompanying proposals will make the tax system fairer by reducing the second personal income tax rate from 22% to 20.5%; introducing a personal tax rate of 33% on individual taxable income in excess of $200,000; decreasing the $10,000 maximum contribution to a tax-free savings account to its previous level of $5,500; and reinstating indexation of this ceiling.

Recently the Minister of Finance, his parliamentary secretary, and MPs across the country fanned out asking Canadians directly what our government could do to better support them. They met with indigenous leaders, business leaders, and cultural leaders, all with the intent of listening to Canadians and engaging in discussions to find practical solutions to the difficulties we know they are facing. These pre-budget consultations continue online. The response rate and comments received have been absolutely tremendous. With over 146,000 Canadians reached to date, this has been the largest pre-budget consultation on record.

Through these consultations, Canadians confirmed that they want a government that will deliver on strengthening the middle class and that will help those working hard to join it. This legislation would help do just that, and that is why it is a priority for the Government of Canada.

During the pre-budget consultations, it also became increasingly clear that Canada's economic outlook has changed since the election. This only reaffirmed the government's commitment to the path we were elected to follow. More importantly, by engaging with Canadians, we have been able to consider new perspectives and refine our plans that will be included in the federal budget.

The government's approach to consultation recognizes that collaboration is essential to delivering real change. The government has committed to, and has already demonstrated, its willingness to listen, engage, and collaborate with members from all parties to identify ways to find solutions and to avoid escalating conflicts unnecessarily.

Given that we have already heard from Canadians and many members of the other parties, I look forward to discussing and debating how best to serve Canadians.

There has never been a better time to make targeted investments to support our country's economic growth. We are confident in our plan to achieve that goal. That is the main reason why I am optimistic about our future prospects. I therefore encourage all members to support this bill.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I would like to thank the hon. member for Milton for leading Canada's official opposition on this file as our finance critic.

I can say without hesitation that Bill C-2, as it stands now, would have a significant affect on the lives of Canadians. While the Liberal members opposite would argue that the bill would benefit Canadians by lessening taxes on the middle class and increasing taxes on wealthy Canadians, the bill would in fact hurt Canadians more than it would help.

Do not misunderstand me. As a Conservative, I am very much in support of keeping Canadians' hard-earned dollars in their pockets. Our Conservative government endeavoured to do just that. It let Canadians keep more of their hard-earned money. We have a proud legacy of tax fairness and cutting taxes. While in office, our Conservative government reduced taxes more than 140 times. We did so through targeted measures that were responsible and consistent.

However, there is a significant difference. Bill C-2 would end up costing $8.9 billion over the next six years. Do not just take my word for it. A Parliamentary Budget Officer's report, “The Fiscal and Distributional Impact of Changes to the Federal Personal Income Tax Regime”, says the exact same thing. The PBO made it clear that these changes would lower taxes for a significant number of Canadians and increase them for just 1.5% of the population, which would result in a cost of $8.9 billion to Canadians over six years.

The PBO estimates that the tax changes would cost $400 million this year and $1.7 billion in the subsequent years. Since the government inherited a $400 million surplus, it has squandered the surplus already. I hear jokes already, but it is in the PBO report. This happened in only four short months.

How can the government claim that it is a good idea to commit more money to programs and tax breaks when it is not fiscally responsible to do so? We all know that eventually the money does run out. There is only one taxpayer. I am interested to know what the Liberals have planned at that point. Would they increase taxes on Canadians, or would they cut service levels? Perhaps they would cut some programs altogether. Perhaps they could leave this mess for our next generation to deal with. However, the next time I speak with the students in my riding, whether they be from Lindsay, Kennington, Haliburton, or Millbrook, I guess I should warn them to start saving now since they will be paying not only their bills but ours as well.

Many of my colleagues have gone through the amendments in the bill thoroughly so I will not rehash all of them, except to say that an extra $6.34 a week for those individuals who qualify is not enough income to grow the economy, nor does throwing money at the middle class stimulate growth and innovation. I am suggesting that the government should be less worried about the income tax rate and focus more on creating jobs so more people would be paying in. These modifications to the income tax rate hardly qualify as significant tax relief for Canadians, and come with a much larger price tag. The Liberals promised that their tax plan would be revenue neutral, and clearly it is not. This is yet another example of broken Liberal promises.

A tax hike for the wealthy, they say. The new Liberal plan would raise taxes on higher income earners, those who traditionally create jobs and grow our overall economy. By increasing taxes on these job creators, we are discouraging success, while doing nothing for those making less than $45,000 a year. Many in my riding are in that category.

I will now touch on how the changes to the tax-free savings accounts, or TFSAs, come into play. Tax-free savings accounts allow Canadians to set money aside in eligible investments and watch them grow tax free. While meeting with my constituents, many of them spoke to me about the value of their tax-free savings account. Whether they used it for saving for a child's tuition fees, a home renovation, opening a small business, or saving for a family vacation, all of these constituents were able to use their tax-free savings account to save their money. Their savings, in turn, stimulate the economy, whether it is paying for the costs associated with university or college, paying a contractor for home renovations, or buying supplies to open up a business.

In my riding, the towns and communities are driven not only by agriculture but also by tourism. Whether it is places like Sir Sam's ski hill near Eagle Lake, Happy Days Houseboat Rentals in Bobcaygeon, or even Emily Provincial Park near Omemee, these and many other small businesses across my riding and across the country could benefit from an increase in tourism.

Giving Canadians a mechanism in which to save money can and will stimulate the economy. I would be remiss not to mention that this bill still leaves $5,500 in contribution room. However, why put such a low cap on a program that not only helps Canadians and their families, but also benefits the wider community?

The members opposite have argued that TFSAs only benefit the wealthy. However, we all know this is not true. The majority of tax-free savings accounts belong to low and middle-income earners. In fact, two-thirds of tax-free savings accounts are held by people with incomes less than $60,000. Why is the government trying to limit the choice of Canadians on how they choose to save their money?

Canadians are taking on a significant amount of debt lately. Instead of trying to help, the government is taking away one of those methods in which they can save. Bill C-2 would increase the national debt, penalize those who have worked hard and prospered, while also limiting the amount that Canadians can save, while doing nothing for those earning less than $45,000 a year.

The Liberal government inherited a $400 million surplus. We, as the official opposition, will continue to protect the hard-earned money of Canadians from the high-tax, high-spend agenda of the government. We all know we cannot spend our way to growth, and we cannot tax our way to prosperity.

I look forward to questions from my colleagues.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, it is my pleasure to rise today to speak in support of Bill C-2, An Act to amend the Income Tax Act. As stated on January 29 by my hon. colleague, the member for Toronto Centre, Bill C-2 would help strengthen and grow the middle class, as promised in the government's election platform. Bill C-2 would deliver on that promise.

All hon. members of the House have heard about widening income inequality. On January 1, 2016, Canada's highest-paid CEOs had already earned what most Canadians earn in an entire year. With this growing gap between extreme ends of the income scale, the people who are squeezed the most are the people in the middle-income group. They are the Canadians whose real take-home pay packages have been declining, and these are the Canadians who contribute to the economy and pay their taxes and spend money so the economy can keep growing. This is the group that we would like to address with our tax cuts.

My colleagues and I have been conducting town hall meetings for this pre-budget consultation. We have engaged thousands of people and continue to do so. Resoundingly, the people who have attended the town halls have been telling us that the tax cuts we are proposing are a good move. It is the first move toward prosperity for all. However, constituents also know that the rhetoric from the Conservatives is just that. It is filled with fallacy. So they want me to get some facts right.

The Conservatives had the worst job-creation record since 1946, the worst economic growth in G7, and the worst budget deficits, with some eight deficits in a row. According to Mr. Jim Stanford and Jordan Brennan, “it turns out that the economic record of the [previous Conservative] government is actually the worst of any government since World War II—and by a wide margin”.

The first order of business this government therefore undertook, as promised in our platform, was to cut taxes for a majority of Canadians. We promised to invest in infrastructure, in physical and social infrastructure as well as green technology. Throughout the debate today, the Conservatives have been talking about job losses and want the Liberal government to clear up the mess the previous Conservative government created over 10 years. We are not magicians; in 10 weeks we cannot do that. However, there is something that we can all do together. As a person who works in the financial field, I always advise my clients to diversify and not to put their eggs in one basket. This is common sense. Unfortunately, the previous Conservative government did not believe in wider diversification.

The resource industry is an important industry, but it also needs investment in research and development to help it diversify. If the previous government had diversified the energy sector, the creative people who are intelligent would have been able to move to different areas of work, like in the clean-technology environment, and we would have maintained our market share of the clean-energy sector, which was at 74%, but we have lost it.

Canadians are intelligent, smart, and resilient. Therefore, we would like to improve economic growth for everyone by working with everyone. I hope the hon. members opposite will support this because it is a move in the right direction. We said that we would cut taxes for 90% of the people, invest in infrastructure, create good jobs, and invest in children.

Bill C-2 helps these Canadians directly by lowering the income tax rate they pay. The passage of Bill C-2 would reduce the income tax rate from 22% to 20%, and this change alone would benefit approximately nine million Canadians whose taxable income is between $45,000 to $90,000. I personally know many people in my riding of Don Valley East who would benefit from this well-deserved tax cut.

In my riding, the majority of people do not earn more than $50,000. That is what we call the “middle income”. They need the help, and with our tax cuts plus the investment in the Canada child benefit, people will move out of poverty and into economic prosperity, which will help them pay taxes and help the economy grow.

Several international organizations, such as the World Bank, the IMF, and the OECD have concluded that growing income inequality is a hindrance to economic growth. In its report entitled “Alternative Federal Budget 2015”, the Canadian Centre for Policy Alternatives found that the top 1% income earners in Canada pay less in income tax than the poorest 10%. That is unfair, which is why we have created a new category for that 1% earning $200,000 and more.

Our government has taken the bold step of bringing about a progressive taxation system. I have been to many think tanks, and as a tax consultant myself, people have been telling me that the boutique tax cuts that the previous government made deprived the treasury and benefited only a handful of people, and that is totally unfair. It is why we see ourselves in the situation we are in. It is because the previous government lacked common sense or economic sense.

The other aspect of Bill C-2 that I would like to address is income splitting. There has been much misunderstanding on this, and I will set the record straight.

Bill C-2 does not apply to pension income splitting for our senior citizens. The repeal of income splitting will only apply to a small group of families. According to the commentary from the C.D. Howe Institute, only 15% of the population benefits from this, which is why the late Jim Flaherty, the minister of Finance for the Conservatives, did not believe in it.

Bill C-2 contains critical building blocks, which are necessary to restore fairness and progressiveness in our income tax system. It would provide our government with revenues that would otherwise have been hidden from taxes to invest in people and make the economy grow.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I thank my colleague for his speech. I also thank him for saying that he supports Bill C-2.

I understand that his political party believes that Quebec should be an independent country. In his speech, he said that Quebec did not need the federal government and that his people were trapped in a federation. Twice, in two referendums, our people voted to remain in Canada.

After two referendums and a number of provincial and federal elections in which our people decided to stay in Canada, why does he still believe that the desire and will of the people of Quebec are not respected?

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I enjoyed listening to my hon. colleague, except for his political manifesto. It is time to set the record straight.

To say it in English, we need to set the record straight.

First of all, I applaud my hon. colleague's intervention, since he indicated that the Bloc Québécois plans to support Bill C-2. That is the right thing to do. This bill will help the middle class.

When I heard my colleague use a word like “insignificant” to describe a bill that will lower taxes for nine million Canadians, I found that insulting, especially in this House, to the middle-class people I represent from Saint-Maurice—Champlain, which has one of the lowest per capita disposable income averages in Quebec. When the government shows that it cares about the middle class by proposing a measure that will reduce taxes for nine million Canadians, that is not insignificant.

Furthermore, my hon. colleague must have noticed that the measure set out in Bill C-2, the middle-class tax cut, was merely the first step. The upcoming budget will include the Canada child benefit, which will benefit nine out of 10 families.

While the federal government is taking steps to help the middle class, what would my colleague propose to help the middle class?

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, I am pleased to participate in today's debate on Bill C-2, the government's tax bill. I would like to begin by saying that we will vote for this bill.

We will vote for this bill, but not because it is excellent; it is not. It is actually rather insignificant, but it is slightly less bad than the status quo that the Conservatives and the NDP were championing during the recent election campaign.

This bill gives effect to the ways and means notice that was hastily tabled before the holidays as a gift to taxpayers. It implements just one of the tax measures that the government promised, and not necessarily the best one.

Objectively, there is little or nothing to justify separating this tax measure from the other tax measures in the upcoming budget and rushing to introduce it before Christmas, nothing but partisan motives.

The government had to do something, anything, to convince people that it intended to keep its promises. It had to do something, because the Liberals have a long history of failing to make good on promises.

The previous Liberal government promised to abolish the GST. It did not. It promised to tear up NAFTA. It did not. It promised to be the government of honesty and transparency. It gave us the secret national unity fund, the sponsorship scandal, and Alfonso Gagliano as minister in charge of government operations. It promised to be the government of growth. It cut transfers to the provinces so drastically that it practically sent Quebec into bankruptcy.

The government had to do something, anything. That something is Bill C-2, which we are currently discussing.

Taxation should be looked at as a whole. It is only by looking at all the tax measures, tax credits, exemptions, benefits, in fact all tax measures, that we can measure a government's performance when it comes to wealth, the middle class, families, and those who are hurting, struggling to pay their bills and make ends meet.

Here we have a government proposing a measure in isolation that will affect a minority of people. This bill proposes to raise taxes on those who drive a Bentley in order to provide relief to those who drive a BMW.

Above $200,000 of taxable income, the marginal tax rate jumps to 33%. This increase will affect the richest 1.4% of taxpayers. No one can disagree with that. The wealthiest 1%, in particular the wealthiest 0.1%, continue to hold a growing share of our society's wealth. That is a problem. They are holding an increasingly larger slice of the pie, while the middle class and other classes continue to get poorer.

On the other hand, Bill C-2 would drop the tax rate for incomes between $45,000 and $90,000 from 22% to 20.5%. The government claims that this mini-reform will provide relief to the middle class, but the kicker is that this measure does not provide any relief to the middle class. According to figures from Revenu Québec, 74% of Quebec taxpayers earn less than $50,000. These people are the ones who really need a break, but Bill C-2 will not help them. The bill does nothing for most of the middle class, for most of the people who are represented here. Instead, this bill will help the majority of the people here in this chamber, who will be able to take full advantage. All of us here, in the House, will benefit from this bill.

According to Revenu Québec, only 5.2% of Quebec taxpayers earn more than $100,000. I find that this government has a rather strange view of the middle class.

Furthermore, the parliamentary budget officer believes that those subject to the tax increase will take steps to avoid it by changing how they report their income. In the end, the government will lose out. We know that without measures to combat tax havens, Bill C-2 will be ineffective for the most part.

As I mentioned, passing this bill will lead to a slight improvement over the status quo. However, it is not this bill, which is nothing more than a public relations exercise, that will determine whether this government really plans on helping the middle class and people of modest means. It will be the next budget.

The next budget will reveal whether the government really supports families by providing its new benefit, collecting enough taxes from those earning more than $100,000—such as MPs, especially by eliminating certain measures—helping seniors by increasing the guaranteed income supplement or by indexing pensions, and looking after the unemployed by making changes to the employment insurance fund and not plundering it, as has been done over the past 20 years.

There is another problem with taxation. I honestly do not think that the government is going to tackle this problem, and I do not believe that the other parties would tackle it if they were in power. I am referring to the fiscal imbalance. The federal government takes approximately 50% of tax revenue in Canada, but provides virtually no services. Consequently, it needs more money than necessary to assume its responsibilities. There are two consequences.

First, the federal government does not need to manage its money properly because it already has too much. Look at what happens when it starts to manage its services. It costs 150% more to handle an employment insurance claim in Ottawa than it does to deal with a claim for social assistance in Quebec. It costs 100% more to take care of a patient in a Veterans Affairs Canada hospital than it does in a hospital in Quebec. At that rate, we would go bankrupt if Ottawa was responsible for health.

Second, the provinces can barely keep their heads above water. While the federal government is spending $50 billion to build ships, and is also thinking about buying F-35s, Quebec universities are thinking of cancelling their subscriptions to scientific journals just to save a few pennies.

Nevertheless, I am convinced that if we were to ask the people of Quebec to choose between a good education and an F-35, the choice would be obvious. Unfortunately, they do not have that choice because the system for sharing tax revenue in Canada is broken and because the federal government has enough revenue to poorly manage its own jurisdictions and to stick its nose where it does not belong.

Since Canadians control the joint account, they claim the right to decide how Quebeckers will organize their own society even in areas where we are already supposed to be sovereign under the Constitution. That is a serious problem that is only going to get worse.

Since it is Quebec that will have to foot the bill for the aging population, our government, like all other provincial governments, is at risk of crumbling under the weight of the health care system, unless it brings in permanent austerity measures and shrinks the government.

The federal government will not be affected, and it will start raking in an obscene surplus. The parliamentary budget officer and the Council of the Federation have stated that, 20 years from now, Ottawa will have paid back its entire debt accumulated over 150 years, but the provinces will all be virtually bankrupt. It is clear that from a taxation perspective, Canada is not working at all. This is creating tension and pointless quarrels, and it is depriving my people of the freedom they need to grow and flourish.

There is obviously one government too many in this equation. We think the superfluous government is the federal government. We will have to tackle this problem one of these days, and the sooner, the better. We have put off the inevitable long enough. The Bloc Québécois will make sure it happens.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am thankful for this opportunity to speak on behalf of my constituents. Like I did last time when I spoke on energy east, I am going to use a Yiddish proverb: the heaviest burden is an empty pocket. Lowering the tax on the middle bracket and hiking taxes on savings would empty the pockets of my constituents.

With this bill, the government would also defer taxation to another generation, because, by its own admission, it will run big deficits well into the future. Why are we punishing savers? The tax cut has the biggest impact on the highest income earners. They get full advantage, whereas others would get pennies on the dollar. Most importantly, the government's economic plan seems to involve sacrificing energy and resource jobs to satisfy and mollify opponents of major energy infrastructure projects. A Canadian without a job pays no income tax, and that is the truth for many of my constituents right now who are out of work. They cannot contribute to the national coffers, but, more importantly, they cannot do anything for their families, their loved ones, to earn income to pay for their daily expenses.

Albertans understand the value of thrift and frugality. I do not see those values on that side of the House. I see an insatiable appetite for deficit spending and debt bingeing. The Bill C-2 tax plan further offends the principle of equal pay for equal work. Let me explain.

Let us take two of my constituents, both welders. Many of my constituents happen to work in the trades. One of them works a standard 40-hour week and opts to forgo overtime to stay home with his family and take up coaching on weekends. The other welder decides to work seven days a week, three weeks on, one week off, and spends 14 or 16 hours per day working. This welder gives up time with his family, his kids do not see him, and it strains his marriage. Why does he do it? He does it because he believes it is worth the sacrifice for the reward. That is not an exception in Alberta.

Many families over the past decade have struggled with this choice between a higher income and the quality of life that it brings and family time at home. There exists no practical scheme of averaging incomes that can do justice to the author or inventor, artist or actor, or tradesman, who either sacrifice a few years with their family or reap the rewards of their craft after decades of effort in a few short years. Their extra effort is taxed more in those years. The income after tax does not purchase as many goods and services for their effort.

The purchasing power of these two welders varies significantly and the effort that each expends for the work should be fairly addressed by our income tax system. The tax scheme proposed in Bill C-2 punishes them all. Why are we punishing professionals and tradesmen who work extra hours, sacrifice their weekends with their families, and contribute more to our common prosperity? How fair is this? Bill C-2 punishes success and hard work. It says no to extra effort and to greater endurance at work.

