House of Commons Hansard #131 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Economic Policy
Government Orders

4:35 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Madam Speaker, the mini-budget brought down today by the Minister of Finance would do any member of the Canadian Alliance proud.

It is a budget that leans to the right. It is a budget that will satisfy a certain cross-section of taxpayers in Quebec and in Canada, but which ignores a large chunk of the population.

With the staggering, not to say exploding, surpluses at the disposal of the Minister of Finance, we were expecting that he would do something for those who were really responsible for helping put the fiscal house in order, those whose efforts have made the last three years of zero deficits possible and are still being gouged by the federal tax system, those who are the reason the minister can stand here today and boast about surpluses.

We thought that the main beneficiaries of these tax cuts would be low and middle income families, not families at the top end of the scale, those earning $250,000 and up, not the millionaire friends of the Minister of Finance.

We were expecting that a major effort would be made to provide relief for the neediest families, those who are responsible for Canada's improved finances.

Instead, we see tax cuts for those at the top, those earning $250,000 and up. Many of them are listening today. We see tax cuts for these folks that are 40 times the tax cuts for a Canadian family earning $35,000. That is 40 times higher.

Tax cuts for a family with one dependent child and a $35,000 income represent 1% of that family's income, whereas tax cuts for families with an income of $250,000 or more represent 8% for that income bracket. What kind of fairness is this? It is worse than the flat rate advocated by the Alliance.

With the tax cuts, the change in the capital gains taxation, and the elimination of the surtax, a family that has an income of $250 000 will get a $20,000 reduction in its tax bill this year. This is $20,000 after taxes for people who do not need it and did not contribute to the surplus. So this family will get $20,000, and a single income family with one dependent child and $35,000 will get only $500. That is $20,000 compared to $500.

Can we imagine what we could have done by transferring to low and middle income families the tax cuts being granted to the rich? We could have eliminated all federal income tax for families with an income of $40,000 or less. Families in need, families that are in need because of this government and this callous finance minister, could have been dropped from the federal income tax roll.

Today, the finance minister candidly gave us an interesting bit of information. We have often risen in the House to ask him to do something to ensure that single parents with one dependent child earning less than $35,000 not pay any tax. He has always said “It is already taken care of, those people no longer pay any tax”. How can he explain now that he wants to reduce the income tax level for this bracket of income when these people supposedly no longer pay any tax?

After saying just about anything about the surplus, after hiding the real figures from the Canadian people to prevent any public debate on the Liberals' priorities right wing priorities, they are now fudging the figures on income tax reduction. They want Canadians to believe that they will benefit from extraordinary income tax cuts and from the government's generosity, but this is not the case at all. The only ones who will benefit from all this, as was the case in the last two budgets, are Canadians with very high incomes, friends of the party, and they say that there are income tax cuts.

With the last budget for the same family earning no more than $35,000, there is a $200 reduction. For a family earning $250,000 and more, there is a $9,000 reduction. Is that the kind of fairness the government is talking about? Is that what is meant by responsibility in the minister's documents? So much for social justice. Our viewers will not be fooled. They will realize that for the vast majority of taxpayers there might be some tax cuts, but inadequate cuts, since the Minister of Finance has surpluses coming out his ears.

This year he dares to say that the surplus will reach $6 billion only, whereas close to $12 billion has already been accumulated in the coffers of the federal government. That is more than double his forecasts for this year. He might have doubled the effort he is making now, but for ordinary people.

Given the proposals that are made, I think that is pretty clear. Over the next five years $74 billion will go to tax reductions, but these should be directed at the real people. Nine taxpayers out of ten should get tax reductions because they are the ones who paid in order that public finances could be placed on a sounder footing. We are talking about people earning less than $80,000.

That is what should be targeted, that is the unfairness that should be corrected, for these are the people who paid for fiscal improvement. These are the people who are still getting bled white by the tax system so that very affluent families can enjoy those incredible tax reductions. People within those same income brackets workers and small business people contributing to the employment insurance system are funding, through the surplus accumulated in the EI account, the tax reductions the finance minister is giving today on a silver plate to the very rich taxpayers.

I am talking also about the unemployed men and women who are not receiving any EI benefits since they were literally thrown out of the system because of the drastic cuts made in this system and because of the tightening up of the eligibility criteria.