Like other members have said, we know from the parliamentary budget office that the tax plan partially set out in Bill C-2 is not revenue neutral. The budget office confirmed what Conservatives have always been saying, and have repeatedly said today, which is that this tax plan, if we can call it a tax plan, would create an $8.9 billion budget hole by fiscal year 2020-21. The deficit spending of today is simply the deferred taxation of tomorrow. It is a tax hike of tomorrow on our children's futures.

In January 2009, the Conservative government announced a $63-billion economic stimulus. The opposition then crowed that it was not enough. It took many years of stewarding the economy and careful spending reductions to wrestle that deficit to zero. In fact, the “Fiscal Monitor” published by the Department of Finance showed that the outgoing Conservatives left the Liberals a $400 million surplus. That was in November. They are welcome.

Members on the other side of the House accused us of running deficits for the stimulus that they were demanding in 2008-09, the stimulus they threatened to bring down the government over. They wanted more spending, a bigger deficit, and more debt. Now they are about to embark on a spending spree with the taxpayers' credit card, totalling $125 billion over 10 years. This excludes, of course, all the other ill-thought-out promises they made in their platforms. It also excludes any potential emergencies, new policy initiatives, or new operating costs associated with this new public infrastructure that will be built, and on and on.

I am concerned that the government plans to run massive, long-term structural deficits, which would increase the tax burden on future Canadians and leave Canada more vulnerable to economic headwinds or economic shocks. It seems the answer from the other side of the House is that the next generation can pay.

I truly believe the worst part of this bill is the slashing of the TFSA in half. We know that 75% of tax-free savings account holders earned less than $70,000 in 2013. Nearly 700,000 seniors have a tax-free savings account.

It was the number one issue brought up to me while I was enjoying the Calgary Stampede, serving my constituents in New Brison, Cranston, and Auburn Bay. The number one issue that they brought to my attention was how much they enjoyed using the TFSA to plan for their future.

Past Liberal members of this House in 2008-09 criticized the TFSA when we introduced it for the first time as only for the 1%, but Canadians have proved them wrong. They were wrong then and they are wrong now. In fact, 11 million Canadians took advantage of the TFSA and said that the Liberals were wrong.

It is not just for retirement. It is also an excellent saving tool in general, because when done right, it allows Canadians to save tax free. The TFSA can be used to save for a post-secondary education, for a new car, to start a small business, or even for a down payment for a home. Here I think we can extend the analogy a little bit to buying a house.

An individual's investment in it is like a TFSA. An individual can pay for their house out of after-tax income, but any gains on the sale of a principal residence are tax free. If the individual cannot afford a house as an investment vehicle, the TFSA serves that role admirably. It is that intermediary goal between owning a house and something else as a savings tool.

Some Canadians use the TFSA to save for emergencies, and we in Calgary have experience with that. A BMO survey in September 2015 found that 66% of respondents had less than $10,000 available in an emergency. It is not about maximizing the use of the tax-free savings account. I understand many Canadians cannot reach the maximum, but it is about choice. It is about freedom of choice. It is about flexibility. It is about humility from the government to admit it does not have all the answers, and Canadians know best how to save for themselves.

Canadians understand their own personal needs much better than we do in this House, and some Canadians have chosen RRSPs. On average, 30% set aside money in an RRSP every single year, but 11 million Canadians have chosen a TFSA as their retirement service of choice.

Like many parents, I spend a lot time tyring to teach my kids the fundamentals of the economy so that they will understand the importance of saving their money, their income.

I will spend decades rewarding good behaviour and reminding them why it matters. We spend a lifetime teaching this to our children, but the government sends the opposite message when it slashes the TFSA. We have spent years promoting financial literacy at the federal level, and we prize financial literacy in our students, yet when it comes to creating and preserving efficient savings vehicles that facilitate savings, we slash them in half.

I wholeheartedly reject the notion that the TFSA has a public cost associated with this, as a cost to the treasury. We are taxing the savings of Canadians. It is not a cost to government. It is an unfair tax on those Canadians who want to save. It is taxing thrift and frugality. It is taxing those who plan for themselves and make choices for their own future. By slashing the TFSA in half, the government is simply moving the cost to private households, and that is wrong.

In closing, I heard someone on this side of the House say that this bill was an election promise, so the government has to go ahead with this ill-advised plan. However, one aspect of leadership is the ability to adapt to changing conditions. Conditions have definitely changed, especially in my province, Alberta. Cutting TFSA contributions is not a show of leadership. Instead, it will hurt Canadians' ability to save. Under a previous Liberal government, led by this Prime Minister's father, Canada's net debt rose from $18 billion to $206 billion, from 24% to 43% of GDP.

I encourage all members to vote against this bill. Canadian families are not here to support the government's frivolous spending.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the hon. member mentioned that many people in his riding do not have $10,000 a year to contribute to a TFSA, and I am sure he is right about that. He is right about that in part because so many people in his riding do not make the $45,000 a year that they would need in order to qualify for the Liberal tax cut in Bill C-2.

I am wondering if he could get up and explain to the House why it is that he will not support the NDP proposal to give tax breaks to people who make under $45,000 a year. Will he admit that he would be doing more for more people in his constituency if he supported our plan over what is presented in Bill C-2?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague from Elmwood—Transcona for his question.

It is true that many people had high expectations of this government. They were hoping to see a significant tax cut rather quickly.

The government is incorporating the tax cut into Bill C-2 for people who may not need it as much as others. People were expecting something better than this.

Many Canadian voters are probably now disillusioned with what the government is presenting to them, since all the government does is speak in future tense. Some people are still being left out, and it is important to mention these people, who may not have enough income to pay taxes, in the House. We do not talk enough about these people in the House.

I hope that the government will at least address these issues in the future. I know that I was asking the government not to speak in future tense. However, I urge the government to at least think of those who have lost their jobs, who might be receiving employment insurance, who are not as fortunate as others, or who simply cannot pay taxes because they do not have enough income.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I tend to agree with the member. My own conception of the middle class probably falls somewhat lower than transferring money from the high six-figure earners to the low six-figure earners, which unfortunately is what Bill C-2 would seem to do.

There are many people now who would have been in the middle class, however one would define that a year ago, but have lost their jobs. We have seen a lot of urgency put on Bill C-2, but not the same urgency put on reforms to the employment insurance program.

Could the member speak to how much that might have helped people who are no longer in the middle class because they do not have employment, but a year or two ago would have found themselves there?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased that my colleague mentioned income inequality, which is a very important issue for me and, I am sure, for my colleagues as well.

In my opinion, Bill C-2 does not do enough on that front. When Bill C-1 was introduced, we proposed a technical amendment, which would have been very easy to adopt. It was rejected. We wanted to reduce the tax rate on the first income bracket from 15% to 14%.

Everyone probably has their own definition of middle class, but it seems that the government has a rather broad definition. In my opinion, reducing the tax on the first taxable income bracket would have been better for the real middle class. In the NDP's plan, the people who would have saved the most tax by year-end would have been those who earn $45,000 a year.

Therefore, I am very disappointed that our plan was not accepted, because Bill C-2 will not help the middle class, but rather the upper middle class, if I may call it that.

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

Mr. Speaker, the member indicated that he would be supporting Bill C-2, and I am encouraged to hear that.

One of the things I would look to him to at the very least acknowledge is the fact that, in good part, the legislation addresses the issue of income inequality, which is very real. Many Canadians want us to address that. In doing so we would be affecting the middle class directly. The middle class would, in fact, benefit by the passage of this legislation.

Would the member not agree with that?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to rise today in the House, on behalf of the people of Sherbrooke, who put their trust in me for a second time. Since this is my first official speech in the House in 2016, I want to thank them for their renewed trust in me. It is a privilege to represent them here. I am also pleased to speak to Bill C-2, as national revenue critic for the progressive opposition, the NDP. I will provide a brief explanation of how our opposition to the current government is a progressive and constructive one, unlike the other oppositions in the House.

Bill C-2 amends the Income Tax Act, an extremely important and complex piece of legislation. It deserves all the attention we are giving it today. Earlier, I heard some government members talking about topics that are not in Bill C-2. I will try to stick as much as possible to what is in this bill.

I will start off by saying that my colleagues and I will support Bill C-2 because it has some good things in it. It does have some bad things though, and that is what I will focus on in my speech if the government does not mind. I will spend more time talking about the worrisome aspects of this bill.

The two main points I want to talk about are changes to income tax rates—the tax brackets that will be in effect if the bill passes—and changes to the savings plan known as the TFSA, the tax-free savings account. The bill introduces a change to reduce the limit, making it somewhat lower than what the Conservatives brought in last year.

Let me begin with the new income tax rates. Unfortunately, I had high expectations about these changes, and I was hoping to see some help for the middle class, but that is clearly not what we have here. Wealthy Canadians will benefit from the cuts, but 60% of Canadians will get nothing. That is disappointing. Canadian voters expected a lot from the government, as did I with respect to this first bill. The government promised that the middle-class tax cut would be the first item on the agenda right after the election. It is now clear that our definition of the middle class is very different, which is very unfortunate for Canadians who were so hopeful. They put their faith in the Liberals. They expected a lot from them, but unfortunately, it is clear from this bill that things are well below their expectations—and mine, too.

There is one other thing I just have to mention, something we have been hearing for a while and not just in today's debate. Since coming to power, the government keeps talking about the future. It keeps talking about a plan. It keeps saying that it will do something in the future and that it is going to tackle this problem or that—soon—and that we should not worry, because everything is coming. However, people need action now. I would have preferred to hear the government begin by talking about right now, talking about what it is doing and bringing in right now.

Unfortunately, in many of today's speeches, the Liberals are still talking about the future, about plans, and about what it intends to do in the future, when people have real needs now and they cannot wait until March or later to see these much-anticipated changes take place.

Why is it that we on this side of the House see that the proposed changes to the tax brackets as less than ideal? The Liberals are tossing around huge numbers, just as the Conservatives did. They are saying that nine million Canadians will benefit from this tax cut. That is a nice number. Everyone watching us at home thinks they are part of that nine million. The Liberals are talking about the middle class. They are saying that nine million people will benefit from a tax cut, but if you look at it a little closer, you see that you have to earn more than $45,000 a year. If you earn $45,000, you get only a $50 reduction. It may bring to mind a nice number when they say they are going to put more money in the pockets of nine million people, but some people might be expecting more than $50.

It is better than nothing, and that is partly why we are supporting this bill. However, many people are disappointed today because those who benefit the most from this measure have the highest tax rates. Accordingly, those who earn the most income have the most to gain.

Luc Godbout, from Université de Sherbrooke in my riding, is a renowned tax expert who often speaks about subjects we are called upon to discuss in the House. To illustrate that those who had the most to gain were those with the most money, he pointed out that with the new changes, a couple with a combined income of $250,000 would get up to $1,120 in tax cuts, whereas a couple with a combined income of $75,000 would on average get between $0 and $4 in tax cuts. My colleague mentioned this earlier. The numbers speak for themselves.

I want to be sure to talk about TFSAs because they are another reason we are supporting Bill C-2. I am talking about the change to the contribution ceiling for this somewhat contentious savings vehicle.

Many people use them for the right reasons. However, there have been documented cases of people using TFSAs as a way to avoid paying taxes. That is unfortunate because the primary objective of the TFSA is a noble one. Various studies have shown that some people are putting money that does not necessarily constitute new savings into their TFSAs. People are not always putting new money for their retirement into those accounts. Instead, they are transferring other assets into their TFSAs. They are simply transferring assets that they already have from one place to another to try to avoid paying taxes. It is unfortunate that some people have been using the TFSA that way. As many members have said today and as is quite obvious to everyone, only a very small number of people make the maximum contribution to a TFSA, and it is usually the wealthiest people who do.

When the Conservative government announced that it was going to raise the limit to $10,000, I had a hard time accepting it. I thought it was a bad decision. I am pleased to see that the Liberals are reversing that decision, and that at the very least, they are going to minimize the cost for future generations. It is important to mention that future generations would have had to pay exorbitant amounts if the government had kept the limit at $10,000. The parliamentary budget officer estimated that the fiscal cost could have reached approximately $130 billion by 2080. When we talk about future generations, I try to include myself in that. I would like to think that I will still be around in 2080. As a result, this increase in the limit really bothered me because it would have had a direct impact on tax revenue for future generations for years.

We must be careful and look at studies that also ask us to carefully consider what will happen with TFSAs, because this is a recent savings vehicle and it could have rather significant consequences for the tax system. Jonathan Kesselman came up with the idea for the TFSA in the early 2000s and together with a colleague whose name escapes me—I apologize for that—studied the possibility of a tax-free savings vehicle. In the article “Tax-Free Savings Accounts: Expanding, Restricting or Refining?”, which appeared in an issue of the Canadian Tax Journal in 2015, Mr. Kesselman presented some options to help the government realize the impact the TFSA could have and ensure that it will be a sustainable program for future generations.

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

Mr. Speaker, before I start, I want to quickly wish my eldest daughter a happy 16th birthday today.

In the member's speech, I did not hear a lot about Bill C-2. He talked about consultation with Canadians and going around the country. We know that the bill benefits 40% of Canadians, those who earn over $45,000. Those who do not earn $45,000, which is 60% of Canadians, were they consulted about this tax? If they were, I have a hard time believing that they would support this tax break.

The government has talked about setting its priorities and pushing those forward in the first 100 days. When are 60% of the taxpayers going to become a priority of the government?

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

Mr. Speaker, I would like welcome another new friend to this place and thank him for his question. To him as a member of the New Democratic Party, now that we are talking about the tax-and-spend concept, I would say that nothing underscores the difference between the three parties in this place better than this question. He looked at the TFSA changes and our increase causing a hole in revenues.

On this side in this party we do not see that as the government's money. Tax and spend decisions to us should be made in a way that takes the minimal amount possible from Canadians to give us the opportunity and the great services and quality of life we have here, while recognizing the trust that we are held to to spend that wisely and only take what is needed. This is not a hole in our revenue. This is Canadians' money. TFSAs are an example where we are saying,“You have made this money, you can save it and earn some income from investments without our taxing it again”. Or in the RRSP option, we defer that taxation.

That is what was so exciting about the TFSA. The fact that we have Bill C-2 and the fact that I have this question about holes in revenue underscores that only the Conservative Party really looks at this as Canadians' money that we were entrusted to spend on priorities and make decisions to make sure that we do not take too much.

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

Mr. Speaker, I am proud to answer that question from someone who indeed is a friend. We were all very happy to see him get through a difficult personal challenge with his health and return to the last Parliament and then get re-elected. I have a lot of time for the member and, as I said, nicknames are often terms of endearment. It is because we like Liberals that at the end of the day the tax-and-spend nickname is a nickname, but my goodness, with Bill C-2 they are confirming tax-and-spend as their strategy.

When it comes to the global recession of 2008-09, out of which Canada led the G7 in job growth and recovery, certainly we did run deficits. No one has hidden that at all, but we set a course to balance the books by fiscal year 2014-15, which takes decisions. As I said, leadership is not about always saying yes. Tony Blair was famous for saying that leadership is at times about saying no. My father who was a provincial member at Queen's Park coined that phrase long before Tony Blair, that sometimes it means saying no and saying why by setting priorities.

I hope with subsequent bills that come before this place that my friend and my friends will bring forward a plan that is more than just taxing Canadians, more than just reducing their ability to save for retirement. We need a vision that includes resources, that includes new Canadians, that includes a diverse economy to make sure that Canada stays on top.

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

Mr. Speaker, it is a pleasure for me to get up after my friend, the long-serving MP for Malpeque, who never lets the facts interrupt his rhetorical flights in this place.

I enjoyed the fact that he said, mere days after the revenue department confirmed a $1 billion surplus for November, that he still thinks that is fiction, even though the Parliamentary Budget Officer has confirmed that the previous government certainly left a surplus. It was so good in a tight global economy that despite the Liberals' best efforts, they are still accruing the surpluses in their first few months of government. The facts state that quite clearly.

I am very pleased to rise here today in relation to Bill C-2, an act to amend the Income Tax Act.

It is Bill C-2 for a reason. Probably the majority of members of the House are new members of Parliament. They may now know that the first bill, “an act respecting the administration of oaths of office”, is a formulaic standard bill that starts off a session. Therefore, Bill C-2 represents the top priority of a new government coming to office.

Bill C-2 would codify what the Liberals brought Parliament together for six days after they won the election in October of last year, which was to raise taxes on Canadians. Nothing suggests the priority of the current government better than Bill C-2, which is why I thought I would rise in the House.

What I find most ironic about Bill C-2, an act to amend the Income Tax Act, or an act to raise taxes, is that it confirms the age-old nickname for the Liberal Party in this place. A nickname is a term of endearment. I respect anyone who comes to Canada's Parliament, doing their best for the country, but Conservatives for generations, long before my colleagues or I have been here, have accused the Liberal Party of being the tax-and-spend party. What has happened is that the Liberals' early record in their first few months of government confirms that.

My friend from Malpeque confirmed that. He tried to suggest that it was fiction that the last government, the Conservative government, left Canada in a surplus position, but that is exactly what the Parliamentary Budget Officer confirmed last fall. In fact, the Finance Department confirmed the numbers from November of another surplus month. Therefore, the country was left with a modestly growing economy and a surplus.

The two things the government did in the short period of time it governed in 2015 were to make massive commitments for deficits, well above what the Liberals spoke to Canadians about during the election, and they raised taxes. This is one of those occasions for the pundits who often ask why the Conservatives call the Liberal Party the tax-and-spend party. It is because in the first three months of government, the Liberals are raising taxes and spending out of control. That is just the record that we are debating here today with their first bill coming to the House of Commons.

Why I think this is important is that it is setting a tone. This is not a bill that debates assistance or investments in a resource sector that needs some help, as well as the families affected by the downturn in resources prices. They desperately need help, and see mortgage payments on the horizon that scare them. It is not a bill about that.

The bill is about taking more from Canadians in the form of creating a new tax bracket in an already fairly complex tax code by taxing Canadians in the highest bracket more for income over $200,000. It is also a procedure to lower the amount that Canadians can shield from tax through the tax-free savings account by reducing the amount that people can contribute to that very popular device brought in by our previous government and my friend, the late Jim Flaherty, who was finance minister. This vehicle not only allows families of all income levels to save free of tax, but it is also very helpful for people approaching retirement. I heard that and still hear that daily. These are the two measures that are before us in Bill C-2.

Nothing concerns me more, not just as a Conservative but as a member of Parliament who came out of the business community before I was elected to office, than the new government's apparent lack of direction for our economy, even in its first few months.

Many of the members who were elected in October did not get a chance to see their Prime Minister when he was a third party leader. About a year ago, he refused to ever commit to running deficits. In fact, he took a position that was somewhat similar to what the government had adopted, because Conservatives worked hard over the course of many years, following the global recession, to balance Canada's books. Doing that requires decisions by government. Government is not intended to just say yes to everything, increase every budget line, and hire more people in every department. It has to set priorities, make decisions on spending, and look at the tax base to determine if Canadians can afford higher taxes in order to pay for more people in a certain department. These are the decisions of government.

A year ago the Prime Minister, then the third party leader, was committed to running a balanced budget, as was, of course, the Conservative government at the time, and it was not until an election campaign that it changed. For a few years, the fundamental economic position of the Liberal Party was one of fiscal prudence. In the middle of an election, there was a change in direction, a considerable change, perhaps for election advantage, perhaps because of a philosophical change, but it changed to running a $10 billion deficit. That was the commitment that the party talked about with Canadians. It was a temporary deficit of only $10 billion so that the government could fulfill some commitments and add some additional infrastructure money on top of the already substantial building Canada plan that the previous government had put in place.

Within the first few weeks of government, before the House was even called back in session and before you had the honour of occupying that chair, Mr. Speaker, that $10 billion commitment was already $20 billion. If we read the papers, as many members of the House did, a week or so ago, we now see the finance minister hedging perhaps two years of $25 billion deficits. Did Canadians vote for that? Did Canadians vote for the first two moves of the new government to go from a probably improper $20 billion deficit commitment to a $50 billion deficit commitment?

The new government's first act in this place was to raise taxes on Canadians, a tax increase that Liberals told Canadians would be revenue neutral. That is yet another promise that appeased people during the election campaign but was not met and has already been abandoned. Ironically, it was the C.D. Howe Institute, a think tank that the finance minister once chaired, that said that these tax increases would not be revenue neutral for a variety of reasons. From a public policy standpoint, those in the higher tax brackets are more mobile, so there could be a risk of driving more people out of Canada, out of our system of taxation.

I was reading just this morning in The Globe and Mail the great column by Konrad Yakabuski, who identified this tax increase as a risk to a lot of the tech entrepreneurs and growing sectors, as well as the fact they are going to treat stock options as income, which is another thing. Compounded with the fact that our dollar is going down, the government seems to be set on driving talent out of this country at a time when a lot of people are looking for an economic plan that is far more than a Keynesian tax-and-spend approach, with no strategic direction and at a time when it is actually hampering the increased revenues that are possible if we could get our resources to tidewater with energy east. There was a debate in the House last week when the Prime Minister seemed to be putting in place a system and series of consultations and reviews that would essentially mean that capital leaves Canada because of the uncertainty of our business climate.

It is with sadness that I rise today to say that Bill C-2 confirms the nickname of the Liberals as the tax-and-spenders of Canada. I certainly hope that subsequent bills start showing some real direction for the Canada of the future.

[Sheri Benson, NDP, Saskatoon West, SK]

Mr. Speaker, I want to note that Bill C-2 would provide maximum benefits to those wealthier Canadians, those earning between $89,000 and $200,000, while six out of ten Canadians would receive nothing. Although I appreciate that this is just one plank within a larger platform, or a first step, I feel it is a first step in the wrong direction.

Would the member comment on why the government does not look at reducing the lowest tax rate so many more Canadians will be helped rather than having a tax rate that helps wealthier Canadians?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it gives me great pleasure to share my time with the member for Glengarry—Prescott—Russell, who is my new neighbour in our offices in the Valour building.

It is really great to be able to speak on Bill C-2, an act to amend the Income Tax Act, which is really the first plank as we move to implement the commitments upon which we were elected. That plank was outlined in our platform of growth for the middle class. Our key message was real change, a new plan for a strong middle class. That platform specifically stated, as it relates to Bill C-2:

We will 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.

Bill C-2 follows through on that commitment.

However, I will say this. Having listened to the discussion thus far today, it is only one plank among many. It is the first plank, in terms of a package that will assist the middle class and assist prosperity in this country.

As stated in the summary of the bill:

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.

What does this mean?

What it really means is those with a taxable income of between $45,282 and $90,563 will see their current rate of taxation of 22% drop to 20.5%. That is a considerable saving for those individuals. We are targeting that group because they are a part of the middle class.

On the other hand, those with taxable income of over $200,000 will increase from the current rate of 29% to 33%.

In essence, what it really does is bring better fairness to the taxation system. It tries to lessen the income disparity and the tax advantages and disadvantages throughout the income tax system to bring better balance and ensure that those who are in the wealthiest sector of our society, who have the means, can contribute more to the fiscal coffers in a way that those monies can bring better balance to Canadians throughout society.

The second major part of the bill from the summary is:

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.

This is extremely important as it brings greater tax fairness to our taxation system and ensures greater effort is made by those with the economic means to support our economic and social programs as a whole.

I will speak a bit more on that aspect of the bill if I have time.

However, it is important to note that members have already voted in support of a ways and means motion, which allowed these changes to come into effect on January 1. Bill C-2, now before the House, would formalize that motion, and it would give members and the public the opportunity to both criticize and praise the bill, and we have seen some of that here today, and maybe even find ways to further improve the bill, either through this act or through future legislation.

As others have said before me, there will be more legislation coming forward that will continue to build on our commitment to income security for the middle class.

The government, beyond these measures today, will introduce proposals in the budget to create a new Canada child benefit payment system under the new Canada child benefit, which will begin in July 2016. The proposed Canada child benefit will simplify and consolidate existing child benefits, while ensuring that help is better targeted to those who need it most.

It is important because one of the difficulties in this place is we debate one bill at a time. In order to look at our package as a whole, this is just one plank in that package, and the Canada child benefit is an extremely important part of our ability to ensure fairness in the system and ensure those who need most and those with families get the benefits we said during the election campaign that we would provide.

Let me come back to the tax-free savings account because there has been considerable discussion in the House on that point. There is no question that the previous government's plan to nearly double the contribution limit to the TFSA would have helped Canada's wealthiest individuals save more. However, we committed to a fairer tax system. We know that only 6.7% of Canadians eligible for the TFSAs contributed the maximum in 2013. The numbers show that a better policy would be to reduce those tax benefits that really only benefit the wealthy, and use those extra monies for other programs to bring greater fairness throughout the system, whether through the new child benefit or through other measures that we laid out in our platform.

We have to look at the 6.7% of Canadians eligible for TFSAs who contributed the maximum. The fact is that most Canadians cannot even contribute $5,500, but those with the means can contribute $10,000, and they are using it more as a tax dodge than anything else. Those monies would be better spent in other ways and bring greater fairness.

There are better ways than the current system of providing income equality for Canadians, and our platform was all about changing that system. This bill gets into two particular areas. It was moved as a ways and means motion in December so the tax changes would be in effect starting this year. This was the intent we talked about during the election. This follows through on that commitment. Again, I emphasize it is one part of our platform among many to make the package complete.

I would encourage members in the House to support the bill and to see it for what it is: a system of tax fairness targeting programs to those who need it most in a way that would help Canada and Canadians gain greater prosperity.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, the member for Stormont—Dundas—South Glengarry is a good neighbour, and it seems like today is the day of neighbours. The member for Malpeque is my office neighbour here in Ottawa.

I thank the member for the middle class question. As he understands, it varies from city to city. The cost of living varies and so the impact is different from city to city.

However, what is important in my riding is the fact that nine out 10 families will benefit from this Canada child benefit. A lot of families in my riding will also benefit from the middle-class income tax cut.

I urge the member and all members across the aisle to support the measures of Bill C-2. For the life of me, I cannot understand how a Conservative member of Parliament can be against a tax cut.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I want to welcome my colleague and my neighbour from Glengarry—Prescott—Russell to the House. I am not sure if this is his maiden speech, but it was certainly a good speech, and I appreciate that. I welcome him, and I am sure that we will be doing much business together.

As members know, we have been debating Bill C-2 all day. We on this side have been looking for the definition of middle class. It seems like a rather simple question, and we have asked it a number of times to some of my colleagues on that side, but we have not really gotten an answer.

As a good neighbour and hopefully becoming a friend, maybe my colleague opposite could tell me exactly what his party means by “middle class”.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I would like to share my time with the member for Malpeque.

It is with great pleasure that I rise in this House today to talk about real change for Canadians. The middle class has gone too long without a raise, and in challenging economic times, we have taken action to help them.

In the next budget and over the next decade, our government will be making historic investments into infrastructure and supporting families through the Canada child benefit, which would lift hundreds of thousands of children out of poverty, and benefit nine out of 10 Canadian families. Bill C-2 is just one of many concrete actions that our government is undertaking in order to help the middle class. We were elected on a plan to grow the economy and help the middle class, and that is exactly what we did in December when the Minister of Finance introduced Bill C-2 in this place.

We are looking at initiatives to help the largest number of Canadians succeed, and we have already begun by cutting taxes for the middle class. Families work hard to make ends meet, and they need a government that understands their reality. The tax cut for the middle class would benefit many in my riding. This is not only true for my riding but for all Canadians. About nine million Canadians would benefit from this measure in 2016. Single individuals who would benefit would see an average tax reduction of $330 every year, and couples who would benefit would see an average tax reduction of $540 every year. The maximum tax reduction would be $679 per individual and $1,358 per couple. That is real change—putting more money in the pockets of the families who need it most. When the middle class is strong and prosperous, we create jobs, spur investment, and create a country that works for all Canadians.

That is not all. We are asking Canadians who have been fortunate enough to succeed to contribute a little more. That is why we are going to create a new tax bracket for those who earn over $200,000 a year. The new rate will increase from 29% to 33%. It will affect 1% of Canadians, but benefit most Canadians.

Bill C-2 also reduces the annual contribution limit for tax-free savings accounts from $10,000 to $5,500 and reinstates indexation of the TFSA annual contribution limit for 2016 and subsequent taxation years.

My opposition colleagues will say that this measure prevents Canadians from saving. That is completely untrue. Only 6.7% of eligible Canadians were able to make the maximum contribution to a TFSA. Doubling the annual contribution limit does nothing for the 93.3% of Canadians who cannot max out their TFSA contributions at the existing limit of $5,500 a year. Obviously most Canadians do not have enough money to make the maximum contribution to their TFSA. In fact, in 2013, Canadians had $592 billion in unused contribution room.

Governing this country calls for a long-term vision. In April 2015—I was not a member of Parliament then, but I was very interested in what the previous government was doing—the former finance minister said that lost revenue due to the higher TFSA limit was a problem for the Prime Minister's grandchildren to deal with. That is not the right way to do things. That is why we brought the limit back down to $5,500 per year. We want to safeguard the future of the next generation.

I am proud to be part of a government that serves all Canadians. That is why we are focused on implementing concrete measures that will help everyone. That is why we want to implement measures to grow the economy. That is why, when we spend money, we will make sure that every dollar is invested wisely.

For example, in the 2016 budget, we will create a Canada child benefit that will help nine out of 10 Canadian families. For the typical family of four, that means an extra $2,500 in help, tax-free, every year. The new Canada child benefit will be tax-free and tied to income. It will also provide more help to those who need it most, such as single-parent and low-income families.

Thanks to our plan, 315,000 children will be lifted out of poverty. Those who do not need it will not receive the Canada child benefit. This measure will mean real change.

Passing Bill C-2 is an important step that will help strengthen the middle class by implementing a tax cut that will benefit millions of Canadians every year.

We are asking those who have been lucky enough to succeed to contribute a little more. We will lower the TFSA contribution limit because it is the right thing to do, especially for the next generation. Of course, we believe in this investment tool, but raising the limit does nothing for 93.3% of Canadians.

I am very proud to support this bill because I know that the people of my riding, Glengarry—Prescott—Russell, will benefit a great deal from it. I encourage my colleagues across the aisle to think about the nine million Canadians who will benefit from this tax cut.

We did not close the door to TFSA holders. We simply set a reasonable limit that will allow their children and grandchildren to contribute to a TFSA and benefit from that tool. There are always limits in life. All we have done with TFSAs is set a reasonable limit.

I also urge my colleagues to take a look at the overall picture of what we are trying to accomplish and to take a look beyond Bill C-2.

We will reduce income tax for the middle class, and we will ask those who make $200,000 and more to contribute a little more. We will introduce a new Canada child benefit, which nine out of 10 families will benefit from.

Recognizing that we are in challenging economic times, we will invest in infrastructure. Of all the mayors that I have spoken to in Glengarry—Prescott—Russell, not one of them has told me that they have sufficient financial capacity to fulfill their infrastructure needs over the next 10 years. I know other mayors across Canada feel the same way.

Now, with the tax measures announced in Bill C-2 and the infrastructure plan that we will be announcing in the next budget, the overall plan to grow the economy makes sense for the middle class. The vision makes sense for our towns and our families. Bill C-2 is a pillar of that vision, and that is why I am supporting it.

I look forward to discussing any issues that I have raised in my speech with my colleagues in the House.

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.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Madam Speaker, thank you for the opportunity to speak to Bill C-2, an act to amend the Income Tax Act. The proposed changes to the act are the following: first, the reduction of room in the tax-free savings account for hard-working Canadians; and second, a reduction in taxes that have been marketed to Canadians as helping the middle class.

To preface any comments regarding these changes, I would like to begin by stating on the record that prior to my election as the representative for Barrie—Springwater—Oro-Medonte, my career was in finance. From personal, to small business, to commercial finance, I have had experience in planning finances and investment portfolios, with the exception of securities, and reviewing financial statements to understand the solvency of both individuals and businesses.

My remarks today are focused on four clear results of this tax-and-spend Liberal ideology we are seeing. One, the reduction of the tax-free savings account hurts seniors and young people more than anyone else. Two, it discourages Canadians from saving their money for the future. Three, the apparent Liberal tax reduction for the middle-class in fact benefits the top 10% of income earners in this country more than anyone else, while doing absolutely nothing to benefit those earning $45,000 per year or less. Four, a proposal that the Prime Minister, the Minister of Finance, and Liberal government have touted as revenue neutral will single-handedly be responsible for $8.9 billion worth of deficit over the next six years.

One of the most innovative tools ever delivered to Canadians, specifically seniors, is the tax-free savings account. While I understand that the government is looking at these changes from a theoretical perspective, my goal is to properly communicate what the practical advantages of these changes are. In my opinion, the Liberal government is reducing benefits to seniors and to all Canadians, benefits that were introduced and changed by the previous Conservative government.

For example, a widowed senior is required by the Canadian tax code to transition their life savings from a registered retirement savings plan, known as an RRSP, to a registered retirement income fund known as a RRIF. Upon transition to the retirement income fund, this senior must start withdrawing a minimum amount, which they are then taxed on. A withholding tax of up to 30% is then levied against withdrawals exceeding the withdrawal limits. Since retirement savings plans and retirement income funds are not truly liquid assets, a person may want to transition their savings into a more liquid vehicle, which is where the tax-free savings account comes in. The hitch is that, as stated, this person is being taxed as much as 30%. The idea that his or her life savings can be placed in a vehicle that can grow without tax in the future is ideal in most situations.

However, the government has reduced the annual amount a person can place in a tax-free savings account, which results in one of two things happening for seniors. First, the person is not able to remove as much of their life savings from their registered income fund in any given year. Second, the person is taxed based on a higher amount and then taxed again on the growth they attain in their senior years. I do not support separating seniors from their hard-earned money, which is likely being used to secure independent living, a healthy lifestyle, and to live out the remainder of their days as they see fit. I do not support under any circumstances raising taxes on seniors in our society.

Likewise, I do not support tax increases on young people looking to make the most incredible investment of their lifetime, in their first home. The CBC has stated the following:

With the TFSA, young people and home buyers have another option....

By contrast, withdrawals to the TFSA can be repaid to the plan at any time, following the year of withdrawal. “And unlike HBP [the home-buyers plan], failure to repay amounts withdrawn from a TFSA never result in tax on funds not repaid”....

The Liberal government has made it more difficult for young people to save for their first home. These young people in the GTA, Vancouver, and other hot markets throughout the country are being mandated now to save up to 10% for the down payment. At the same time, the Liberal government is clawing back one of the most effective tools to save that 10%. The government's action forces young people either to be taxed on the growth of their savings or use the home buyers' plan and pay back the money to the plan over the ensuing 10 years. Repayment, in these circumstances, can be difficult, as moving into home ownership is a life-changing situation and new homeowners often find these times challenging. What the Liberal government will do, therefore, is make it more difficult for young people to save and more difficult to purchase their first home.

While the Liberal finance minister travels around talking about shrinking household debt and increasing down payments on homes valued over $500,000, his government's policies are actually discouraging Canadians from saving for that same home. Therefore, why does the Liberal government say one thing and do another? The government believes that these tax hikes for seniors and young people trying to save for their first home are necessary. They are necessary in order to pay for its apparent middle-class tax cut.

Following the introduction of this apparent middle-class tax cut, economists stated that it would actually help those earning $190,000 a year, that is, those earning more than anyone else. In other words, no one would receive more help than those sitting in the top 10% of income earners in the country. How could the Liberal government, Liberal Prime Minister, Liberal Minister of Finance, and the Liberal MPs promote cutting taxes for those earning $190,000 a year on the backs of seniors in retirement and young people starting out their lives, or like the family I grew up in? We fought for years, like many Canadian families, to get and gain in home ownership.

I wish I could stop here. I wish this was where, to quote the member for Papineau, the “nonsensical” behaviour of this government ended, but it is not. Not only did the government raise taxes on seniors and young people, reduce incentives for saving, provide lower taxes to the top 10% of society, but when it did it, it also threw the government into deficit.

It was reported last week that the former Conservative government had left a $400 million surplus in November. In December, the finance minister announced that the Liberals would run a $3.5 billion deficit this year. This means the government has projected to spend $4.1 billion between November and March more than it takes in. One might ask how. It is because the revenue neutral middle-class tax cut is not revenue neutral and results in the 2016 fiscal year coming with a $1.7 billion shortfall, according to the Parliamentary Budget Officer. Furthermore, it will result in a total $8.9 billion shortfall over the next six years.

When Canadians elected this government they did so believing that the middle class would be the great benefactor, that young people would be given greater opportunity, and that seniors would be given a new way to live out the remainder of their days. Based on the promises the government has made, it has shown that it will say just about anything to anyone to get elected. Canadians will hold the Liberals to account for the actions they take, for the actions they fail to take, and in what order they do so.

The government's priorities are transparent as a result of the actions it has taken first. As it stands today, the government has not prioritized seniors, young people, lower and middle-class Canadians, and our children by its leaving a greater deficit year after year The government has prioritized tax cuts for the top 10% of income earners in Canada. This what the government will be judged on. This is what it will be known for. This is why, as a Conservative, I cannot support Bill C-2.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, I would like to advise you that I will be sharing my time with the member for Barrie—Springwater—Oro-Medonte, and I would like to take this opportunity to congratulate him on his election to the House.

This is the first time I have had the opportunity to rise to speak in the 42nd Parliament. Therefore, first, I would like to thank the constituents of my beautiful riding of Haldimand—Norfolk for electing me for my fifth term and for trusting me once again to represent them here in Ottawa.

I would like to acknowledge the team of volunteers in my community who worked so very hard each and every day over that 11-week period. Without them, I know that I would not be here today.

I would also like to congratulate my colleagues on all sides of the House for their election, and I look forward to working with them over the coming years.

I am incredibly proud to call the riding Haldimand—Norfolk my home, and I will continue to work hard to be the strong Conservative voice my constituents have asked for in Ottawa. I will fight to make our riding an even more wonderful place in which to live, work, and raise a family.

Haldimand—Norfolk is full of hard-working individuals who know the value of a dollar. Our Conservative government always believed that Canadians' money belonged to them and that they know what is best for themselves and their families.

Canadians in all income groups have seen their take-home incomes rise since 2006. The federal tax burden is at its lowest in over 50 years, thanks to our then Conservative government and the more than 180 tax cuts we made. These tax reductions gave Canadians the flexibility to make choices that were right for them to help build a solid foundation for their future economic growth and a higher standard of living for themselves and their children.

Canadians at all levels are benefiting from that tax relief, with low and middle-class Canadian families receiving proportionately greater benefits. More than one million low-income Canadians were removed from the federal tax rolls altogether due to our Conservative government's tax policies. We significantly improved the lives of Canadians, while at the same time, we kept our promise to balance the budget and stay fiscally responsible.

As we all know, the current Liberal government made it clear in its platform that it would be taking the surplus the previous government left it and would be entering into multi-year deficits. One of the problems with that is that there was once a promise to keep the deficit to $10 billion, which has now ballooned to $20 billion or possibly even $30 billion.

Every week we hear more holes in the Liberal costing of their platform. More recently, the Parliamentary Budget Officer contradicted the Liberals' claim of a cost-neutral tax increase to Canadians.

It is clear to Canadians that there is one party that will always look out for hard-working taxpayers, and that, of course, is the Conservative Party.