In rural areas in particular, families are out of a job eight weeks every year and cannot qualify for EI. These people who are in dire straits are the ones who pay for the tax reductions granted to the rich. It is unacceptable.

In this statement as in the last two budgets tabled by the Minister of Finance, the last two Liberal budgets, where are the liberal values and the social solidarity? Where?

The purpose of these measures is to gain the support of the right wing, being courted by the Alliance. The Liberals are starting to look like the Alliance.

Economic Policy
Government Orders

4:45 p.m.

Bloc

Michel Gauthier Roberval, QC

They are further right than the Conservatives.

Economic Policy
Government Orders

4:45 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

That is right. That is the choice the voters are given, to vote for people who serve the very rich, the millionaires and the billionaires. That is what the government did first with the family trusts and now with the tax reductions.

The same thing goes for the Alliance and its flat rate. It will increase the gap between the rich and the poor. Low and middle income families will continue to pay, while the rich gets richer.

We in the Bloc Quebecois, are ready to manage the real things, the real surpluses. For four years now, we have been talking about the real surpluses the government has. We do not wail until the eve of an election to release the real figures and talk about our real priorities.

We in the Bloc Quebecois, believe the minister could have done things differently. His priorities could have been different than those he has listed. He could have addressed the real problems. He could have given massive tax cuts to middle income earners. He could have reorganized the employment insurance system instead of literally stealing the surplus from the workers every year.

He could have done more to help the poorest families faced with the oil crisis. A senior citizen, for instance, or a woman living alone, will receive a cheque of $125 to make up in part for the increase in the price of oil heating. Actually, the price of oil has almost doubled since last year, from $600 to more than $1,000. What good is $125?

Incidentally, if the government had not given a $20,000 income tax cut to those earning $250,000 and more, it could have been more generous. We could have done more for those people.

We could also have given a hand to the trucking industry. Some people are in difficulty right now because of the oil crisis. We could have helped taxi drivers or farmers who are going through an incredible crisis because of oil prices.

Instead, the government has chosen the easy way, the flag on the cheque. It chose to give $125 to make up for the constant increase in the price of oil and as a means to help the poorest, the ones the government has hit hard with such drastic measures as the cuts to social transfer payments or the restrictive rules of eligibility for employment insurance benefits.

This is what it has done. A $20,000 income tax cut for millionaires and a $500 cut for middle income families and the poorest families during an unprecedented oil crisis. It has given them $125. It is the flag that counts.

Economic Policy
Government Orders

4:45 p.m.

Bloc

Michel Gauthier Roberval, QC

This is political marketing.

Economic Policy
Government Orders

4:45 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

It is political marketing, and political opportunism too to come out with such things just before an election.

It is shameful to come out with such things. It is shameful for two reasons. The government forgot to say who actually cleaned up the public finances. We did not forget those people.

We know that those who had to bear the brunt of most of the $25 billion increase in taxes, to which bracket creep must be added, since 1993 are low and middle income families, those who earn less than $80,000 a year. We did not forget them.

We did not forget the unemployed either, because by being robbed of the EI fund surplus, they are the ones who are paying for the tax relief given to the rich. We did not forget them.

During the next election campaign, we will fight with all our might to force the Minister of Finance to go back to the drawing board and apply tax resources to the priorities of ordinary people, whom we have consulted. We have been consulting people for seven years since we were elected here. We know what the priorities are.

For his part, the minister consults his friends the millionaires and people from big corporations, like Thomas d'Aquino, before deciding what would be good for society as a whole. Of course, he ends up helping a few millionaires.

We will know what the priorities are. Here they are: tax cuts as high as those proposed generally by the Minister of Finance, but for families that really need them. As for employment insurance, it is a reform that would use up most of the surpluses generated in the next five years, the rest serving as a contingency fund, to improve the system so that more than 40% of Canadians are eligible. For women and young people, the exclusion rate is even higher.

We will fight against the fact that there has been no index adjustment to the Canada health and social transfer for health, social assistance and especially education which has been neglected by the government for the last seven years.

We will also ensure that the social priorities mentioned by various groups are recognized. It is urgent that sufficient funds be awarded to social housing nationally. The government could even afford to spend $8 billion on social housing over the next five years if it rethinks its priorities properly.