Among the multitude of tax-relief measures our government introduced, perhaps the most popular was the tax-free savings account, or TFSA. The TFSA is the most important new savings vehicle introduced in Canada since the RRSP was introduced more than 50 years ago.

Available since its introduction by our Conservative government in 2009, the TFSA is a flexible, registered general purpose savings vehicle that allows Canadians age 18 or older to earn tax-free investment income. I should point out that this is a voluntary procedure.

Millions of Canadians have taken advantage of the very popular TFSA. They are an excellent way for Canadians to save tax free and to have the money available for their own personal needs.

As a matter of fact, according to Revenue Canada, as of the end of 2013, nearly 11 million individuals, that is roughly one in three Canadians, had opened TFSAs, and the value of the total assets held in those TFSAs was nearly $120 billion.

The TFSA gives Canadians the flexibility to save for purchases like a new home or car, to start a business, or to save for retirement. Many Canadians have maxed out the old $5,500 limit, and many would contribute more if allowed. Our Conservative government made that possible when we raised the maximum contribution limit to $10,000, effective 2015 and for subsequent years.

The opposition claims that TFSAs only benefit the rich. That is blatantly false. In fact, at the end of 2013, individuals with annual incomes of less than $80,000 accounted for more than 80% of all TFSA holders, and about half of TFSA holders had annual incomes of less than $42,000. About 1.9 million individuals have contributed the maximum amount to their TFSAs. About 46% of these individuals were seniors, and over 70% were aged 55 and older. Roughly 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000.

Many seniors in my beautiful riding of Haldimand--Norfolk have shared their concerns with me about the changes proposed by the new Liberal government. Some retirees on fixed incomes struggle to save for their future, and the TFSA, with its limit increase, was one way to make that easier.

The fact is that Canadians are living longer than ever, which is great news for all of us. Since 2006, seniors have been benefiting from important money-saving measures such as pension income splitting and tax-free savings accounts. As of the end of 2013, close to 2.7 million seniors had TFSAs.

The previous government understood that Canadian society thrives in a low-tax environment. It is a shame that the Liberal government is opposed to the enhancements made to the tax-free savings account. They do not realize the benefits it would bring to Canadians across the country. Unlike the prudent fiscal approach the Conservatives took, the Liberals fundamentally believe in irresponsibly high taxes, recklessly high spending, and what seems to be an aspiration toward structural deficits.

Through Bill C-2, the government would significantly cut back on the amount individuals can contribute to their TFSAs, in spite of the fact that all data shows that those in the middle- and low-income classes are far more likely to use their TFSAs. Meanwhile, the new tax changes the government is trying to bring in would provide absolutely no tax relief to those earning less than $45,000 a year. Instead, many low-income people who are using TFSAs would now be worse off under this new Liberal government's proposed plan.

Our government fulfilled its commitment of doubling the TFSA contribution limit to $10,000, something that was helpful to all Canadians, young and old. The Liberal government should be encouraging responsibility in saving, regardless of how irresponsibly it chooses to run the nation's finances.

The Liberals promised Canadians that their plan was revenue-neutral. Since then, the revenue minister has conceded that the plan is not revenue-neutral; it would leave a $1-billion hole. The Parliamentary Budget Officer released a report estimating that the cost will be closer to $1.7 billion. This is a broken promise that proves that the Liberal plan has been grossly miscalculated.

Canadians know that the Liberal tax plan will end up costing them, so they deserve to know where the money will come from. It is my hope that the Liberal government will see the impact these changes will have on Canadians and will change direction so that all Canadians may benefit from TFSAs to the max.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I wish we could reframe this debate. Starting during the election campaign, both the New Democrats and the Liberals were in a stampede to embrace the middle class. I am hoping this is really coded language for addressing inequity. I hope it is really about the inequality by which the wealthiest 0.002% of Canadians have more wealth than the bottom 34% of Canadians. I hope we are really talking about, as the parliamentary secretary suggested, a suite of measures.

However, I do not think we can measure it against how well the middle class works. I do not think any economist has a definition of what middle class means. We do know what inequality means, and it means the poorest fall behind and the billionaires make more. That would take a whole lot more than what we see before us in Bill C-2.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, of course we in the progressive opposition will always stand and and agree with conclusive measures to help those who are most vulnerable, whether it is children, the elderly, or poverty overall.

However, we are debating Bill C-2 today. That is why I am not talking about future plans in the budget. With all of the problems that Canada is facing, Bill C-2 could have been an opportunity to introduce some very worthwhile legislation to tackle problems.

Why did we not have the introduction of legislation to tackle the Employment Insurance Act? Why did we have legislation to reverse some of the harmful legislation of the previous Conservative government?

We could have done something to lift seniors out of poverty. Instead, a tax bill has been introduced that will help wealthy Canadians, not middle-class Canadians.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Yes, it sounds pretty rosy.

Before I get to the crux of the matter with the tax changes, I want to speak first about the tax-free savings account because this is on something that the NDP can agree on with the Liberal Party.

When the Conservatives were in power, we heard time and again that the TFSA was an excellent tool for helping seniors. I know very well from hearing from seniors across my riding that the TFSA contribution limit would be of little help compared to many of the NDP's proposals. It was a step in the right direction to lower the TFSA contribution limit placed by the Conservatives, because the higher limit yields disproportionate benefits to the richest Canadians. The TFSA contribution limit increase would have cost the treasury billions of dollars in the decades to come. In fact, it is estimated that the combined federal–provincial cost would have been $132 billion by the year 2080. Where is that money going to be recouped?

We know that the Conservatives' responses included the point that it was not a problem for the previous prime minister's grandchildren. We heard Joe Oliver's comments on that mentioned in the last speech. However, we in the NDP believe in creating a sustainable future where no one is left behind. The problem lies in what we have seen through many Liberal governments in the past. They acted on some small measures but really did nothing to deal with the issues that middle- and working-class Canadians face. Presently, we are dealing with a very difficult economy. There are lay-offs and the power of our dollar has been shrinking by the week. This is making our already-precarious seniors' living and food insecurity even more insecure.

Now I will speak to the matter that I am looking forward to addressing, the so-called middle-class tax cut.

The Liberals have decided not to use their first piece of legislation, Bill C-2, to deal with our ruined economy but to propose lowering taxes in a way that would not benefit 60% of Canadians. In my riding, if someone earns the average income of $37,000 a year, he or she would receive precisely zero dollars in benefits. We know that the price of vegetables has gone up by 10% in the last year and we have seen a report from the University of Guelph that predicts that food prices will again rise faster than inflation. This price of food disproportionately affects the most vulnerable Canadians and is something that hurts the real middle class in this country. The seniors and indigenous people in my riding are some of the most adversely affected by this drastic price increase. If we get to the people who are lucky enough to get into the middle-class tax bracket, the maximum benefit that many of them would see, as alluded to earlier, is precisely $50. That figure is negated when we take into account the cost of inflation. In fact, that $50 would basically be eaten up by five stalks of cauliflower over the year at the supermarket with the way food prices are going.

It is important for us to point out the contrasts here today. I want to show members some of the figures that we have from Statistics Canada: for the average office worker earning $39,000 a year, the benefit would be zero dollars; for hairstylists earning an average of $27,000, zero dollars; and even the fish plant worker earning $26,000 a year, it would be zero dollars. However, I do want every Liberal member of Parliament to understand they are giving themselves a tax break of $679. Moreover, every parliamentary secretary on the government side is giving themselves a tax break of $679. They are doing it for lawyers, well-paid bankers, and so on. However, for the average middle-class Canadians, they will get precisely zero dollars under the bill.

We have a constituency week coming up next week when we will all get to travel back to our ridings and meet with our communities, which I am very much looking forward to. However, I would love to see how Liberal members of Parliament will explain to the so-called common folk in their riding, the middle-class Canadians, what the real deal is with their tax break, and how they are giving themselves $679 in tax breaks, but for the rest of the people in the riding, precisely zero or $50.

This middle-class tax cut is nothing more than smoke and mirrors. The Liberals have never been able to define precisely what the middle class is, and they have never answered the question. The median income, defined as the halfway point between the higher half of a data sample and the lower half, and probably a good place to define the middle class, is $31,000. However, this group will receive precisely zero dollars.

On the proposal for middle-class tax cuts, the legislation before us would work for families that make between $166,000 to $200,000. They fall among the richest 90% to 95% of Canadians. I believe this action seems to suggest that either the Liberals are not here to help the real middle class or they believe the middle class is people earning the 90th percentile of income.

The cost of helping such a small portion of the richest Canadians will exert an incredible amount of pressure on the government's books. In fact, it is estimated that this tax cut overall will cost our revenue stream $8.9 billion over the next six years. This plan was a piece of election hyperbole that was meant to seem progressive, but is actually detrimental to our middle and working classes.

Liberal governments of the past have been able to flash left and then turn right while they were in power. We in the NDP do not intend to let the Liberals get by without a struggle on that front.

This change is not the way we take care of our most vulnerable population like seniors, let alone the actual middle class. This is not the change that our most vulnerable citizens were looking for.

The NDP is here not just to point out the inconsistencies in the Liberal plan, but to propose alternatives. We will be doing so here and in committee. A progressive opposition will stand for the values of fairness for all instead of an economy rigged for the highest earners. We believe in helping the real middle class, and not just the high-income earners that the Liberals have labelled as the middle class.

We have developed proposals that will fix the Liberal plan, which would make it correspond with their campaign promise to Canadians. We believe that if we lowered the first income tax bracket by 1%, then 83% of taxpayers would benefit from this proposal. This solution would benefit many more Canadians, and the cost difference would be minimal.

We could further minimize the cost to the treasury if Liberals would just agree with the NDP to increase corporate tax rates by just a smidgen more, and ask corporations to pay a little more of their fair share instead of downloading costs onto Canadians.

I will end my speech by quoting a few validators who have studied the bill.

According to the research chair in Taxation and Public Finance at the University of Sherbrooke, couples with a combined income of $250,000 a year would gain about $1,100 in tax cuts, while couples with a combined income of $75,000 a year would get an average of zero to $4.

Finally, Gordon Pape, certainly no friend of the NDP, wrote the following in The Globe and Mail:

Finally, let's consider low-income earners. There are a lot more of them than those who fall into the middle-income category.... The Liberals didn't offer them any relief so the only break they get is from the indexing of the tax brackets.

Pape continues that they “are the ones that really could have used a tax cut but somehow they got lost in the election hyperbole. Too bad.”

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I would like to thank the hon. member for Skeena—Bulkley Valley. He has done an amazing job in the House since 2004 on behalf of his constituents, and I will certainly do my best to follow such an amazing performance.

It is an honour to rise again in the House to speak on behalf of my wonderful constituents in Cowichan—Malahat—Langford and to take part in the debate on Bill C-2, An Act to amend the Income Tax Act. As we all know, this bill would make various changes to the Income Tax Act, but today I will concentrate on two of them: the changes to the income tax brackets and to the contribution limit to the tax-free savings account.

The Liberals were elected on the promise of bringing tax relief to the “middle class”. Indeed, the words from the Liberals' campaign website painted a cozy picture for the average middle-class Canadian. Let me just read some of the words: “We will 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”.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I will split my time with the member for Cowichan—Malahat—Langford.

Madam Speaker, I join this debate with some enthusiasm. I think we have struck upon something here today in the Liberals' centrepiece in their tax promises to Canadians. Bill C-2 attempts to do two things. One is to address the TFSA, the tax-free savings accounts, and bring the limit back down to $5,500. Two is somewhat regressive changes to the tax code that the Liberals are bringing in after so much talk and time spent on their efforts to help the middle class. The single-best answer we have had from a Liberal today, in an attempt to define the “middle class” is he said that it was not up to him to define it. Then he went on to repeat how much help the Liberals were giving this class of Canadians that Liberals refuse to define.

If anybody else finds that odd and somewhat worrisome, let us look through the tax plan that the Liberals have put forward. Revenue Canada breaks down those filing taxes into five groups: the bottom 20%; second 20%; third 20%; fourth 20%; and up to the very top tier of 20% income earners.

Let us just take the middle group. That is an odd way to define “middle class”, to use the middle group. That group, under this Liberal tax plan, gets very little. Perhaps that is why Liberals do not want to actually define the middle class. If they just keep referring to it over and over again, Canadians who are in the middle class, in fact, might think that the Liberals are talking about them when looking at this tax plan.

Let us look at those Canadians who are earning what might seem as middle-class money. Let us take one group that can be defined and get specific. Those earning between $48,000 and $62,000 get $50 under this Liberal tax plan. Perhaps Liberals do not think those are middle-class Canadians, but I am going to walk out on a limb and say they are. They might think that is nice. However, one increase in energy bills in northern British Columbia will take care of that $50.

Now, those earning quite a bit more, up in the top 20%, let us say, between $166,000 and $211,000, will get more than $800 back, not $50.

Liberals can stand in the House today and argue that somebody making $200,000 a year needs the 800 bucks. I know some of my Conservative colleagues used to make the same arguments, but at least they had the effrontery to do it.

What worries me is that the Liberals continue to reference a group of Canadians without ever defining it, hoping that Canadians might be tricked into thinking that they might be talking about them. When they get their tax returns back they will look at $50 extra and ask what happened to that big middle-class tax help that was meant to come. What happened to that election that we watched week after week where the Prime Minister, who is now being echoed by his MPs here in the House, talked incessantly about the middle class and yet is unwilling, unable to define it? Then, when the proof comes in the pudding, when it is time to actually see what those in the middle-income brackets get out of this, it is little or nothing.

In fact, for 18 million Canadians who will file taxes next year, do members know what they get out of this Liberal tax plan? Nothing. Not a thing.

Liberals says they are helping out so many people. This is actually a trick.

We have to give credit where credit is due. This is something Conservatives used to do. They would throw out a big number and say “We're helping eight million, nine million people. Aren't we wonderful?” They would pull a muscle patting themselves on the back so often. We would say, let us see how that actually proportions out. Is it an equal amount of help across those eight or nine million people? Well, no, of course not. The help sloshes up toward the upper end. It gets better the more you make. That is the way the Canadian tax system works. If the Liberals make the cut that they are proposing to do in Bill C-2, those earning north of $200,000 would see a benefit of close to $815. Those who are not fortunate, not able to earn that kind of money, would see something in the order of $50 or, if they are really unfortunate, nothing.

We have to place this into some context, as some of my Liberal colleagues speaking today have.

The economy is in significant and serious trouble, I would argue, as many have in part, due to previous policies by Conservative and Liberal governments. Over the past decade, we have lost half a million value-added jobs in factories and plants that were good family-supporting jobs. Half a million jobs disappeared over that time and there was not a whisper of worry from the previous government and not much from the Liberals when they sat in opposition. They said this is transition.

I suppose it looked like a cute turn of phrase for the Prime Minister's speech writers when he was in Davos, suggesting that we are known for our resources, but we will leave that behind and we will be known for our resourcefulness, as if somehow those two things do not go together, that being resourceful with our resources should be the primary role and governing directive of any government in a country as wealthy as Canada with our endowment of such natural resources. Somehow the Prime Minister and his speech writers wanted to contradict those two concepts of our economy, that it is no good to be known for our resources, tut-tut, that is where we get our hands dirty. We will be known for our resourcefulness and our creativity. That is something counterpoised.

I live in a resource-dependent part of this country. I would suggest that the Canadian economy, as is being borne witness every day on the stock exchange, is still somewhat reliant on the natural resource sector. I hope the Prime Minister has walked some of this stuff back. Sometimes these cute phrases work so well in the drafting room, until they are put out and real people actually hear them and say, wait a second, is he talking about me? Is he talking about my job in the forestry sector or the mining sector, in the petroleum and gas sector, in the green energy sector? I am being resourceful with our resources and I would like to continue to be. That was not a lot of help.

Now let us talk about something that is good. It is important to be hopeful and optimistic and see where work hard will get us. The rolling back of the TFSA limit from $10,000 to $5,500 is important simply because this exercise that the Conservatives undertook was incredibly expensive to the treasury in a very short period of time. We know that the people who were able to max out at $5,500 a year and certainly people who had $10,000 extra at the end of the year burning a hole in their pocket were not the middle class, were not certainly the lower end of the economy, they were folks of means.

We also know from the finance department's own research on this that with the introduction of the TFSA in 2009, simply another retirement and savings vehicle, retirement rates did not actually increase. If we bring in a new policy and it does not do what it is meant to do, then it is worth reconsidering. The government should be credited for at least doing that. A price tag of $13 billion to the treasury in 15 short years is expensive. If it is not helping retirement as so many of my Conservative colleagues said it would, then this is a problem.

Picking up from a government, as the Liberals are now doing, that blew $150 billion on top of the national debt, lost half a million manufacturing jobs in the process, and left a very fragile and weakened economy, it is very important to define the middle class if we are going to help it. If a doctor cannot actually name the problem, I would be pretty suspicious of any prescription that I got from that doctor. Here we are with Liberal after Liberal getting the term “middle class” in as often as they can, peppering it through their speeches. Yet in very simple direct questioning one after another, the best answer we have had from a Liberal so far is that “it is not my job to define”. Fascinating. I guess it is just a Liberal job to talk about it.

If we are unwilling to define it, that causes a lot of people consternation and here is why.

When we break down and get into the actual details of what the Liberals are proposing, the vast majority of benefit is going to those who need it the least. A vast majority of Canadians, some 18 million tax filers this year, will get nothing from the Liberal government and are only going to be disappointed. Expectations are high. The red team across the way made a lot of promises, cited time and time again how help is on its way. After the many dark years under the previous government, here was a new government coming in that understood the middle class. While the leader did not come from the middle class, he understood what it was to pay electricity bills and pick up the kids from school. They were going to go ahead and bring something in that would actually help Canadians struggling to make ends meet.

When we look at the actual numbers we realize that those at the very top end will get 16 times more benefit out of this Liberal plan than those in the middle, which is an infinite amount more than those at the very bottom.

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

Madam Speaker, what we are most proud of as a government when it comes to Bill C-2 is the fact that we are giving a break to the middle class across the country and we are going to allow nine million Canadians to have more money in their pockets at the end of the day.

If I may be more precise, we are taking the tax rate for Canadians making between $45,282 and $90,563 from 22% to 20.5%, and we are simply asking Canadians who make more than $200,000 to pay slightly more in tax. That is a progressive way to make sure all Canadians can make ends meet.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, it gives me great pleasure to rise on this occasion as the member of Parliament in the 42nd Parliament of Canada. The people of Renfrew—Nipissing—Pembroke have my sincere gratitude for giving me the honour and the privilege of being their representative in this sixth consecutive election.

Now that the election is over, I renew my pledge that I never forget the people who made this possible, the good people of Renfrew—Nipissing—Pembroke. They can be assured that I will continue to fight for the issues that they tell me are important. As always, I am their servant.

There are many individuals to whom I owe a great debt of gratitude for the confidence they have placed in me, for their hard work, and for the long selfless hours they put in to build a winning streak that has become our standard for successful campaigns.

For the many newly elected MPs who are not aware of the history, the Ottawa Valley became the eastern beachhead of democracy in the year 2000. That marked the beginning of meaningful change as Canadians entered the 21st century, and from the period 2006 and on, a period that will be fondly remembered as the good old days of responsible leadership while today's Conservatives take a short break from government.

I extend my heartfelt thanks to our entire campaign team, my spouse Jamie, and the many hundreds of volunteers who demonstrated what a truly grassroots campaign Ottawa Valley style is really all about.

Before I begin my comments regarding Bill C-2, I want to make it fundamentally clear that the Conservative Party I am proudly a member of stands for lower taxes and less government interference in the daily lives of Canadians. The best anti-poverty program is a job. We do not create employment by taxing, borrowing, and spending more than we can afford.

My constituents support lower taxation. They sent me to Ottawa to reduce government and to fight for lower taxes. Bill C-2 is about a misleading campaign promise that was presented to a distracted public as reducing taxes at the expense of raising taxes for others, when in fact all this does is raise taxes for everyone.

In the case of this so-called middle-class tax cut, it was claimed during the last election that taxes would be reduced on the middle class by asking the wealthiest Canadians to pay more. Canadians have since learned that higher taxes for the wealthiest Canadians will not begin to pay for this campaign promise that is the basis of the legislation before us today. The promise was made without even the most superficial analysis. It was made to get elected.

More from the wealthiest does not go far among the rest of the population. The middle class will end up paying for its own tax cut, plus the interest on billions borrowed to cover the tax change, and to cover successive deficits that were promised by the Liberals, a promise they intend to keep, and more, and that should be meant to be broken.

The mark of Liberal generosity is with other people's money. Deficits are just deferred taxes, which is our children's financial inheritance. The irony is that ample evidence shows that government loses revenue when it targets individuals who can afford to pay for avoidance, including by moving their financial affairs to places like Bermuda, which was the tax haven of choice of the last Liberal prime minister before the current occupant.

The legislation before us today, being introduced as the first finance bill in the opening session of a new Parliament, and before the federal budget, when these tax measures could easily have waited to be included in the next federal budget, is intended to fulfill a signature campaign promise. I get that.

It was former Ontario Conservative Premier Mike Harris who set the bar when it comes to keeping one's election promises, so I understand that a political party does not want to be accused of lying to get elected, which is what a government is doing when it breaks its promises. For the Liberal Party, it would seem, then, that there are two types of campaign promises: those made to get elected and those meant to be broken.

I actually had an individual who worked for a major Canadian chartered bank tell my office that he believed that once elected, the Liberal Party would do what it had always done and break election promises it had made to appeal to those confused between election promises made to get elected and election promises made to be broken. He could not believe that the Liberals would attack the middle class by tampering with TFSAs, which, in his professional estimation, were better than RRSPs as a savings instrument, particularly for seniors, and certainly for young families aspiring to be middle class and saving for their first home.

If the debate about Bill C-2 is actually about helping the middle class, there are many other campaign promises that should be broken.

A measurement of a vibrant middle class in a society is home ownership. A recent study by the Canadian Centre for Economic Analysis has identified those under the age of 45, families with two income earners, who cannot find affordable housing without a long commute as being those most under pressure.

I know a dual-income family in Toronto where both spouses are lawyers, and they are shut out of the housing market, where a starter, fixer-upper home costs $1 million in the neighbourhood where they rent.

TFSAs are being used by young families to save for their first homes. Housing is a need, just like food or water, and if we need it, there is a greater and greater pressure on us to get it, regardless of the cost.

What is occurring at the moment in places like Toronto and Vancouver is not sustainable. The fear in places like my riding of Renfrew—Nipissing—Pembroke, in eastern Ontario, is that eventually, the dream of home ownership that has died in the big cities will start to die in areas like ours, smaller local areas, and that rising taxes, electricity costs, transportation, and other big city problems will also contribute to barriers to home ownership locally.

Take away the dream of home ownership in Canada and we take away the middle class. It is no secret in Ontario that this province is struggling because of a misguided energy policy that has caused the exodus of jobs, fleeing some of the highest electricity prices in North America, to U.S. border states. Lower electricity prices will spur economic activity. Lower energy costs are good for consumers and manufacturers.

Where there was once a burgeoning middle class based on blue collar manufacturing jobs, the decision, in the words PMO principal secretary Gerald Butts puts in the mouth of the Prime Minister, to transition away from manufacturing jobs has cost the middle class dearly in Ontario.

I urge members of the Liberal caucus and the rest of Canada to pay attention to Ontario's problems. The same people who ran the corrupt McGuinty provincial government have fled the sinking provincial ship and are now backroom operators in Ottawa, and they promise to take the entire country down the same deficit-spending, tax-the-rich, let-them-eat-cake attitude that is so toxic in Ontario today.

Focus on the one thing that would really improve the economy and help the middle class: create employment. Avoid the incessant talk about the environment. The greed energy act in Ontario, which was brought in under the guise of helping the environment, caused the loss of tens of thousands of jobs, of good-paying jobs, in Ontario's manufacturing sector.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, it is a pleasure to rise in the House to speak on behalf of my constituents in Battle River—Crowfoot. Battle River—Crowfoot is a new constituency. The boundaries changed in the last election, and I am fortunate enough to represent a new northern section. I want to thank them for their support in the last election. I pledge to work very hard for them in Ottawa.

I also want to thank my election campaign team and long-term supporters. In six elections, they were ready to campaign and help out, not just in my riding but around the country. Obviously I want to thank my family. I want to thank my wife Darlene and our children, Kristen and Ryan, and Kristen's husband Matthew for their love and support over the many years of doing this. I know all members know that without the support of their families and those they love most, they would be unable to do this. Whether it is my immediate family, my parents, or others, I want to thank them.

We are debating the Liberal government's destructive tax plan for all Canadians, including the middle class. It tears down many of the efforts that were developed to help families and workers, to ensure that taxes remained low for all Canadians, that there were balanced budgets, and that jobs were created for Canadians. These measures are affected by part of Bill C-2. The former government ensured that economic growth for Canada's economy was a priority.

I neglected to inform you, Madam Speaker, that I will be splitting my time with the member for Renfrew—Nipissing—Pembroke.

Since this bill was tabled in December of last year, we are very aware that the numbers of the Liberals simply do not add up. The Liberals' assault on higher income earners will not work. This is a tax hike on those who traditionally create jobs and grow our overall economy. It is a tax increase on professionals and on the educated. It is a tax increase on those who work hard and succeed.

By increasing taxes on job creators, we would be discouraging their success and jobs for Canadians with the passage of this bill. Canada's higher income earners would immediately launch many measures to protect themselves from paying such high taxes. The Liberals will not realize the rise in tax revenue that they are counting on to finance their small increase in benefits to the middle class on which the bill is supposed to deliver.

Not only are the high income earners going to task their accountants with pursuing and implementing measures that will ultimately prevent them from paying higher tax increases, but some of them will abandon their lucrative endeavours in Canada to reduce their incomes so they do not have to pay the increase. They will move their projects, in some cases offshore, Canadians will lose jobs, investors will follow these business leaders to their new locations, and Canada will lose investments.

We have seen this under former Liberal governments. When I ran in the elections in 2000 and 2004 as a new young MP coming in, like many here today, the top issue of the day was what we called the brain drain. We asked ourselves what we would do to bring back Canada's young, to bring back those who had moved to the states or Europe with their potential futures. What would we do to solve the brain drain? Economists are again predicting significant brain drain from Canada as the result of Bill C-2.

The federal government will not have the tax revenues to fund the schemes put forward by Bill C-2. The worst part of Bill C-2 for my constituents is the reduction of the annual contribution limit for the tax-free savings account, from $10,000 at its previous level to $5,500 starting January 1 this year.

Right now many families are experiencing the pain of unemployment. Many of my constituents work for companies that service the oil patch, and their lives are being disrupted. Households are being disrupted. Savings are being used in an attempt, in some cases, to save family homes, or to make the next payment.

TFSAs have been a very effective tool for all Canadians, young and old. Tax-free savings accounts are being cashed in by many constituents of mine in Alberta right now. Families are using their tax-free savings accounts to try to reduce their economic vulnerability to the oil price and also, in some cases, to their pending unemployment.

Meanwhile, the Liberal government is refusing to help get our petroleum products to seawater ports so we can export our products to our customers who are waiting and wanting to buy our products. When that happens, unemployment climbs. We are seeing that right now.

Any family that is not suffering significant loss of jobs is looking to save whatever amount of money it can. Families are saving now for the coming hard times they know will happen under the Liberal government.

The Liberals have promised numerous budgetary deficits that will expand our nation's debt and ultimately lead to higher taxes. In other parts of Canada, places not yet suffering from the downturn in the oil patch, some Canadians are still managing to put money into their retirement funds.

Many Canadians are saving as much as they can. Many Canadians are simply trying to park their savings, because they know that the downstream effects of the current downturn in Canada's energy sector will soon hit them in their pocketbooks.

We found out just a couple of days ago that Japan adopted a negative interest rate policy. Now where money is being held in the bank, it is now looking at ways of taxing it. In an uncertain climate there, people are sitting on their savings.

The loss in federal revenue from the oil patch in the coming years is going to affect Canada. Make no mistake, it will affect how the Liberal government will operate. It will affect how the Governor of the Bank of Canada sets rates. It will affect all Canadians, in the rural parts of Canada, in big cities, and in the remote areas of Canada.

Already, after three or four months, Canadians have no faith that the government will help the people in business in Canada's once-prosperous sector. They know about the coming hard times their families will suffer during the failure of the Liberal plans. They know they will see massive amounts of tax dollars that the federal government does not have being spent on misguided efforts, job creation efforts, and token attempts at diversifying local economies. The way the Liberals will deliver on those is yet to be seen. We are still waiting for a budget.

All I know is that Canadians are disappointed with a lack of action from the government. Many Canadians know that the Liberal government is in serious trouble. Based on Finance Canada's estimates, the new Liberal tax plan amounts to an average of an $6.34 per week for those individuals who qualify. Canadians feel betrayed; $6.34 to the middle class, and yet taxing those who are job creators.

We know this small tax break is not enough to stimulate our economy. Nor will throwing money at the middle class stimulate growth and innovation. It does not help create jobs. We have not seen anything from the government that is going to help with innovation, investing back into companies, or anything that is going to help create jobs.

Our Conservative government reduced taxes more than 140 times. This modification to the income tax rate that the Liberals are bringing forward is not significant tax relief and it comes with a high price tag in deficit financing. The policies of the government will be economically destructive. We know it will be for many decades down the road.

The Minister of Finance has already conceded that this tax plan is not revenue-neutral. In Bill C-2, it will plunge the Government of Canada further into deficits and debt. I guess that is what the Liberals deliver on. This is debt that will eventually put our social programs at risk, a debt that our children and our grandchildren will have to pay off. This bill fails.

Consequently, in representing my constituents, I will be voting against Bill C-2.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Madam Speaker, it is a pleasure to add my voice to today's discussion on the government's middle-income tax cut, which we introduced in December 2015.

Before I touch on the legislation, I will begin by taking a few moments to extend my congratulations to the Minister of Finance and his parliamentary secretary for pursuing one of the most comprehensive pre-budget consultations in recent history.

The 2016 pre-budget consultations began when the Minister of Finance held a Google hangout with eight Canadian universities on January 6 to get the views of students and faculty on how to best grow the economy. On January 11, the minister and his parliamentary secretary struck out on a six-day tour in an effort to speak to as many Canadians as possible. They hosted upwards of 26 separate meetings and round tables with stakeholders and Canadians across the country, beginning in Halifax.

In addition to these meetings, the minister spoke to full-capacity crowds at the Halifax Chamber of Commerce, the Montreal Council on Foreign Relations, and the Surrey Board of Trade, with a total attendance of well over 1,500 people.

For those Canadians who have not been able to make it out to meet the minister and the parliamentary secretary personally, they can continue to share their ideas and comments through various online channels, such as the Your Money Matters Facebook page and hashtag #pbc16.

Through our pre-budget consultations, we are engaging with Canadians, looking for input on how the federal government can best support the middle class and those working hard to join it, meet infrastructure needs and help grow the economy, protect the environment and meet local needs, as well as ensure that the most vulnerable do not get left behind. It is an ambitious list, to say the least, but one that respects Canadian values of honesty, hard work, and fiscal prudence.

I would like to thank all those who have and will contribute to the pre-budget consultations, whether in person or online. This input will be vital to ensuring that Canadians can direct and focus the decisions that our federal government can make. More importantly, Canadians will be able to see their contributions when the 2016 budget is tabled.

I want to assure Canadians that we are listening and we hope that this renewed interest by Canadians will make a better country for all of us; for our families and for our communities. We are hearing that Canadians want to push forward with our plan to grow the economy, strengthen the middle class, and help the vulnerable.

We have a clear mandate, and expectations are high. First and foremost, we are here to serve Canadians. They expect us to implement our ambitious economic agenda. They want a government that is open to the world. They want a more transparent government.

No one will be surprised to hear me say that the economy is going through a very difficult period. However, in the face of this real challenge, there is also real opportunity to put in place the conditions to create long-term growth that will create good jobs and help our middle class—the lifeblood of our economy—prosper. The plan for growth is more important now than ever.

The good news is that we have a plan to grow the economy, and we have already begun to implement the plan: we introduced the middle-class tax cut in December and tabled Bill C-2.

As of January 1, the middle-class tax cut is putting more money in the pockets of nine million Canadians each year. We are focused on smart investments that promote economic growth while maintaining a commitment to fiscal responsibility. We will improve economic prospects for our middle class, which is the backbone of our economy. We simply cannot call ourselves prosperous as a country if our middle class is struggling. This is why Bill C-2 is so important to Canadians.

I will now touch on the specifics.

Our middle-class tax cut and accompanying proposals would help make the tax system fairer by reducing the second personal income tax rate to 20.5% from 22%; introducing a 33% personal income tax rate on individual taxable income in excess of $200,000; returning the tax-free savings account, TFSA, annual contribution to $5,500 from $10,000; and reinstating indexation of the TFSA annual contribution limit.

We expect nine million Canadians will benefit from the reduction of the personal income tax rates, which are to take effect on January 1 of this year. Single individuals would see an annual tax reduction of $330 per year, and couples would see an average tax reduction of $540 every year. This measure would put more money in the pockets of Canadians to save, to invest, and to grow the economy.

In addition, the government is introducing a new personal income tax rate of 33% that would apply to individual taxable income in excess of $200,000. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax. As with other bracket thresholds, the $200,000 threshold would be indexed to inflation.

Finally, the government is returning the tax-free savings account annual contribution limit to $5,500 from $10,000 effective January 1 of this year. Returning the TFSA annual contribution to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it most. When combined with other registered savings plans, a $5,500 TFSA annual contribution limit would permit most individuals to meet their ongoing savings needs in a tax-effective manner. Indexation of a TFSA annual contribution limit would be reinstated so that the annual limit maintains real value over time.

Finally, let me quickly review some of the other measures that are included in today's legislation.

The bill proposes to change the current flat top taxation rules applicable to trusts to use the new 33% tax rate. It proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate. Finally, the bill would increase the special refundable tax and the related refund rate imposed on the investment income of private corporations to reflect the proposed new 33% personal income tax rate.

There has never been a better time to make targeted investments to support economic growth in this country. We are confident that our plan will accomplish this, and that is one reason why I am optimistic about our prospects going forward. Given that, I encourage all members to support this legislation.

[Salma Zahid, Liberal, Scarborough Centre, ON]

Madam Speaker, the tax cuts that we have proposed for Bill C-2 have already started helping nine million Canadians, and together with the Canada child benefit will help nine out of 10 Canadian families.

I am proud to stand with a government that is there to help middle-class families. We are just asking the wealthiest people, 1% of Canadians, to pay a little more.

[Salma Zahid, Liberal, Scarborough Centre, ON]

Mr. Speaker, I will be sharing my time with the hon. member for Saint Boniface—Saint Vital.

I rise in the House today support of Bill C-2, an act to amend the Income Tax Act, or as I prefer to call it, an act to finally give a helping hand to middle-class families and those hoping to join the middle class.

Our government believes in listening to the people. For years, Canadians have been telling us one thing loud and clear: they need a hand. Middle-class families have increasingly been struggling to make ends meet. Too many families are having to make difficult choices: should they pay the rent or put food on the table; should they save money for their children's education or save for a secure and comfortable retirement; do they buy a new suit for their job interview or a birthday present for their son. These are not easy choices and they are causing stress and hardship for so many families.

I have the privilege of representing the riding of Scarborough Centre. We are a community of middle-class families. Scarborough families are exactly the sort of families that we need to be helping. We need to help families like one I met when knocking on doors in Scarborough last summer. I spoke with a mother outside her door in an apartment tower who told me how her husband was working full time at a warehouse and she worked nights in the service industry. They hardly got to see each other. Still, each cheque did not go quite far enough. She was trying to find a second job so they could keep up with the bills. However, she was worried about who would take care of her two young daughters while she was away. Like so many families I met, they are struggling with bills that are always going up and income that is not keeping pace.

Middle-class families are the backbone of our country. These are hard-working families willing to put in the long hours and make the sacrifices necessary to build a better life for their children. They value hard work and are instilling those values in the next generation. However, middle-class families have gone without a raise for too long. It is time we take action to help them.

I was honoured to stand with the Prime Minister at a grocery store in the Leaside neighbourhood of Toronto last fall when he promised the first act of a Liberal government would be to lower taxes for middle-class families. I am pleased to say, that promise made is a promise kept. That is Bill C-2.

As of January 1, nine million Canadians will be receiving tax relief. Bill C-2 amends the Income Tax Act to reduce the second personal income tax rate from 22% to 20.5%. It also creates a new personal marginal tax rate of 33% for taxable income in excess of $200,000. What does that mean? It means that in order to help those who need help the most we are asking the wealthiest to give just a little more.

We are also reversing the previous government's costly and misguided plan to nearly double the annual contribution limit for tax-free savings accounts. Raising the limit would only help the wealthiest Canadians at a cost of several hundred million dollars over the next five years, while doing nothing to help middle-class families. There are not many families in my riding who could afford to make the maximum $10,000 annual contribution to their TFSA, not when many are more concerned with paying the rent. In fact, in 2013, just 6.7% of eligible Canadians made the maximum TFSA contribution.

Our government was elected to help those who need help the most, and that is exactly what we are going to do.

Our tax changes will benefit over nine million Canadians in 2016. A single person will see an average annual tax savings of $330, and the average couple will save $540 every year. That is money that will help families pay the rent and buy groceries, and it will make it a little easier to put some money away for the future. It is a helping hand for those who need it the most.

Over the holidays I had the opportunity to visit the Scarborough branch of the Salvation Army, and the Dorset Park Community Hub in my great riding of Scarborough Centre. I saw so many young families visiting the food banks. I saw mothers pushing their children in strollers who needed help to put food on the table, and workers and volunteers struggling to keep up with the demand. It makes one's heart break to think those young children would be going hungry.

This is Canada. We can do better, we must do better, and we will do better. Bill C-2 and our middle-class tax cuts are just the beginning. There will be much more to come when the Minister of Finance brings the next budget to this House. A key element will be the new Canada child benefit, which will deliver targeted help to those families who need it the most. When fully implemented, the Canada child benefit will help nine out of 10 Canadian families, and lift hundreds of thousands of children out of poverty. Canada needs a healthy and prosperous middle class. When the middle class succeeds, we all succeed. We are blessed to live in one of the greatest countries in the world. We are blessed with a population that is educated, hard-working, and industrious. If we give them the opportunity to succeed there is nothing they cannot do.

This government was elected on a plan to grow the economy, and we have already started. With the changes to Bill C-2, a fair tax system, which asks the wealthiest among us to pay just a little more while giving help to families who need it the most, is being delivered.

With the upcoming Canada child benefit and our historic investments in transportation and social infrastructure, we are laying the foundation for economic growth and a stronger economy that will allow every Canadian to reach his or her potential to build an even stronger, more prosperous country.

I encourage all hon. members to join me in supporting this important legislation and middle-class families. Let us ensure that Canada's middle class gets the help it deserves.

The House resumed from January 29 consideration of the motion that Bill C-2, an act to amend the Income Tax Act and of the amendment, be read the second time and referred to a committee.

[John Nater, Conservative, Perth—Wellington, ON]

Madam Speaker, I am pleased to rise in the House today to speak to Bill C-2, an act to amend the Income Tax Act.