For the first time, the Minister of Finance and the Bloc Quebecois have forecast the same surplus. Eminent economists had to speak out last week before the minister finally recognized the existence of surpluses.

He has the means to act. He could also increase old age security benefits. According to a recent report by the National Council of Welfare the rate of poverty for single and older women is 47%. These women live below the poverty level.

There are budgets to increase old age security benefits for these women whose poverty rate is incredible. There is more money available than what has been spent so far on the environment. There is money for shipyards. Instead of having his ships built in China, the Minister of Finance could have them built in Quebec or elsewhere in Canada and could provide tax measures.

Thousands of workers are waiting for this. He could have come with an announcement today, but no, he has his ships built in China. He pays taxes in the Caribbean and asks us to tighten our belts while he gives handouts to his buddies. This is incredible.

He could have put a lot more money into international aid. This is really shameful. We are now at 0.3% of GDP while the established goal is almost 0.7% of GDP. He could have done this. He could have stopped squandering public funds to really control grants and how they are handed out.

What is management at the Department of Human Resources Development doing with our money?

Economic Policy
Government Orders

4:50 p.m.

An hon. member

It is used for friends, it is cronyism.

Economic Policy
Government Orders

4:50 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

That is it, cronyism. There are five RCMP investigations in the Prime Minister's riding. This is no joke.

He could have announced some measures to put public finances on a healthier footing, to make fair use of the proceeds of that operation of putting policies and fund allocation on a healthier footing. He could have announced that he was giving them to those in need. No, in keeping with his last two budgets, as soon as he began to accumulate major surpluses, his priorities were to please in this order: number 1, the highest income group; number 2, big business; and number 4, 5 or even 6, his last priority, to help out ordinary people. Those are this government's priorities. It has shown us that again today. The next election campaign will be one based on truth. People will have to choose between the Liberal right and the Alliance right. I believe that the Bloc Quebecois has demonstrated that it is the true defender of the interests of Quebecers and even of Canadians, when possible. The real interests of real people who must be served by democracy, not the millionaire buddies of the minister or the Prime Minister, but real people.

Today that is not the priority of the Minister of Finance. His priority has gone directly to the people with the highest incomes. The minister may have forgotten that Halloween falls on October 31. He has already put out his pumpkin and started distributing his goodies. The goodies are for the rich; the poor will get the crumbs.

This is the conclusion that can be drawn from this mini-budget. We are going to fight with all our might to send the minister back to the drawing board and to have the truth come out.

People are going to see that real income tax cuts are not for those who are watching us, the nine out of ten taxpayers who earn $80,000 or less and who are not going to benefit from it, but they are the ones who are going to pay, through their contributions to the UI fund for tax relief for those who make upwards of $250,000. I think people are going to find out about this.

I would like to move the following amendment to the amendment:

That the amendment be amended by adding after the word “restored” the following:

“, for not having given enough tax relief to lower- and middle-income families and too much relief to high-income earners, for having done nothing to resolve the Employment Insurance problem, for not having solved the social housing problem and for not having indexed the Canadian Social Transfer, for having provided those who are most in need with completely inadequate compensation for the rise in oil prices, and for having done nothing to help the trucking, taxi and agricultural industries facing this crisis;”.

By the way, there is nothing there about Mosel Vitelic either. We would have expected to be pleasantly surprised by the finance minister telling us that Mosel Vitelic was a done deal, that the government was going to participate and it would happen in Quebec. Unfortunately not. When it comes to job creation and economic growth in Quebec, we are the poor relations. This is not a priority for the finance minister and the Liberal government.

To conclude, I would say we are going to fight the government every inch of the way and the truth will come out even more than it has in the past.

Economic Policy
Government Orders

4:55 p.m.

The Acting Speaker (Ms. Thibeault)

The amendment to the amendment is in order.

Business Of The House
Government Orders

October 18th, 2000 / 4:55 p.m.

Glengarry—Prescott—Russell
Ontario

Liberal

Don Boudria Leader of the Government in the House of Commons

Madam Speaker, I rise on a point of order. I understand that the Chair and table officers were asking about the intention of the motion that was introduced yesterday regarding the debate tomorrow at private members' hour.