Since this is the first opportunity for me to address the House at some length, I would like to take this opportunity to thank the good people of Perth—Wellington for bestowing on me the honour of serving this House as their member of Parliament. In all I do, I pledge to the good people nothing but my hard work on their behalf.

As all members know, none of us can do this job without the love and support of our family. I am certainly no exception. I could not have gone through this 11-week campaign without the love and support of my wife Justine, who has been ever patient; my darling daughter Ainsley, who was a lot younger when we started the campaign and is growing like a weed; our extended family, my parents Bill and Darlene and my in-laws, John and Laurie; and our countless campaign team members, including people like Keith and Matt, Tim and Tim, Sue, Irene, Cynthia, Lee, and Ross.

The members of that team have all been with me throughout the campaign, working from sun-up to sundown on my behalf and on behalf of the good people of Canada to advance their vision for a more perfect country. They campaigned through all weather conditions, from the heat of the summer to snow our last week in the campaign. They were there with me and with us throughout the campaign.

The great riding of Perth—Wellington comprises a number of municipal organizations. We have seven lower-tier municipalities, two single-tier municipalities, two county governments, and dozens of small towns and villages. During the campaign, we criss-crossed it all. By election day, we had knocked on over 30,000 doors from Harriston to Harmony, Mount Forest to Milverton, from Stratford to Staffa to St. Marys, and all points between.

We heard one consistent message at the doors: families were concerned about the economy and they were looking to the government to extend a helping hand. At every doorstep, in every community hall, in every church basement, and on every main street, voters were not hesitant in expressing their views. They appreciated programs like pension splitting for seniors, income splitting for families, the universal child care benefit, and the first-time homebuyers' tax credit. Each of these initiatives provided targeted tax relief to Canadians who actually needed it.

Now we have a new government, and I think it is important to highlight some of the contrasts between the current government across the way and our previous Conservative government.

When our former Conservative government came to office in 2006, we also introduced a Bill C-2. That bill was the Federal Accountability Act. It strengthened conflict of interest rules, expanded access to information to crown corporations, increased transparency in lobbying activities, and overhauled political financing rules to ban not only corporate donations but union donations as well.

Now, let us fast-forward a decade and here we are with another Bill C-2. However, let us make no mistake. This bill is nothing but smoke and mirrors in an effort to implement a misguided and misleading Liberal campaign promise. Under the provisions of this Bill C-2, the most benefits would go to those people making a significant amount of money. Those making over $100,000 a year would be quite happy with the measures that would be brought forward in Bill C-2. However, for those families who are struggling, for those families in Perth—Wellington who are trying to get by on $40,000 or $45,000 a year, this bill would do absolutely nothing.

I said, when I was first elected to this place, that I would try to work collaboratively and co-operatively with all members of this House, but I simply cannot support a measure that is not in the best interests of my constituents. Let us look at my riding of Perth—Wellington and the people who have given me the honour of representing them. Under the provisions of this Liberal bill, as many as 84,000 of my constituents would see no benefit from the bill. Nearly 80% of the residents of my riding would have no tangible benefit from Bill C-2. That is why I am voting against it and why I think all members on this side of the House will be voting against it. We understand that we need to make bills and policy in the best interests of our constituents who have sent us here to speak on their behalf.

My riding is overwhelmingly made up of middle-class Canadians. They are people like Steve and Bettie from Listowel who have three children and are trying to save for their children's education and pay their bills. This bill would do nothing for them, but it would give people making $200,000 a significant tax break. This is wrong.

What is more, Canadians were told during the election campaign that these measures would be revenue neutral. We have found out that this simply is not the case. The parliamentary budget officer said that these Liberal measures would actually add $1.7 billion to the structural deficit that Canada's new Minister of Finance is quickly building.

Where will this $1.7 billion come from? Will the Liberals cut the tax credit for first-time homebuyers? Will they cut the tax credits for families who put their kids in sports and artistic activities? Will they cut tax credits for students or apprentices? We simply do not know, because they have not told us.

It is not just income taxes. Bill C-2 would reduce the contribution limit for tax-free savings accounts for more hard-working Canadian families and seniors. TFSAs have quickly become one of the most effective and popular savings tools. They allow families to save more for a rainy day, whether it is a down payment on a new home, money to make much-needed renovations to their existing home, or to plan for their retirement.

Do not just take my word on it. Experts in the business community recognize the value of a higher contribution limit for the TFSA. In fact, one chief actuary from a well-respected HR firm said, “I think it’s really quite a positive move for retirement security in general...”. Who said that? It was the chief actuary from the Toronto based HR firm Morneau Shepell. I would encourage our finance minister to perhaps talk to his former colleagues about the benefits of the TFSA and the increase in contribution limits for all families.

During this past election, I spoke often about TFSAs and often got the most positive response from young people, those who recognized this was an effective tool for them to save for their future. It is ironic that the Liberal government, which claims to represent the millennial generation, would rather give millennials a selfie than an effective and worthwhile savings tool.

In December, I received an email from a constituent, Tyler, from Mount Forest. He told me the reduction in the TFSA limit would personally affect his ability to save for the future. This is simply not right.

Bill C-2 does nothing to provide meaningful tax relief to the Canadians who actually need it. It leaves way too many Canadians out in the cold. That is why I am proud to vote against the bill and in favour of my constituents in Perth—Wellington who will not benefit from it.

[Karina Gould, Liberal, Parliamentary Secretary to the Minister of International Development]

Madam Speaker, I will be sharing my time today with my colleague, the member for Honoré-Mercier.

Madam Speaker, I am honoured to be able to take this opportunity to speak about the government's middle-class tax cut, a tax cut that would provide needed tax relief to nine million Canadians.

First, I would like to elaborate on our government's ambitious economic agenda that sets Canada on the path of economic growth.

No one will be surprised to hear me say that the Canadian economy is going through a difficult period, some regions more than others. While there are encouraging signs with our biggest trading partner, the United States, which is facing an upswing in its economy in 2016, there remain concerns that slower growth in certain emerging markets such as China has the potential to stifle prosperity. Also, the Bank of Canada revised downward its economic forecast twice over the last 12 months and undertook two rounds of interest rate easing.

Nevertheless, in the face of this real challenge, there is a real opportunity to put in place the conditions to create long-term growth, growth that will create good jobs and help our middle class prosper, the lifeblood of our economy. Indeed, the good news is that we were elected on a plan to grow the economy, and we have already started.

In December, we introduced the middle-class tax cut. This amendment to the Income Tax Act is what we are to discuss in the House today.

After 10 years of weak growth, our government is redoubling its efforts to ensure that Canada is poised and prepared to compete and succeed in these challenging economic times. However, it is clear that we cannot go at it alone. It means that we need collaboration.

A key component of our plan is to work closely with provincial and municipal governments to deliver results for Canadians. From infrastructure projects to responsible environmental stewardship, we are providing needed leadership. Our government will work in a renewed spirit of collaboration with our provincial and municipal partners. That work has already begun, with the first ministers' meeting held by our Prime Minister shortly after our government was sworn in, as well as by the finance ministers' meeting just before the Christmas holidays.

Our priority is to implement our agenda while pursuing a responsible fiscal plan suited to the challenging economic times. Indeed, we fully intend that our plan for economic growth will benefit all Canadians through targeted investments.

Let me reassure members that our government is not daunted by the challenges before us. We are cognizant of our fiscal realities and we know that our plan is more important than ever. We will work together with both the private sector and our provincial and municipal counterparts to advance our shared priorities across a range of fronts. Some of these areas include making targeted investments in public infrastructure that will grow the economy, get Canadians moving, and open up more cost-efficient trade options for our exporters, with the focus on public transit, green infrastructure, and social infrastructure.

Working together with all of the provinces and territories for a cleaner environment and to fight climate change, Canada has a plan to invest additional funds each year in clean technology producers so they can tackle Canada's most pressing environmental challenges and create more opportunities for Canadian workers. The government will also invest to support innovation and the use of clean technologies in the natural resources sector.

As our Prime Minister has emphasized, a strong economy and healthy environment go hand in hand. We are committed to leaving our children and grandchildren with a more sustainable and prosperous country.

The government's plan will be realistic, sustainable, prudent, and transparent. The plan will also include further details on measures that are intended to steer Canada toward a more prosperous, inclusive, and sustainable economic future.

Before turning to the contents of Bill C-2, I would like to mention that the government's plan includes proposals to create a new Canada child benefit. We aim to have payments under the new Canada child benefit begin in July 2016. The proposed Canada child benefit would simplify and consolidate existing child benefits. It would replace the universal child care benefit, which is not income-tested. The new Canada child benefit would be better targeted to those who need it most.

Our government will also be working collaboratively to implement the Canada child benefit, which will lift hundreds of thousands of Canadian children out of poverty and place them on a surer footing for a brighter future.

We are committed to a strong and growing middle class. We want to ensure that all Canadians have a fair and real chance to succeed. The legislation before the House today takes an important first step in this direction. Bill C-2 would cut the tax rate on income earned between $45,000 and $90,000 in 2016 to 20.5% from 22% and introduce a new tax rate of 33% on income in excess of 200,000. As of January 1, the government is putting more money in the pockets of about nine million Canadians each year through our middle-class tax cut. This is the smart and fair thing to do.

Recently, the Minister of Finance and the parliamentary secretary travelled across the country asking Canadians directly what our government can do to better support the middle class. They met with indigenous leaders, business leaders, cultural leaders, with the intent of putting Canadians' views front and centre and engaging in discussions to find practical solutions to the challenges and opportunities they are facing. These pre-budget consultations continue online. The response rate and comments received have been tremendous. With over 146,000 Canadians reached to date, this has been the largest pre-budget consultation on record.

Through these consultations, Canadians confirmed that they want a government that delivers on strengthening the middle class and helping those working hard to join it. The measures in this bill would help strengthen the middle class. That is a priority for the Government of Canada.

During the pre-budget consultations, it also became increasingly clear that Canada's economic outlook has changed since the election. This only reaffirmed the government's commitment to the path we were elected to follow, but, more importantly, by engaging with Canadians we have been able to consider new perspectives and refine our plans to be included in the future federal budget.

The government's approach to consultations recognizes that collaboration is essential to delivering real change. The government has committed to and already demonstrated its willingness to listen, engage, and collaborate with members from all parties to identify ways to find solutions and avoid escalating conflicts unnecessarily. Given what we have already heard from Canadians and many members of other parties, I look forward to discussing and debating how best to serve Canadians.

The tax relief proposal in this legislation would help millions of Canadians. It would give middle-class Canadians more money in their pockets to spend, invest, and grow the economy. I encourage all members of the House to vote for this important legislation.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, today I will be sharing my time with the hon. member for Dauphin—Swan River—Neepawa.

I am honoured to rise today to speak on Bill C-2. This is my maiden speech, and I wish to start by thanking the people of Elgin—Middlesex—London for giving me the opportunity to represent them in the House of Commons for the next four years.

I would not be here if not for the amazing volunteers and friends, but most of all my incredible family. To start, I know that as I speak today my mom and dad are watching these proceedings. I would like to thank my parents, Patricia and Harold Martyn, for all of the opportunities and support they have always given me. As the daughter of people who farm turkeys and pigs, I understand hard work and commitment, and I thank them for instilling these values in me. Whoever thought the girl from Sparta would be sitting in the House of Commons.

To my siblings who have always held me accountable, and doing so with love, a huge thanks for believing in me: Linda, Ann, Paul, and my in-laws, Greg, Scott, Trish, Lisa, Pete, and David. I thank them all. To Sandra and Bill, a.k.a. Nana and Pops, who have always been there for me, I love them both.

Making this decision to get into federal politics was not an easy decision, but I truly had a head start. My mentor and former boss, Joe Preston sat across this aisle from 2004 to 2015. “Trust me” was a common phrase used daily in our discussions. Today I would like to thank Joe for encouraging me. Without his support, this would not have been possible.

Now for the hard part, naming the people I miss every day as I serve this amazing country: Dakota, Garrett, Marissa, Hannah, and Christian. I hope from this new chapter of my life they will realize that anything is possible, will believe in themselves, and surround themselves with good people. I cannot wait to see what the future holds for them.

Finally, to Michael, my better half, the guy from band camp whom I married, I miss our evening walks, but I am definitely thankful for Facetime, or this journey would never have been possible. Although we are 640 kilometres apart, he is always with me. I believe in him, just as much as he believes in me, and I look forward to kicking off our bucket list in the next 20 years.

Elgin—Middlesex—London is an incredible riding. It is filled with beautiful lake harbours, rich agricultural land, small and large vibrant businesses, but most of all, great people. The volunteers not only on my campaign but throughout this riding helped mold me and educate me.

I would like to personally thank all the people who got me here, including Brian, Fran, Francine, Marci, Whitney, Jeff, Jen, Betty, Ena, Blake, Bob, Mae, Terry, Reinhardt, Dan, Shirley, Dean, Bridget, Melissa, and all the residents on Crescent Ave. I thought if I went fast, no one would know if I missed them. I send a special thanks to Ninja Turtle Noah, Maddie, Lauren, and Sarah.

To the ladies in the office, Cathy, Kaylie, Jena, and Kim, knowing that they are a part of the team makes me confident that Elgin—Middlesex—London is in good hands.

It is with all of these wonderful Canadians in mind that I stand in the House to oppose the proposed alterations to the Income Tax Act. Canadians have utilized the tax-free savings account since its introduction in 2009. This program has provided Canadians with incentives to develop attitudes of economic responsibility.

TFSAs are helpful tools for Canadians who are seeking to save or are preparing for unforeseen economic vulnerability, a tool used by many of my constituents in Elgin—Middlesex—London, both young and old.

The current Liberal government has proposed a reduction in the maximum amount of funds that Canadians can invest in these accounts per year. Unfortunately, the government does this on the false pretence that doubling of the TFSAs only benefits the highest earning Canadians rather than just the middle class.

On the contrary, statistics demonstrate that this investment tool is utilized by many middle-class Canadians. Half of those holding TFSAs earn less than $42,000 a year. In fact, 60% of Canadians who take advantage of the TFSA's limit earn $60,000 or less a year. What is more, in 2015, 600,000 Canadian seniors invested in TFSAs, maximizing their yearly deposits while earning less than $60,000 a year.

CARP, Canada's association for the fifty-plus, was in favour of increasing the limit the TFSAs to help seniors form fiscally responsible plans for the future. When the Conservatives raised the limit on TFSAs, the majority of Canadians supported that decision. Lowering the limit on TFSAs will do absolutely nothing for the low-income families, including financially burdened Canadians, to which the government must remain accountable.

The proposed changes in Bill C-2 will negatively affect Canadians by noticeably reducing their incentive to save for the future, creating a heavier reliance on government support during financial crises. Further, it will limit the choice of Canadians.

Why put up roadblocks for people who want to engage in responsible saving practices? Why remove the sensible avenue for saving, which costs the government very little?

Bill C-2 would do more than limit the choices available to the middle class. It would also reduce the amount of attention given to the vulnerable people in Canadian society. Instead of worrying about nitpicking a program that already works for Canadians, the Liberal government should be seeking out programs and initiatives that would actually aid in giving a hand up to this country's most vulnerable people.

The current government needs to continue to support programs such as the housing first initiative, which was undertaken by the previous Conservative government. This initiative was directly aimed at ending homelessness by identifying those most desperate in Canadian society and ensuring they were given a real opportunity for self-advancement. By seeking out these programs, the current government would have the ability to ensure that its efforts to end social issues do not go a mile wide and an inch deep. Spending well, rather than just spending, is the key to improving social issues today. Unfortunately, spending responsibly does not seem to be the current government's strongest attribute.

These tax cuts are aimed at making the public feel better about Canada's current position during this time of economic uncertainty. However, these cuts are not enough to provide true relief for Canadians being affected by the dipping dollar. It will take much more than just tax cuts to regrow the Canadian economy. This remedy is a mere surface solution to a much more serious problem.

Even more indicative of the Liberals' spending habits are the alterations to revenue that Bill C-2 would cause. Originally, the Liberals claimed that their new tax programs, including the lowering of the ceiling of the TFSA, would be revenue neutral. However, the tax bracket changes contained in this bill would actually cost the government $8.9 billion in the next six years. Since the government failed to accurately project and report these financial results, why should we trust the Liberals' promises that they will aid Canadians in the long run?

My constituents in Elgin—Middlesex—London have addressed this issue to me personally and are concerned about these changes. All age groups from all tax brackets have been using this method of saving their money for the future. Young adults have been putting their money away through TFSAs to invest in new homes, families have been using it to invest in their children's education, and many have been using it as retirement tool.

As the official critic for families, children, and social development, I can assure members that I have spoken to many constituents and Canadians who want to see the ceiling of the TFSA contributions remain at $10,000 per year.

I look forward to continuing to hear from my constituents in the great riding of Elgin—Middlesex—London and to working with all Canadians in my new role. I would like to thank this House and my hon. colleagues for indulging me and for the opportunity to speak to this very important piece of legislation that would affect all Canadians.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I am assuming that my hon. colleague is new to the House. I have yet to hear a Conservative talk about the drawbacks of a particular tax break. That is a new one to me. Nevertheless, I will address the issue at hand.

During the campaign, we talked about how the tax savings measures we are talking about are a benefit, as most economists would say, to the middle class. I would like to remind him that the Canada child benefit is going to provide a great benefit to all Canadians with young families, as we talked about earlier.

The Conservatives continue to brag about the 2% off the GST. I was wondering if perhaps my hon. colleague would like to stand now and talk about the benefit that provided.

We are talking about thousands of people being lifted out of poverty, despite the numbers he puts out there.

In this particular situation, this is a great way for us to begin to invest in the middle class by providing the tax relief contained in Bill C-2 and by providing the benefits we will announce in the budget. I guess the overall answer for that is to stay tuned.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I did not have a chance the last time I spoke in the House to thank the constituents of Coast of Bays—Central—Notre Dame for putting me back in office. I would like to do that now. The vast majority of them have been doing so for five elections now. I keep testing the limit every time I run out there. Nevertheless, I want to thank them for their generosity and for giving me the opportunity of a lifetime to represent them in the House of Commons in the nation's capital. Indeed, it is the opportunity of a lifetime for all of us to sit in the House of Commons.

I am honoured also to talk about a bill this morning that we talked about much during our campaign. We talked about it as a way of helping the middle class of this country grow Canada's economic engine. We faced challenges as we started the campaign, and the challenges continue to this point. Right now, we have challenges in certain aspects and geographic areas of this country that are certainly unprecedented. I talk of the price of oil and natural gas. I also talk about the fact that many of the provinces also find themselves in a precarious situation given the fact that a lot of their revenues are based on royalties and taxes they collect from this particular sector. We also have a low dollar, something that for many people may produce some opportunities but in other cases could provide many challenges. It too is at an unprecedented level of less than 70¢ to the American dollar now.

I want to talk today about Bill C-2 and some of the measures we hope to bring forward that would provide some tax relief to Canada's middle class. As I said before, the middle class is the economic engine of this country. When I say the middle class is the economic engine of this country, I am talking about the individual talents of those individuals and their ability to provide a living for their families.

For example, in my area of Newfoundland and Labrador the greatest exports right now in dollar value alone would be seafood exports. We also have mining and forestry and many other sectors with great exports. To be honest, one of the greatest and most exciting exports that we have right now in central Newfoundland, the area that I predominantly represent, is the people and their talents.

We do have skilled people in the oil and gas sector but we also have many skilled people in other sectors such as mining. They have a skill and a trade that they export around the world. Each and every week I travel from my home riding to Ottawa or to other parts of the country, I run into people that I have grown up with or I talk to people that I have met in my tenure as a member of Parliament. These people talk to me about the areas where they have been or where they are going, such as Russia, the North Sea, northern Africa, or Alberta, Saskatchewan, and British Columbia right here in Canada. In the field of hydroelectricity, they have travelled to Quebec and Manitoba. It is phenomenal how they do this. They travel vast distances. They go away for weeks at a time then return home and bring that wealth home with them. This a precarious position for them right now given the situation in the oil and gas sector. Some people would say that the reason they have created that value is the oil and gas itself, but I would disagree. What created that value for them was their own talent and ability to adjust to the world markets. On the one hand, I am worried about the price of oil and gas in this country and around the world, but on the other hand I am not worried because of the versatility these individuals have shown over the past while. The majority of them are certainly in that middle-class income bracket.

I am pleased to participate in this important discussion on the government's middle-class tax cut. My objective today is twofold. First, I want to provide the House with a quick assessment of our economic and fiscal situation and, second, I want to tell members why the middle-class tax cut would help grow our economy.

As we embark on an agenda of economic growth and long-term prosperity, there is no doubt that we are facing considerable headwinds as I discussed earlier. Globally we continue to experience what International Monetary Fund Managing Director Christine Lagarde famously called “the new mediocre”. In its latest economic outlook in January, the IMF expects global growth to pick up modestly to 3.4% in 2016 and 3.6% in 2017. This is down point two percentage points for both 2016 and 2017, compared to its October 2015 world economic outlook.

Though the recent performance of the U.S. economy is encouraging, the European and Chinese economies are cause for concern. We have seen this happen in Europe now for the past seven years and most recently with the Chinese economy. Although China's GDP is very large and is still growing, it is not growing as much as it did in the past four to five years. Many if not all of of us here have experienced the benefit of global trade and have had conversations with people in business in our ridings who deal with many Chinese companies. Members, of course, know of what I speak.

As I mentioned earlier, global crude oil prices remain at less than half of what they were in mid-2014 due to persistent global oversupply and softening demand. What is happening beyond our borders has real and tangible consequences for us all.

In Canada, our economic performance in the first half of 2015 was poor, mainly due to the collapse of oil prices in 2014. Consider this. Last April, just to put some numbers on this, the government projected an oil price of $71 a barrel by the end of this year. As I speak, oil is now trading at about $30 a barrel, less than half the projected price. As I mentioned earlier, coming from Newfoundland and Labrador, I know how we are hit directly and indirectly by the resulting large hole in our provincial budget. We are directly hit, of course, because our offshore exploration has diminished and it is our offshore supply that directly benefits us in the way of royalties and taxation for our province, and indirectly through the employment that it creates, including for individuals who travel around the world in this particular sector.

We know that growth will be lower than was expected in the last budget projections. This has important implications for our currency and our fiscal situation. The good news is that real GDP growth resumed in the third quarter of 2015. The IMF, it its latest economic outlook released January 19, expects growth in Canada to pick up over the next two years in relation to 2015. We also maintain an enviable position of having a low debt-to-GDP ratio, abundant natural resources, and one of the most educated, intelligent workforces in the world.

Our policies will strike a balance between fiscal responsibility and controlled investments that promote economic growth. One of the most important components of this is restoring middle-class economic progress, which is, as we all know, the backbone of our economy and has been since our inception for close to 150 years now.

This is why one of the government's first orders of business back in December when we arrived was to table a notice of a ways and means motion to cut taxes for the middle class. This was the right thing to do for our economy. The proposed middle-class tax cut and accompanying proposals will help make the tax system fair so that all Canadians have the opportunity to succeed and prosper.

Specifically, Bill C-2 proposes, first, to reduce the second personal income tax rate to 20.5% from 22%; second, to introduce a 33% personal income tax rate on individual taxable income in excess of $200,000; and third, to return the tax-free savings account annual contribution limit to $5,500 from $10,000 and reinstate indexation of the TFSA annual contribution limit.

I will expand on the three points.

The first one is the reduction of the the middle-income tax bracket, which is taking effect January 1. It is expected that about nine million Canadians will benefit from this measure in 2016. Single individuals will see an average tax reduction of $330 per year, and couples will see an average tax reduction of $540 per year.

Second, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000 per year. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold will be indexed to inflation.

Third, the government is returning the tax-free savings account annual contribution limit to $5,500 from $10,000, effective January 1, 2016.

These are some of the issues that we discussed during the campaign, including my colleague for Cape Breton—Canso. He was just here and talked incessantly about how wonderful his riding is and how hard it is for him to get around his large riding. He likes to talk about all these new policies we are bringing in to help the middle class in that beautiful area known as Cape Breton.

I can reassure members that the change to the TFSA is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. However, returning the TFSA annual contribution limit to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it the most. When combined with other registered savings plans, which we are all familiar with, the $5,500 TFSA annual contribution limit will permit most individuals to meet their ongoing savings needs in a tax efficient manner.

Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time. This is referring to the consumer price index and how we will tie the limits to the increase in inflation.

Finally, before I conclude, I would like to highlight some of the other measures that are included in today's legislation, Bill C-2.

The bill proposes to change the current flat top rate of taxation rules applicable to trusts to a new rate of 33%, which is in line with the 33% tax rate as we proposed. The bill proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate. Finally, it would increase the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

Also, the government will introduce proposals in the upcoming budget to create a new Canada child benefit, which will take all of the benefits and put them into one tax-free Canada child benefit. This is something that has been talked about in my riding for quite some time. The biggest complaints were about benefits from government that suffered from tax clawbacks, which affected all benefits no matter what they were. We have now put forward this Canada child benefit that puts the tax aside for the sake of and benefit of our families. I look forward to the budget in the spring to talk about this.

Of course, nowadays there is an added pressure regarding things such as child care and child spending. Therefore, this is one of the proposals I look forward to in the upcoming budget that we talked about in the campaign, which Canadians overwhelmingly accepted as a way of financially helping themselves during their child-rearing years.

All these initiatives demonstrate that our sights are clearly set on the future. This legislation will help strengthen the middle class by putting more money in the pockets of Canadians to save, invest, and grow the economy. More broadly, it will help grow our economy in the context of a difficult global economic climate so that all Canadians benefit.

I heard some of the debate earlier, and I appreciate some of the concerns the opposition put forward. Of course, we have taken a strategic approach to provide a benefit to middle-class Canadians, especially those facing tough times.

To address these tough times in the future, I look forward to the budget, as I mentioned earlier, with things such as the Canada child benefit, which I think will enhance a way of life for those bringing up children now. For those who are suddenly unemployed, the situation is very difficult. As we deal with the situation in the next few months and certainly within the next few years, my colleagues, no matter what party they belong to, would certainly agree with me that we have challenging times ahead.

Again, for those provinces dependent on revenues from the oil and gas sector, and I speak of Alberta, Saskatchewan, and my own province of Newfoundland and Labrador, there are difficulties ahead, certainly when it comes to social programs. There will certainly be added pressure, but we believe that measures taken, such as those contained in BillC-2 and in the upcoming budget, will help to alleviate some of those concerns.

For the budget coming up, consultations are going ahead. I would advise all members to conduct consultations in their ridings, as I will. It is a perfect opportunity to get back to our ridings as members of Parliament. I am travelling to 15 communities in an area the size of Germany. I wish all members the best, because I know that travel can be very taxing on our families, but it is certainly worth it.

In my situation, I know what I will hear. I will hear a lot about the resource sector. I am going to hear a lot about the challenges that lie ahead but also about things like skilled trades and infrastructure spending to help spark the economy and to help communities deal with transit and their future investments.

I will leave it at that for now. I look forward to the questions and comments from my hon. colleagues.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I am very pleased to rise in the House as the NDP's finance critic to debate Bill C-2, which was introduced in December and which is now being debated in the House.

I had the opportunity to ask the Minister of Finance a question earlier today after his opening remarks. Unfortunately, I did not get an adequate answer. I did not get an answer to the fundamental question raised by this bill: how does the Liberal Party define the middle class?

This is a fundamental question, because since the election, the Liberal Party, which now forms the government, has boasted about making tax cuts for that much talked-about middle class. However, as the Parliamentary Budget Officer's report very clearly and succinctly states, the middle class will get nothing from the tax cuts the Liberal government is promising.

With Bill C-2, there is the good and there is the bad. I will start with the bad, and then talk about the good.

Any definition of the middle class must be based on a common definition. One way to define it would be to use the median income, which is $31,000 a year per person in Canada. That means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.

Will someone earning the median income benefit from this tax cut? No. In fact, those earning $45,000 or less a year will not benefit at all from the tax cut promised by the Liberals. Even those earning between $45,000 and $90,000 a year will only receive part of what was promised. The devil is in the details. In reality, someone earing $50,000 will probably only receive twenty or thirty dollars.

Taxpayers earning more than $90,000 a year will benefit the most from this tax cut. Even someone who earns $200,000 a year will receive the maximum from this tax cut. An individual would have to earn $210,000 a year before receiving less, due to the new tax bracket, but they would still still receive a large part of this reduction.

If we take this definition of the middle class, whose members earn around $31,000 a year, and exclude all those whose income is among the top 20% and those whose income is among the bottom 20%, then we have a middle class that makes up 60% of the population. The range of income of that middle class would be between $20,000 and $60,000 a year. A very small portion of those people would benefit only slightly from the tax cut.

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.

When the ways and means motion was tabled, we made a counter-proposal because if we really want change, and considering that on October 19, Canadians voted for a tax cut for the middle class, then this tax cut has to be given to the middle class.

That is why we proposed a change to the Liberal proposal. Instead of targeting the second tax bracket, as the Liberal government wants to do, we should change the first tax bracket so that a larger portion of the population can benefit from such a tax cut. Our proposal seeks to reduce the first tax bracket from 15% to 14% to ensure that all taxpayers, those who pay income tax, can benefit from this change.

Our proposal seeks to give people earning the median income a tax cut as high as $250 annually, as those people are currently receiving nothing.

Someone who earns $200,000 per year and who will get a tax cut worth about $600 would be forced to pay a portion because of the higher tax rate and the new bracket that we would leave in place.

It is clear that the Liberals' proposal is merely a smokescreen. In his response to my question about the Liberal Party's definition of the middle class, the minister did not answer the question. He simply said that this is just the first step and that the next step is the child benefit. We have not seen that yet. Maybe it will actually be a good thing for families with children, or maybe not—we will see. However, that does not answer my question.

This measure will not really help the middle class at all. A child benefit might help families with children, but it will not do a thing for single people, couples without children or seniors. Any of those people who earn less than $45,000, and especially if they earn less than $90,000, will not benefit at all from the Liberal promises for the middle class, even if their income is lower.

It is important to look at everything the Liberals are proposing. We believe that our proposal would help the middle class much more effectively than the Liberal measure, which, as I said, will benefit only the top 20% of income earners and do very little for everyone else.

I began by talking about the bad, and there is a lot of it, but now I would like to talk about the good, and one key measure that we support in this budget. I am talking about dropping the contribution limit for tax-free savings accounts, or TFSAs, from $10,000 to $5,500. We regard TFSAs as a useful tool for saving, and they should be used for that purpose. However, what the previous Conservative government proposed, raising the contribution limit to $10,000, is very harmful to Canada's public finances and does very little to help taxpayers and investors who want to use that tool.

This is because anyone can open a TFSA, and among those who can afford to do so, only 7% are contributing the maximum at this time. This measure is extremely costly. The numbers speak for themselves. In 2020, if the limit stays at $10,000—and it could even be indexed later on—it is estimated that it will cost the Canadian treasury $2.3 billion, all for a single investment tool that benefits only a small minority of Canadians. In 2030, 10 years later, the lost revenue or tax expenditures are estimated to be $9 billion. In fact, the parliamentary budget officer, whose job it is to study the impact this would have on the Canadian treasury, went as far as to say that in the medium term—I am talking about 2040-50, since the horizon might well extend that far ahead—tax expenditures, which is income lost by the Canadian government, will account for nearly 0.7% of GDP.

I would like to point out that this House is not budging and that previous governments did not budge on the issue of international aid and reaching the target, which was set at 0.7% of GDP under the agreements. The previous government considered it to be too costly to move forward on that. We were never even close to the 0.7% target. According to the parliamentary budget officer, with the TFSA alone we would reach 0.7% of GDP in foregone revenues, those revenues that would no longer be paid to the Canadian government, by 2040-2050. The TFSA is a savings vehicle that we fully support. However, if we were to head in the direction that the Conservative government proposed, it is a measure that could be extremely debilitating for Canada's fiscal capacity and its ability to provide the quality programs and services that Canadians expect.

As I was saying, the TFSA is a beneficial savings vehicle. The $5,500 contribution limit, indexed to inflation in $500 increments when this amount is reached, is quite adequate. Only 7% of Canadians currently contribute the maximum. If we look at just individuals who have already opened a TFSA, only 17% of them contribute the maximum. Increasing the contribution limit will only help the 17% who already contribute the maximum. Thus, this is a very expensive measure that very few people take advantage of.

If I am dwelling on the tax-free savings account, it is probably because outside of the tax cut in Bill C-2, it is the key issue in terms of finances. The TFSA is a useful tool for promoting savings and a tax shelter appreciated by those who use it properly. However, it could also become a means of tax avoidance, and that is what we must prevent.

I say that, because when we are talking about $10,000, which will one day be indexed, a lot of Canadians see the tax-free savings account as an account where they put after-tax money, which will yield non-taxable interest. They can then withdraw that money as they see fit, which is not a bad thing. However, what these people often do not know is that you can put many things other than cash in these accounts. You can put in stocks or financial instruments, and anyone who can afford it can put up to $10,000 in stocks, for example, into a tax-free savings account and enjoy capital gains that will not be taxed within that account.

Right now, 50% of capital gains are taxed, at a rate of about 40%. The TFSA can be an attractive vehicle for those who want to avoid paying tax on capital gains and are able to contribute up to the limit of $10,000, in which case they do not really need to save.

In that sense, the TFSA can be useful for Canadians, and that is why we support it. However, we want to prevent these accounts from becoming a way for people to avoid paying taxes, and that is why we oppose increasing the contribution limit to $10,000. We think that the $5,500 limit is a perfectly adequate way of helping Canadians who want to ensure their future financial security.

Let us remember that there are also other savings vehicles, such as RRSPs. These private savings are one of the main ways to ensure one's financial security. Others include company pensions, the Canada pension plan, the Quebec pension plan, and old age security, which can be supplemented with the guaranteed income supplement.

If we tally the good and bad points that I talked about earlier, it is clear that the Liberals' decision to reduce taxes for the richest 20% and increase them for the richest 1% is not an appropriate measure if the government really wants to help the middle class.

Eventually, under an NDP government, there will be a way to review this decision and really help the middle class. We are extending an olive branch to the government here, because the other thing that could be done is to make the necessary changes in committee so that we can come back to the House and adopt a measure that will really help the middle class.

We are therefore going to resubmit this proposal in committee for review. It is largely based on the excellent work done by the parliamentary budget officer.

Lowering the TFSA limit is extremely important from a tax perspective in order to ensure that the Canadian government can offer these services, function properly, and ultimately, or so we hope, make significant reinvestments in areas where the Conservatives cut funding to the bone or even deeper.

That is why we will support the bill at second reading. We hope the government and its members will be willing to listen in our committee meetings. This would eventually open the door to amending the provision to lower taxes for the richest 20% of Canadians and instead helping 80% of Canadians, many of whom are getting nothing right now. Of course we will support the second measure, which is to lower the contribution limit for TFSAs.

This is the first bill introduced in this new Parliament. I truly hope the government will take a new approach. I think all parliamentarians have already noticed a change in tone and dynamics, which is very much appreciated. However, after four years of hearing meaningless slogans and catchphrases to try to justify things that are simply not supported by the facts, we might still be in for another four long years.

This morning, when the Minister of Finance introduced Bill C-2 and delivered his speech justifying the tax cut, I was hoping he would at least understand or acknowledge the auditing work done by the parliamentary budget officer, but that was not the case.

I wish he would accept a fact that has been proven over and over. The middle class will not benefit from these measures; only the richest 20% will. The facts prove it. The parliamentary budget officer proved it, and we ourselves proved it before the report was released. He wants to stay the course and perpetuate the myth that the middle class will benefit. This is a snow job.

A lot of Canadians are going to be surprised and disappointed when they fill out their income tax returns. They thought they voted for a party, the Liberal Party of Canada, that would give them a tax cut, but they are going to find out that they are not eligible. A good 80% of people will find out that this does not apply to them. I predict some nasty hangovers for them.

I sincerely hope that the government will pay more attention to the opposition parties, especially when we are trying to help by suggesting improvements that should help the government achieve its goals. I would like it to say so publicly.

The most disappointing thing about the Minister of Finance's speech is the fact that he is trying to deal with the problem by sending up yet another smokescreen. We have not yet seen the Canada child tax benefit, which is really just going to be a remix of existing programs. That is still nothing but a promise.

The fact is that only couples with children and single-parent families will benefit from this money. Those people will be happy to get some extra money. Couples without children, singles without children, and seniors, even the poorest of them, even those who earn, say, $45,000, $30,000, $20,000, or $10,000, will get nothing. They will not get a tax cut, nor will they benefit from the Liberals' upcoming measure.

I would like the Liberal government to be consistent, to respect the Canadian public, and to tell the truth about the real impact of the measures it is introducing. This was the government's first opportunity to do so. I think it has missed its opportunity, but it will have another chance in committee. I hope that the government will be listening. If the government continues in this direction, I think that the next four years will be very long and full of hype, catch phrases, and empty rhetoric, but very thin in terms of measures that will truly help Canadians, especially middle-class Canadians and those with such low incomes that they struggle to make ends meet.

I look forward to questions from my colleagues in the House, but I want to reiterate that we will support the bill at second reading, because it maintains the TFSA contribution limit at $5,500, which has considerable tax implications, and we will try to make changes to the bill in committee.

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.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Mr. Speaker, it is a pleasure to rise in the House today. Having listened to the finance minister's comments, I will set aside my initial speech to respond to a couple of those comments.

The minister commented on how the middle-class tax cut would be revolutionary for Canadians. Finance Canada estimates this to be $6.34 a week in tax relief to middle-class Canadians. That is less than $1 a day. In the minds of the finance minister and the Liberals, $6.34 a week is revolutionary.

Today I will divide my speech into separate parts. In the first part I will talk about tax-free savings accounts. In the second part I will talk about the housing market in Canada relative to what tax-free savings accounts provide for individuals. The third part will deal with the middle-class tax cut. However. I could not resist the opportunity to put it in actual numbers that everyday Canadians could understand because the finance minister relied so heavily on it in his speech. Again , it would be $6.34 a week, less than $1 a day. I will then go on to talk a bit about how this would affect Canada under the current economic situation, gathering momentum toward what I will call the fiscal mess and who will pay for it.

I will wrap up my remarks with a general comment about understanding what the Liberal tax plan is really all about.

Throughout my speech today, I hope to cut through the rhetoric that we hear coming time and time again from the new government and talk in terms of real life through the eyes of hard-working Canadians, people like my constituents, who come from largely working-class families. My community of Brantford was born out of industry, hard work, and immigrants, who have worked two or three jobs to raise their families. It is not the most affluent community in the country, but it is the most resilient and one of the most hard-working. I like to describe its makeup as one of the most opportunistic and humble communities in the country.

Not all members in the House were around when the late Jim Flaherty first unveiled the tax-free saving account, but I remember it quite vividly as a historic occasion. I will take this opportunity to remind the House just how popular and widely celebrated this savings vehicle was and is today.

Experts from across the board were unanimous. Tax-free savings accounts represented the most revolutionary savings vehicle since the registered retirement savings plans of over 50 years ago. These accounts were an enormous step forward for the middle class to support a wide array of their financial goals, including but not limited to saving for school, their children's futures, a home, or a comfortable retirement.