So that hon. members will know, the officers of the House were asking if that meant that there were two private members' hours, one in the morning and one in the afternoon. In fact, no, that is not the case. It is the private members' hour of tomorrow afternoon that was advanced to tomorrow morning at 9 o'clock, just so that the House is clear as to what that in fact meant.

If someone were to seek unanimous consent later, as I am not doing it now, to permit that a full slot be held for the Conservative Party later this afternoon, our party would not object to it.

The House resumed consideration of the motion, of the amendment and of the amendment to the amendment.

Economic Policy
Government Orders

5 p.m.

Reform

John Williams St. Albert, AB

Madam Speaker, I listened to the diatribe from the Bloc on the budget. Unfortunately what we usually get from the Bloc is a diatribe. The member talked about defending the interests of Quebecers and almost as an add on said and of course Canadians as well. Unfortunately what we get from the Bloc is a diatribe about more taxes, more of this, more of everything.

The Minister of Finance's speech this afternoon was about two visions of Canada. Sure he has introduced some tax reductions. He was following behind the Canadian Alliance. He was playing catch up to the Canadian Alliance policy of tax reduction. The problem is he cannot make it because of the auditor general's report.

The report contained a whole litany of waste and mismanagement about the HRDC billion dollar boondoggle which is now perhaps a $3 billion boondoggle. Grants were given to the Prime Minister's friends in his own riding. A $6.3 million CIDA contract was given to somebody who did not qualify, apart from the fact that he happened to be the Prime Minister's friend. Another one of the Prime Minister's friends is under investigation. I am talking about a $5 million grant by Industry Canada that was given to someone who is under police investigation by HRDC. The litany goes on and on. That is why the Liberals cannot offer the tax relief that we would offer. We want to clean up all of that.

The Minister of Finance talked about more grants and money going to the poor. Through the income tax returns we would take them right out of the Income Tax Act so they would not have to pay money to the Government of Canada in the first place and then get the money back.

Perhaps we are looking at an election. It sounded like an election style statement by the Minister of Finance.

If members of the Bloc see that tax reduction is feasible by the Liberal government and that tax reduction is feasible by the Canadian Alliance, why are they still ranting on about their agenda of separation when they recognize that if we all work together, we can build a great country?

Economic Policy
Government Orders

5 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Madam Speaker, I find the latter part of the member's question irrelevant.

I would like to talk about the Canadian Alliance's tax reduction proposals. Last week I had the opportunity, along with other economists, to speak with the Leader of the Canadian Alliance in Montreal. I can tell the House that as far as progressivity goes, the tax system proposed by the Canadian Alliance is a bust. It does not make the grade.

No one found the Canadian Alliance proposal credible. It increased disparity among the various income levels and did little to solve the real problems of taxation.

We on the other hand, have been working hard since 1993 to observe and analyse this taxation system and have reached the conclusion that the important thing is not the rates of taxation but deductions, tax credits. We analysed all that, as well as the taxation structure. I would remind the Canadian Alliance member that the discrepancy in tax cuts is worse with the Canadian Alliance proposal than with any other proposal.

For instance, we looked at a family with one dependant earning $250,000. The tax cut would be 14 times greater than that for a middle income family. It would be 11 times greater for the Liberals. They are still leaning to the right, but the Canadian Alliance proposal is far from being a solution to the problem and being fiscally fair. On the contrary. Relatively speaking, tax cuts for top income earners are far higher than for middle income earners.

By the way, Quebecers are paying $35 million in taxes to the federal government. This is a huge amount of money. They are therefore entitled to have a say in how this money is spent, particularly in light of the government's patronage, cronyism, and squandering which the member mentioned.

Economic Policy
Government Orders

5:05 p.m.

NDP

Yvon Godin Acadie—Bathurst, NB

Madam Speaker, I have a question for the member for Saint-Hyacinthe—Bagot.

I think he must know that when it was announced recently that there was a $12.3 billion surplus in the general revenue fund, 75% of that money came from the employment insurance fund.

When I was young we used to say that Robin Hood stole from the rich to give to the poor. Today Robin Hood steals from the poor to give to the rich. What is happening in the House today is another example of stealing from the poor to give to the rich; a 3% tax cut for the rich and a 1% tax cut for the poor.

I would like my colleague from Saint-Hyacinthe—Bagot to comment on the fact that 75% of the federal government's surplus comes from the employment insurance fund. Today, more than 800,000 people are no longer eligible for EI benefits. Children are going hungry because of the cuts made by the Liberals to the employment insurance program in 1996.