The strength of tax-free savings accounts is that when the money is withdrawn, it carries no tax penalties. It is basically tax-free just as the name of it suggests. Another major strength is that tax-free savings accounts offer enormous flexibility, which was lacking in RRSPs. According to experts, tax-free savings accounts can fill any number of short-term and long-term savings goals. Unlike the RRSP, money in a TFSA can be used as collateral, while at the same time, investments in TFSAs are not counted as income to qualify for government benefits or pension supplements that carry a means test. Again, they are not to penalize the most vulnerable people in our society but to add to the free choice of how Canadians can save.

Experts in retirement planning are unanimous that the tax-free savings accounts are a valuable tool to reach personal retirement goals. Our government's efforts to continue growing this revolutionary savings tool represented a major step forward for middle-class Canadians, in particular, Canadians saving for their retirement.

The new government's approach to retirement savings is completely off base. On one hand, it supports the wrong-headed approach of the Government of Ontario to force all workers into a new government-sponsored pension scheme that will cut take-home pay and foist upon and force employers to cut jobs or go out of business in some cases. On the other hand, the Liberals would cut a widely-acclaimed revolutionary savings tool designed to support Canadians in whatever their own unique savings goals might be.

Tax-free savings accounts have been so popular in our country since the beginning, that over 11 million Canadians have opened accounts. However, the Liberals have have said that only the rich can afford to put more into tax-free savings plans, and this, again, is absolutely false. It is an argument that is ignorant to the real cost of saving for a home or retirement, and it is an argument that is not supported by the facts.

I will allude to the speech from the Minister of Finance. I appreciate him coming into the House and explaining the platitudes of all of this, and repeating the rhetoric of the election campaign, but let us hit the facts. The facts are, as I have mentioned, that 11 million Canadians opened tax-free savings accounts. In 2013, people earning less than $80,000 a year accounted for 80% of TFSA holders, and 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000. Those are the facts. I did not hear this from the Minister of Finance.

Our motivation in doubling tax-free savings accounts was to build on the momentum of this incredible savings tool for middle-class Canadians in order to give them greater incentive to save and provide retirees with a higher rate of tax-free income. However, this is where we get into the argument of whether the government should be involved in making those decisions, or should individuals. We believe individuals should make those decisions, not the government.

Our motivation in doubling tax-free savings accounts was to build on this momentum. The Liberals' motivation in cutting tax-free savings accounts appears to be nothing more than looking for ways to fund a Liberal spending spree.

I will give credit to the Minister of Finance this morning. He did mention in his speech the fact that had the new limits for tax-free savings accounts been honoured as positive changes, the government revenues would have gone down, a concern by the Liberal government that this takes revenue away from the federal government, instead of thinking about middle-class working Canadians on the ground trying to save for their future and their children's future.

Cutting back tax-free savings accounts may support the Liberals in their plans for massive spending and big-government programs, but it certainly does not support the millions of middle-class Canadians who are working hard to save for their future.

I would like to move to what I believe to be at the heart of what middle-class Canadians desire. I am very familiar with this because I spent my life in this industry, building houses for individuals. This is in regard to the mortgage changes that the Minister of Finance brought out very suddenly and unannounced, without consultation. We have a clear example of how the Liberals are repairing their fiscal plans really on the back of a napkin, without thinking about the long-term financial consequences for Canadian families.

Last month, out of nowhere, the Minister of Finance announced new mandatory minimum down payments on home purchases. We know that buying a home is the most important financial decision most Canadians will ever make and that achieving home ownership is a bedrock issue when we are talking about supporting the middle class. Therefore, one might expect that the finance minister would actually consult with those who know the housing market best before making a massive change, doubling the minimum down payment on some homes.

For example, the Canadian Real Estate Association is Canada's top source of accurate, up-to-date information on statistics on the Canadian real estate market. I know it would have been delighted to have offered its input to the minister on the minister's mortgage changes and would have been eager to work with the new government on issues like housing affordability. Yet it was not consulted.

The Canadian Home Builders' Association employs 800,000 people in the country. It builds approximately 200,000 new homes every year for Canadians. It has such a huge multiplier of economic benefit and spinoff to it, 10 times whatever the value of spending is on housing. It was not consulted.

The minister said that he made these changes to cool the Vancouver and Toronto housing markets. If he had taken the time to consult, he would have realized there were actually eight major Canadian housing markets where the average home price was already more than $500,000.

The Liberals say they support the middle class. However, with a stroke of a pen, the finance minister has made it harder for young people and families to achieve home ownership in places like the Fraser Valley, Victoria, Milton, Mississauga, Markham, Calgary, and Fort McMurray. He has cut many families out of the housing market altogether. He is telling millions of young families that they will now have to save at least $10,000 to achieve home ownership. At the same time, he is cutting the tax-free savings account in half to $5,500.

We have a government on one hand telling us that average Canadians cannot afford to put away $10,000. On the other hand, it is telling us that Canadians have to save $10,000 to buy their new homes. This is just one example of why cutting the tax-free savings account, a revolutionary savings tool, will hurt middle-class Canadians.

There was much in the finance minister's speech about the middle-class tax cut, so let me address that as the third section of my speech today.

Another core part of Bill C-2 is the government's changes to Canada's middle and upper-class tax brackets. What was supposed to be a simple change to the tax code has created a long-term financial mess for Canada. It is worth noting that the tax changes before us would not have anywhere near the impact the Liberals have promised.

The Liberal tax cut most benefits those in the high end of the second highest tax bracket. Those who make close to $200,00 would benefit the most. In fact, the PBO says that the reduction in the second tax bracket will benefit the top 30% of income earners in the country. Those are facts from the Parliamentary Budget Officer. They are not my comments, not my party's comments, not the opposition's comments, but the government's objective overseer of all things economic. For the average Canadian family, this means very little. Based on the finance department's own estimates, and I mentioned this before, the new Liberal tax plan amounts to, on average, $6.34 a week for those who qualify.

Even more troubling is how these tax changes add to a growing trend of this new Liberal government that it cannot get a handle on its baseline numbers.

We had this yesterday in the House of Commons during question period. Actually, it began on Tuesday in the House of Commons during question period, when the Parliamentary Secretary to the Minister of Finance stood up in this House and wilfully misled the House in making a statement that the previous Conservative government left this country in a deficit position. In fact, the finance department and the PBO have put online for all Canadians to see the actual facts and the numbers, where we left the government with a surplus of $600 million. All Canadians can go online to see that if they choose.

Again, those are not the opposition's numbers. Those are the baseline numbers on which the government came to power and had to deal with on day one, a $600 million surplus, not a deficit.

The tax changes we have before us today are not what the Liberals campaigned on. They promised that the tax cuts would be part of a plan that holds the deficit to $10 billion, a promise that they have already thrown out the window, and they campaigned on a commitment. This is the one that is so vivid in many Canadians' minds, the commitment that the tax cuts would be revenue neutral.

The new Prime Minister went across the country and said, “We'll take the money from the rich and we'll give it to the middle class for the income tax cuts, and do not worry, it will not come out of the Treasury. It will be a revenue-neutral deal.” The Prime Minister repeatedly and directly stated that he would introduce, and I quote, a $3-billion tax cut for the middle class paid for by a $3-billion increase on high-income earners. However, the Liberals got their numbers completely wrong, and this tax cut will not be revenue-neutral, not even close.

By the Minister of Finance's own admission, there will be a revenue shortfall of over $1 billion. This is money that will be taken from the Treasury, another $1 billion, plus. In fact, some of the objective observers and economists have looked at it, and I will give the House these numbers. The Institute for Research on Public Policy says the shortfall will be even greater, creating a revenue gap of closer to $1.5 billion, and the C.D. Howe Institute, which the Minister of Finance once chaired, said the Liberal plan will fall short by nearly $2 billion.

Where is that money coming from? It is coming from existing revenues, that puts us into a further deficit, so it already looks as though we are projecting a larger deficit.

I will wrap up by saying that Canadians are concerned and worried about how quickly the Liberals have managed to put the country into a financial hole. Their bad math and the faulty projections behind the measures in Bill C-2 help illustrate why.

Finally, I would like to move an amendment. I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following: “this House. declines to give second reading to Bill C-2, An Act to amend the Income Tax Act, since the principle of the Bill: (a) fails to address the fact, as stated by the Office of the Parliamentary Budget Officer, that the proposals contained therein will not be revenue-neutral, as promised by the government; (b) will drastically impede the ability of Canadians to save, by reducing contribution limits for Tax-Free Savings Accounts; (c) will plunge the country further into deficit than what was originally accounted for; (d) will not sufficiently stimulate the economy; (e) lacks concrete, targeted plans to stimulate economic innovation; and (f) will have a negative impact on Canadians across the socioeconomic spectrum.”

[Bill Morneau, Liberal, Minister of Finance]

moved that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee.

Mr. Speaker and hon. members of this esteemed House, I appreciate the opportunity to discuss the merits of the middle-class tax cut the government introduced in December and that this bill, Bill C-2, would enact.

On January 1 of this year, nine million Canadians received a tax break. Our government was elected on a plan to grow the economy, and these changes are an important first step in that plan.

Our government believes that a strong economy starts with a strong middle class. Canada's middle class has gone too long without a raise, and in challenging economic times, we have taken action to help them.

The global economic downturn has presented some new realities for the Canadian economy. This means that our plan to grow the economy is now more important than ever.

As we pursue this plan, we will continue to keep Canada's debt-to-GDP ratio on a downward track. We will be prudent in our expenditures and will return to a balanced budget by the end of our mandate.

The government's job is to help Canadians succeed. We are lucky to have one of the most highly educated and talented workforces in the world. In order to harness the power of our people to build a stronger and more prosperous country, we need to improve direct support to the middle class and those working hard to join it. The legislation before the House today does just that.

This bill would cut the tax rate on income earned between $45,282 and $90,563 in 2016 by 7% and would introduce a new tax rate of 33% on income earned above $200,000.

The middle-class tax cut and accompanying changes will make the tax system fairer. Specifically, the bill proposes to reduce the second personal income tax rate to 20.5% from 22%, introduce a 33% personal income tax rate on individual taxable income in excess of $200,000, return the tax-free savings account annual contribution to $5,500 from $10,000, and reinstate indexation of the tax-free savings account annual contribution limit.

Let me elaborate on the three points. First, the personal income tax rate changes took effect on January 1 of this year. As I mentioned at the outset of this speech, it is expected that about nine million Canadians will benefit from this measure this year.

Second, in conjunction with this tax cut, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000. We are asking the wealthiest 1% of Canadians to pay a little more to help the middle class and those working hard to join it. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold would be indexed to inflation.

Third, the government is returning the tax-free savings account, TFSA, annual contribution limit to $5,500 from $10,000, effective January 1, 2016. Let me reassure all members of the House that this change is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. I should also note that the limit is cumulative and builds over time.

Eliminating the previous government's increase to the TFSA contribution limit is consistent with our objective of creating a tax system that is fair and that helps those who need it most. Keeping the limit at $10,000 would have helped Canada's wealthiest save more while costing the federal treasury hundreds of millions of dollars over the next five years.

We know that only 6.7% of eligible Canadians contributed the maximum in 2013. Doubling it did nothing for the 93.3% of Canadians who could not max out their contributions with the existing limit. Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time.

While these three elements are what I expect will be discussed during the parliamentary debate, I would like to highlight some of the other measures that are included in today's legislation.

Today's bill proposes to change the current flat top-rate taxation rules applicable to trusts to use the new rate of 33%.

The bill sets the tax on split income to the new rate of 33%.

The bill amends the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate.

The bill increases the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

The measures included in this legislation are a priority for this government. However, there are many unique issues that confront Canadians today. That is why reaching out and listening to Canadians is so important. We have a plan to grow the economy, and we need the input of Canadians to learn how to best implement our plan in their cities and communities.

Over the past few weeks, my parliamentary secretary and I have heard from Canadians about what we can do to help the middle class right across the country.

We asked Canadians directly how the government can support them and grow the economy. We met with people from all walks of life: business leaders, farmers, small-business owners, members of our indigenous communities, and community leaders. I also engaged with students by holding a Google hangout and two Facebook live events that attracted a total audience of more than 80,000 Canadians. I am encouraged that young Canadians have found new reasons to become engaged with their government. Our goal is to listen and engage with Canadians on the issues that are important to them, and it has, to date, been a very successful endeavour.

As part of these consultations, I was pleased to have spoken to the member for Milton and the member for Rimouski-Neigette—Témiscouata—Les Basques, my colleagues across the aisle, and I assure the House that their input will be thoughtfully considered.

Although we are both back in Ottawa now, these consultations continue online. Since the opening of the online consultations, we have already reached over 150,000 Canadians and have received over 3,000 submissions, in fact 3,400 submissions as of today, from Canadian individuals and groups, more than twice the submissions, almost three times the submissions, in fact, received last year under the previous government.

It was especially important for me to hear from Canadians about the effect the economic situation is having on them. The stories I have heard have reaffirmed for me the importance of our plan to grow the economy in the short, medium, and long term.

Collaboration is a critical element of our plan to deliver real change in a way that takes into account the priorities and opinions of Canadians. As we implement our plan, we will continue to be open and transparent every step of the way.

This legislation is an important first step to help strengthen the middle class. It puts more money in the pockets of Canadians to save, to invest, and to grow the economy, but it is just a first step. In budget 2016, the government will introduce a new Canada child benefit that will lift hundreds of thousands of Canadian children out of poverty and will help nine in 10 Canadian families with children to be better off. It will replace the universal child care benefit, which is not tied to income, and it will simplify and consolidate existing child benefits while ensuring that help is targeted at those who need it most.

Taken together, the measures we intend to introduce will help grow our economy to the benefit of all Canadians. The government will invest in our economy, in our communities, and in Canadians themselves. We will make transformative investments in infrastructure that will increase the productive capacity of our economy while improving the day-to-day lives of Canadians.

After 10 years of weak growth, we have an ambitious economic agenda to grow the economy and the mandate to implement it. It started in December with this middle-class tax cut and will continue with the introduction of the Canada child benefit and our historic investments in infrastructure over the next decade.

I encourage all members to support this legislation and to help us deliver on our plan to support the middle class and those working hard to join it.

Business of the House

[Dominic LeBlanc, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, in spite of his best efforts, we just had a good example of embellishment right there. Why do I not focus on the very erudite question that comes on Thursdays that I know members look forward to all week.

This afternoon we will resume debate on the Conservative Party's opposition motion.

Tomorrow, the House will debate Bill C-2, which amends the Income Tax Act, at second reading, and we will continue that important debate on Monday.

Tuesday, February 2, will be another opposition day.

On Wednesday, we will debate Bill C-4, which repeals the Conservatives' unfair union bills. As colleagues know, this important legislation was introduced this morning.

Lastly, Thursday, February 4, will be another opposition day.

Opposition Motion—Energy East Pipeline Project

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Mr. Speaker, I thank the hon. member and congratulate him on his election as well.

As I mentioned in my speech, our Prime Minister made a promise in our election platform that this is the party and this is the government that is going to help the middle class. Every policy that is coming in is helping it. Bringing in Bill C-2, as I said earlier, reducing income tax from 22.5% to 20.5%, would help middle-class families. Bringing in a Canada child benefit would help the families who need the most. These are the types of policies we need, and these are the types of policies our government is going to deliver in the coming months and years.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Mr. Speaker, first, I congratulate the nominees who sit in this chair, and I am sure the constituents of Nipissing—Timiskaming are very proud of the hard and diligent work you do, not only for your constituents but for Canadians.

I am proud to stand today to speak about our government's economic agenda.

This is a difficult period for the Canadian economy. China has slowed down dramatically, and commodity prices have dropped globally. The Bank of Canada has adjusted its economic forecast and has cut interest rates twice over the last 12 months. Now, more than ever, is the time for our government to look toward long-term growth, growth that will provide good jobs for Canada's middle class, the lifeblood of our economy. This is why we introduced Bill C-2, which provides a middle-class tax cut to support Canadian families.

My constituents of Surrey—Newton are happy to finally have a government that believes that they too deserve tax relief. The Liberal middle-class tax cut will lift $3 billion in tax burden from the backs of middle-class income earners.

Bill C-2 will reduce the middle-income tax rate from 22% to 20.5%. It will also reduce the contribution limit on tax free savings accounts from $10,000 to $5,500. This will benefit about nine million Canadians, which accomplishes two important objectives. First, it will restore fairness to the tax system by treating middle-income earners on par with the highest earning bracket and corporate Canada, which received the majority of tax relief from the previous government.

Just as important, this is a middle-class tax cut that is designed to stimulate the economy. The Bank of Montreal's chief economist, Doug Porter, has stated that this tax cut will encourage an increase in consumer spending and might compel middle-class earners to work more, because they will be able to keep more of their paycheques in their pockets.

History has shown that a middle-class tax cut has one of the highest returns on investment for a government, because it spurs growth by encouraging spending in the local economy. This is why, in Surrey—Newton and across Canada, small businesses are also supportive of this measure. It means that they will see a direct positive impact.

However, this is not the only way this government is putting money back into the pockets of families. The new Canada child benefit creates a simpler, more generous, and tax-free infusion for families with children.

Investment does not stop there. We will also invest in cities, the economic engines that are critical to the success of our national economy. In Surrey Newton, we see the strain that is caused by rapid growth. The city of Surrey continues to welcome over 1,000 new residents per month, and we need to continue to improve our municipal services to accommodate this growth.

This Liberal government has committed to investing $125 billion over the next 10 years to upgrade public infrastructure and public transit. The newly proposed LRT line in Surrey is absolutely essential for strong public transit long into the future. Within the next 30 years, Surrey will emerge as the largest city in British Columbia, and easily accessible public transit is critical to that evolution.

Our government understands that investing in Canada's economy must be balanced, but it also means that we will never give up on working to get our natural resources to international markets. Our Prime Minister and this government will never forget that 1.8 million jobs are directly and indirectly attached to natural resources across Canada.

This government looks far into the future of Canada's economy and plans for long-term sustainability and growth. This will be accomplished in a number of specific ways: by ensuring that environmental sustainability is at the heart of Canada's resource sector, which will make Canadian resources globally attractive; by working with the provinces and territories to ensure that under-represented groups are represented in a new skills and labour strategy; by supporting growing firms in attracting talent and investment while still incorporating innovation in their operations; and by enhancing the Canada pension plan co-operatively with our provincial and territorial partners to ensure that all Canadians have access to a secure retirement. I cannot emphasize how important this kind of approach is to the future success of all Canadians.

In Surrey, we had the pleasure of being one of the six cities to host the hon. Minister of Finance during the pre-budget consultation tour. The minister was able to hear a wide range of perspectives from one of the most dynamic communities in Canada, and one of the key messages was this: Canada can no longer place all of its eggs in one basket. We must look for balance. We must invest in the middle class, in cities, and in different industries, and we must take the long view for our future generations.

These are the same messages we are hearing from Canadians from coast to coast to coast. We have reached nearly 150,000 Canadians in these pre-budget consultations, through technology and through in-person meetings. This is the largest participation in pre-budget consultations in Canadian history. We are proud of this inclusive approach, which will come to define everything our government does over the next four years. This is a government for all provinces, all territories, all cities, all financial profiles, all races, and all backgrounds. We are committed to listening to each and every perspective and opinion. This is why our mandate to grow the economy sustainably, responsibly, fairly, and with a long-term vision was supported in Surrey—Newton and across Canada. We will continue to show respect for every single Canadian voice as we work towards presenting our budget in the coming months.

I am proud to say that balance is back in Ottawa.

Ways and Means

[Bill Morneau, Liberal, Minister of Finance]

moved that Bill C-2, An Act to amend the Income Tax Act, be read the first time and printed.

(Motion deemed adopted, bill read the first time and printed.)