Today, they are singing their own praises to win votes. I want to hear the member on this. Does the Minister of Finance and the government think they still can buy votes as they did in the past? I can assure the members today, as I did last week, that we, in Atlantic Canada, are not for sale at such a laughable price.

Economic Policy
Government Orders

5:05 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Madam Speaker, I thank my colleague from Acadie—Bathurst for his particularly relevant question and remarks.

The government has grown wealthy on the backs of the most disadvantaged. It has always been so. We are talking about the employment insurance fund. For six years the fund has had significant surpluses contributed by workers and employers. The federal government does not contribute a cent to it any more.

Yet it has the gall, on page 101 of its budget document, through its Minister of Finance, to liken cuts to employment insurance contributions to tax cuts. It does not contribute one red cent to the employment insurance fund and it considers cuts to employer and employee contributions to be the equivalent of cuts in income tax. How twisted can one get?

The member is right. By creaming off $38 billion in surpluses since 1994 the Minister of Finance has funded most of his surpluses from the surplus in the employment insurance fund.

Moreover, savage cuts were made in funding for health care, education and social assistance to the provinces. It took a first ministers meeting and the realization that the government could no longer reasonably say that it had no surplus when surpluses were arriving by the shovel full to get the government to react and repair the damage.

From one end of the country to the other, Canada's health care system was cracking while the Minister of Finance was cracking under the weight of the surpluses. Is it not shameful to wait until a few weeks before an election may be called to announce he was putting money back into health? People have been waiting for that for years. The system was cracking.

We expected an employment insurance reform because, as my colleague accurately pointed out, only 43% of unemployed workers qualify for EI benefits. Some people are on the street because of the Minister of Finance. Since a surplus of between five and seven billion dollars was generated each year for the past five years, we expected the Minister of Finance to allocate more to improving the program than the $250 million announced a few days ago by the Minister of Human Resources Development. We expected that the unemployed, the poor and the families on the street would benefit from the minister's generosity, not the millionaires. But we were wrong.

Even though the Liberals are electoral opportunists when they make people believe that there are tax reductions and so on, they cannot even manage to do so in a way that will benefit them. This budget is clearly a budget for the wealthy. It is not a budget for the middle class, the poor, the unemployed, or for young people striving to get an education. There is not any additional money for education.

This is not a budget for the poor, who are faced with the oil crisis. It is not a budget for the elderly or for the women who marched in the streets to call for special measures for them. This is unbelievable. The hon. member is right and his comments are to the point.

Economic Policy
Government Orders

5:05 p.m.

NDP

Alexa McDonough Halifax, NS

Madam Speaker, I rise today to respond with very mixed feelings to the government's economic statement. In one sense I have a heavy heart about the choices the government has made as expressed in today's mini-budget.

I must say in another sense I have a real feeling of optimism about what Canadians are going to say about the priorities expressed in this budget. I have a feeling of optimism about what Canadians are going to do to seize the opportunity the upcoming election will give them to take corrective action and corrective measures to try to put the federal government back on a more progressive course.

Budgets and economic statements are an expression of a government's values. They are an expression of its priorities and its choices.

Once again what we have seen today is that the government has chosen to leave a great many Canadians out in the cold. Once again the government has chosen to give a major nod and a major boost to the tax cut lobby in the country. It has chosen to continue the Liberal obsession of catering to the interests and dictates of large corporations and the wealthy elite.

For seven years the Liberal government has had the opportunity to make different choices. Yet at every turn it has chosen to cut services for people who need them and now to cut taxes for the wealthy and the powerful.

The Liberals have chosen to cut taxes over cutting waiting lists for hospital beds and for cancer treatment. They have chosen to cut taxes over cutting rates of child poverty, over cutting down on the numbers of homeless, over cutting pollution of our air and our water.

Today's economic statement sounds more like a page from the reform alliance platform than a progressive vision for Canada's future. They actually seem proud of that. The member for St. Albert actually stood and said that this budget is playing catch up with the reform alliance vision for Canada. I say that this is a government that has swallowed whole the reform alliance vision for Canada. We could hear the loud burp of the indigestion of members opposite on that revolting decision to swallow whole the reform alliance platform.